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Belgium is the OECD country that levies the highest taxes on the labour income of single taxpayers with low, average or high earnings. Single taxpayers at average earnings take home less than 45% of what they cost to their employer (the “total labour costs”); taxpayers at high earnings take home even less than 40%. Also the tax burden faced by married couples is or is amongst the highest in the OECD. Compared to the OECD average, the difference between the average tax wedges (average income taxes plus employee and employer social security contributions minus cash transfers as a percentage of total labour costs) is the smallest for one-earner married couples at average earnings with 2 children but the tax wedge remains about 13 percentage points above the OECD average.

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In 2009, the overall tax burden decreased for all types of households analysed in the Taxing Wages Report. For a single employee with an average wage the tax wedge narrowed by 0.5 percentage points to 55.2% of total labour costs. A single-earner married couple with 2 children at average wage earnings saw their tax wedge decrease by 1.1 percentage points to 38.8% of total labour costs. The tax wedge decreased the most for lone parents with 2 children at 67% of the average wage; their tax wedge decreased with 1.3 percentage points to 33.7% of total labour costs.

The tax wedge in Taxing Wages is calculated on the basis of the average gross wage earnings for full-time employees in the private sector (including employees at management level). The corresponding 2009 annual average gross wage for Belgium was EUR 39,723.

More Information

A detailed description of the Belgian tax system and the calculations for the tax wedge in Belgium is included in the Taxing Wages Report.

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