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Between 2000 and 2011, the tax and social security burden on labour income decreased for all family types in the Taxing Wages Report in the Slovak Republic. However, the average tax wedge (income taxes plus employee and employer social security contributions minus cash transfers as a percentage of total labour costs) remained above the OECD average for almost cases although the difference compared with the OECD average declined over this period. In 2011, the tax wedge for single parents earning 67% of the average wage was 7 percentage points above the OECD average. Average one-earner couples with 2 children faced a tax wedge that was almost equal to the OECD average.
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Tax Wedge in % of labour costs for different wage levels
and household types, 2000 and 2011
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The tax wedge decreased for all family types as a result of tax cuts implemented between 2000 and 2011. Average one-earner couples with 2 children benefited the most (-5.8 percentage points); single parents with low earnings benefited the least (-1.6 percentage points).
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download the above graph and data for all OECD countries (xls/729kB)
From 2010 to 2011, the overall tax burden significantly increased for most of the family types due to reduced basic tax relief. Average one-earner couples with 2 children saw their tax wedge increase by 2.1 percentage points to 25.0% of total labour costs. For single parents earning 67% of the average wage, the tax wedge rose by 1.8 percentage points to 23.6% of total labour costs. The tax wedge also increased by more than 1 percentage point for single taxpayers earning 67% of the average wage and two-earner couples with 2 children where one spouse earns the average wage and the other spouse 67% of it; their tax wedges rose to 36.1% and 32.8% of total labour costs, respectively. Single workers with average earnings experienced an increase of 1 percentage point in their tax wedge that rose to 38.9% of total labour costs. The increase was less significant for single taxpayers earning 167% of the average wage; their tax wedge rose by 0.5 percentage points to 40.8%.
Many employers in the Slovak Republic contribute 9% of their employees’ gross wage earnings to a privately-managed pension fund and 0.6% to social funds. These “non-tax compulsory payments (NTCPs)” represent an increase over and above the overall tax burden. E.g. , in 2011, the compulsory payment wedge for the average single worker was 43.2% compared with the corresponding tax wedge of 38.9%. More information on these NTCPs in the Slovak Republic and other OECD countries is included in the OECD Tax Database at www.oecd.org/ctp/taxdatabase.
The tax wedge in Taxing Wages is calculated on the basis of the average gross wage earnings of full-time employees in the private sector (including employees at management level). The corresponding 2011 annual average gross wage for the Slovak Republic was EUR 9 658.
Graphical Exposition of the 2011 Estimated Tax Burden
The graphs in this section show the estimated tax burden on labour income in 2011 for gross wage earnings between 50 per cent and 250 per cent of the average wage (AW). They cover four family types with the average and marginal tax wedge presented in a separate graph for each:
- single taxpayers without children,
- single parents with 2 children,
- one-earner married couples without children, and
- one-earner married couples with 2 children
There are two graphs for each family type – one showing the average tax wedge as a percentage of total labour costs (TLC) and the corresponding net personal average tax rate as a percentage of gross earnings; the other showing the marginal tax wedge and the net personal marginal tax rate. Each graph presents a breakdown of the tax wedge into five separate components as a percentage of TLC:
- central income taxes,
- local income taxes,
- employee social security contributions,
- employer social security contributions, and
- family benefits.
Download the AVERAGE graphical expositon file, 2011 (XLS/609kB)
Download the MARGINAL graphical expositon file, 2011 (XLS/644kB)
Observations from the OECD concerning the data for 2011 can be found within the publication.
Special Feature: Wage Income Tax Reforms and Changes in Tax Burdens in the Slovak Republic: 2000-2009
The Special Feature of the 2010 edition of the Taxing Wages report calculates the changes over time in the tax burden on wage income ranging from 50% to 250% of the average wage by comparing the tax burden in 2009 with the tax burden in 2000 and calculates the respective contributions of changes in income taxes, employee social security contributions, employer social security contributions and cash benefits. The analysis focuses on changes in the average and marginal tax wedge as well as changes in the net personal average and marginal tax rate.
Change in the average tax wedge (2000 - 2009) (xls/1.5Mb)
Change in the marginal tax wedge (2000 - 2009) (xls/1.2Mb)
Change in net personal average tax rate (2000 - 2009) (xls/1.5Mb)
Change in net personal marginal tax rate (2000 - 2009) (xls/1.2Mb)
A guide for interpreting the attached special feature country charts (doc/350kB)
More Information
A detailed description of the tax system in Slovak Republic and the associated calculations for the tax wedge are included in Taxing Wages 2010.
Comparative analyses comparing country data can be found on our free online database OECD.StatExtracts, under: Public Sector, Taxation and Market Regulation > Taxation > Taxing wages.
Access to the complete dataset shown in the Taxing Wages report, including detailed country information, is through subscription. For details on how to subscribe please visit our "Getting Online Access" page at the OECD Library website.
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