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In Spain, the tax and social security burden on wage income has not changed much when comparing the tax wedges in 2009 with the values in 2000. The difference between the average tax wedge (average income taxes plus employee and employer social security contributions minus cash transfers as a percentage of total labour costs) in Spain and in the OECD on average is small for single taxpayers at low, average and especially high earnings. The tax wedges for one-earner married couples with 2 children at average earnings and especially for lone parents with 2 children at 67% of the average wage, however, are considerably above the OECD average.

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In 2009, the overall tax burden slightly increased for some of the households included in the Taxing Wages Report, although on average, the changes have been very small. For single employees with an average wage the tax wedge slightly increased with 0.2 percentage point to 38.2% of the total cost to the employer of employing that person (“total labour costs”). The tax wedge increased the most for one-earner married couples with 2 children at average earnings, for two-earner married couples with 2 children where the principal earns the average wage and the spouse earns two-thirds of the average wage and for single individuals earning five-thirds of the average wage; the tax wedge of these families increased with 0.3 percentage point to respectively 32.3%, 34.8% and 41.6% of labour costs.

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 2009 annual average gross wage in Spain was EUR 23,943.

More Information

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

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