Spain, one of the seven OECD countries where taxation rose more than wages in 2025

BarcelonaSpain was one of the seven countries in the Organisation for Economic Co-operation and Development (OECD, the think tank of the world's most developed economies) where last year the rise in taxes levied on salaries more than ate up wage increases, resulting in a loss of real income. The calculation, however, does not take into account the value of public services received by citizens, which are financed by taxes.

In real terms (discounting inflation), wages in Spain rose by 1.2%, but the average tax rate for individuals increased by 1.5%, explains the OECD, so that purchasing power after taxes decreased by 0.3%. In its annual report on the so-called tax wedge (the percentage of salary that income tax and contributions represent) published this Wednesday, the organisation points out that this same trend of a greater increase in taxation also occurred last year in Austria, Estonia, Germany, South Korea, Mexico, and the United Kingdom.

The largest losses in purchasing power after taxes, calculated by taking the average wage levels of each country as a reference, were observed in Estonia (11.5%), the United Kingdom (2.7%), and Mexico (2.4%), in all three cases due to tax increases greater than in Spain. There were also three other countries (Canada, Israel, and Japan) where income in real terms fell or stagnated, but because wages decreased when inflation was discounted.

However, in 28 of the institution's member states, real incomes progressed because salaries increased, and when taxes also increased, it was to a lesser extent.

The indirect benefits of taxes

The study's authors did not want to calculate this loss or gain in purchasing power after taxes because, according to him, this indicator "only gives a partial view of the overall disposable income of workers". The reason is that it does not take into account the benefits that may be obtained from other measures by public authorities that have consequences on this purchasing power, such as, for example, reducing the cost of basic products, healthcare, or education.

The tax wedge, that is, the sum of income tax and employee and employer contributions, rose last year in 24 OECD countries, while it decreased in 11 and remained unchanged in the remaining three.

It represented an average of 35.1% of salary, 0.15 percentage points more than in 2024, while in Spain it was 41.4% of salary, with an increase that was double that of the organization as a whole, specifically 0.31 points, mainly due to the increase in income tax (0.25 additional points).

Spain was, for a single worker without children (which is the main reference in comparative studies), the tenth country with the largest tax burden on wages, far from those that headed the list: Belgium with 52.5%, Germany with 49.3%, France with 47.2%, Austria with 47.1%, and Italy with 45.8%.