Tax burden still seen growing
Salaries may have risen in Greece in 2023, but the tax burden has also increased. For some the rise in wages has taken them into a higher tax bracket, while for most the burden is a result of tax brackets not being adjusted for inflation.
That development led to a reduction in the disposable income of workers, as shown by the annual report of the Organization for Economic Cooperation and Development (Taxing Wages 2024).
Overall, effective tax rates on labor income rose across the OECD in 2023, while inflation remained particularly high. In Greece the burden for families with two children continues to be well above the average of the OECD countries and amounts to 37.5% against 29.5%. However, workers without children also pay high taxes and contributions: Specifically, the total amounts to 38.5%, compared to 34.8% which is the OECD average.
For the single worker earning the median wage, the OECD average tax wedge (tax and contribution burden) in 2023 was 34.8%, up 0.13 percentage points from 2022. This was the second year in a row in which the tax wedge increased, after two years of decline during the pandemic in 2020 and 2021. In Greece an unmarried worker with an average salary had a burden of 38.5%, marking an increase of 0.44 percentage points in relation to 2022.
The average OECD tax bracket for a couple with two children (one member earning 100% of the median wage, the other earning 67% of that) increased by 0.06 percentage points between 2022 and 2023 to 29.5%. For this type of household, the tax wedge increased in 21 countries and decreased in 17. In Greece, which is in seventh place in this category, the burden stood at 37.5%, up by 0.59 percentage points.
The average OECD tax bracket for the single-earner couple with two children rose by 0.08 percentage points between 2022 and 2023 to 25.7%. In Greece, charges in this category increased by 0.73 percentage points and amounted to 37.1%.
