Guide
Comparing salaries between countries — which tax number do I use?
The tax wedge is not your tax rate
Two official OECD tax figures look interchangeable and are not: one is measured against your gross salary, the other against your employer’s total cost. Using the wrong one misstates every country by the employer’s share — a mistake we made ourselves, twice.
The two numbers
The OECD publishes two tax rates for the same person — a single earner at the average wage. The TAX WEDGE is income tax plus employee AND employer social contributions, divided by the employer’s total labour cost. TAX ON PAY (the net personal average tax rate) is income tax plus only the employee’s contributions, divided by gross salary.
The wedge answers: what share of the total cost of employing someone goes to the state? Tax on pay answers: what share of my salary never arrives? Both are honest. They are not interchangeable, because they divide by different things.
The mistake — ours, twice
On 1 August 2026 we found and fixed this exact error in our own arithmetic, in two places on the same day. Our take-home pay figure multiplied the average gross salary by the wedge — quietly charging the employer’s contributions to the employee’s payslip. Germany showed $38,704 where the honest figure is $46,777, a fifth too low, in 36 countries. Hours later the same bug turned up in our salary calculator.
Nothing crashed, because nothing was broken in the code’s own terms: the arithmetic was valid, only the units were not. Both places now carry structural guards that fail the build if a salary is ever multiplied by the wedge again.
Which to use
Comparing job offers or salaries: use tax on pay — it shares a denominator with the number on your contract. Comparing what employment costs, or how heavily a state taxes work overall: use the wedge. If a site shows you one number without saying which it is, assume nothing.
The data this guide is about