In 2025, single Spanish worker without children allocated 41.4% of their gross salary to taxes and Social Security contributions. This compares to an average “tax wedge” of 35.1% across the Organization for Economic Co-operation and Development (OECD), according to the “Taxing Wages” report published by the advanced economies’ think tank.
While the tax burden on labor costs in the OECD increased by an average of 0.15 percentage points compared to 2024, Spain saw an increase of 0.31 percentage points over the previous year.
Breaking down this increase, the largest upward difference corresponded to personal income tax, which rose by 0.25 percentage points in Spain, compared to an average decrease of 0.01% in the OECD. Meanwhile, employee social security contributions remained stable, and employer contributions rose by 0.05 percentage points (compared to OECD averages of 0.01 and 0.15 points, respectively).
Spain’s tax wedge thus ranked 10th out of the 38 OECD countries. The ranking is led by Belgium, where single workers without children have 52.5% of their gross salary withheld. In fact, Belgians are the only ones required to transfer more than half of their gross salary to the Administration and Social Security.
Following Belgium, the countries with the largest gap between gross and net salary are Germany (49.3%), France (47.2%), Austria (47.1%), Italy (45.8%), and Slovenia (45.3%). Conversely, the OECD countries with the lowest tax wedges in 2025 were Colombia (0%), Chile (7.5%), New Zealand (20.8%), and Mexico (21.7%).
The OECD report reveals that Spain’s 41.4% tax wedge reflected a personal income tax (IRPF) weight of 13.1% on the gross salary, slightly below the OECD average of 13.4%.
However, social security contributions paid by companies accounted for 23.4% and those paid by workers for 5%. In contrast, the average for the developed nations’ think tank members stood at 13.5% and 8.1%, respectively.
At the beginning of April, the OECD warned Spain that its tax system imposes a high burden on labor, which discourages job seeking and job creation. Consequently, it recommended that the country shift toward “less distorting” taxes, such as VAT and environmental levies, as well as gradually reducing benefits to strengthen labor incentives.
