How much is our work taxed in Australia compared to other countries?

How much tax do Aussie employees pay compared to employees in other countries? We take a look at the latest OECD report – and find out how Australia compares to the OECD average.

The OECD recently released its latest Taxing Wages 2022 report, and it’s interesting to see where Australia falls compared to other developed nations when it comes to tax. One of the purposes of this particular paper was to look at the impact of Covid-19 on how workers were taxed across 38 different nations – and it makes for interesting reading!

Australia’s ‘tax wedge’ falls just below the OECD average

The ‘tax wedge’ is the gap between what the employer pays for labour and what the worker takes home, and there’s an enormous range between nations. In Belgium, workers lose 52.6% of their income to taxes, while in Colombia it’s zero.

Here in Australia, the tax wedge in 2021 was 27.1%. That’s considerably lower than the OECD average of 34.6% but not quite as low as our Kiwi friends across the ditch, whose tax wedge was an inviting 19.4%. The Aussie wedge compares well with other developed nations, dipping just below the USA’s figure of 28.4 and undercutting the main European results. Germany and France have figures in the high 40s and even the UK’s score of 31.3% looks less healthy than the Aussie wedge.

Here are a few other countries’ tax wedge numbers, to put things in perspective.

2021 tax wedge by country

  • Belgium – 52.6%
  • France – 47%
  • Netherlands – 35.3%
  • OECD average – 34.6%
  • United Kingdom – 31.3%
  • United States – 28.4%
  • Australia – 27.1%
  • New Zealand – 19.4%
  • Colombia – 0%

You can see the full table here.

Starting a family cuts your Aussie tax bill

Across all 38 nations analysed, families with children pay a lower tax wedge than single earners without children. The average was 24.6% for single-earner families with children, compared to 28.8% for double-earner families with children and 34.6% for individuals without children.

In Australia, there’s a clear advantage to starting a family. The single-earner family tax wedge was 19.1%, while the double-earner family was 24.9% and the single person tax wedge was 27.1%.

Are you paying the right amount of tax?

If you think that you may not be paying the right amount of tax, give us a call or send us an email. We can talk to you about how you structure your business and personal assets, and ways to help you only pay the tax you need to pay.

Get in touch, we’d love to hear from you.

And just in case you wonder how we can assist, check out our list of services here.

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We’ve Helped These Clients Focus Less On Their Finances, And More On Their Purpose

Here’s what they had to say:

We have had an enduring
relationship because Clare goes
beyond being just a “service
provider”.

The team at Purposely are always
invested in my clients and my own
organisations success. They partner
with their customers, accountants
and auditors to deliver tailored
solutions and they are always
proactive in their approach. If you are
looking for dedication and a long-
term partnership, these are the guys
for you.

Varis K.

VLK Accounting

We engaged with Clare and the
team to bring our organisation
into the cloud and we haven’t
looked back since.

It’s now 4 years down the track and
the Purposely team continue to
provide such an invaluable service to
our business. They understand the
complexities of working with remote
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everything we need with the greatest
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audit queries. They have changed the
way we operate for the better.

Anna and Steve H.

Noonkanbah Aboriginal Corporation

Purposely has looked after my
business for a long time now and
I am very happy with the service.

They are very professional and I know
things are always up to date. Clare
and her staff are great to deal with
and I trust them, that’s important. I
would not be in business today if I did
not find them.

Les R.

Quic Dig (WA) Pty Ltd

Nothing is too much trouble!

I have never felt so supported in
business… Since joining forces with
Purposely, I have become more
financially aware, have a much better
understanding of my own business
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Kellie G.

A* Star Cleanings

Purposely have been 
(and remain) invaluable to us in
making sure that this part of our
business is handled efficiently 
and with careful attention
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Paying our casual workers on time is
critical to the success of our business.
Mistakes and delays are not easy to
absorb in a small business and it’s a
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feel the same way. Timely, accurate
advice to help our business run
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Dirima C.

Dortch & Cuthbert Trading Trust

The integrity of the Purposely
team is beyond question and we
know we can always rely on them
to prioritise the best interests of
our organisation.

Marrugeku engaged with Purposely in
2017 to handle all our bookkeeping
and payroll requirements. They
consistently show up, week in week
out with efficiency and good humour.
Even during the challenging times
faced by the entertainment industry
due to COVID-19, Purposely supported
us all the way. The Purposely team
work hard to manage the complexities 
of payroll for staff in Live
Performance. And each year they
strive to achieve a smooth audit, 
showing their dedication.

Guy B.

Marrugeku Inc.

The team at Purposely has been
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Purposely did an amazing job at
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reminders may sometimes feel like
hounding, we recognise that it is
precisely what our business needs.
We highly recommend them for their
professionalism and commitment to
delivering results.

Holly G.

Cameron Herbert Constructions Pty Ltd

I have been working with
Purposely for a couple of years
now and in this time the team
has shown significant support to
me and my business.

Their technical expertise has helped me get my business in order leaving me to focus on what I do best. They communicate on a weekly basis so I know where things are at and what is yet to be done. Everything is completed and lodged on time and in full. I trust that they handle my data confidentially and would recommend them to anyone who is seeking the “next level” in terms of a bookkeeper.

Luke D.V.

Swat Suspension Wheel & Tyre Pty Ltd

I’m an exercise physiologist,
extremely busy and very
successful and wouldn’t be
where I am today without the
help of Purposely.

They have saved me a lot of time and
money helping my business to become
more streamlined and efficient, which
has saved me a lot of stress. I would
highly recommend Purposely as they
are very professional and very easy to
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Chris A.

Chris Anastasios Exercise Physiology

We have been working with Clare
and her team for the last 6 years.

Our initial contact with them came
from the difficulties we faced in
integrating our point of sale system
with our accounting software. We
required someone with technical
expertise to fix this issue, and Clare
immediately got on with the job. Since
then, Clare and her team have shown
commitment to adapt to our evolving
needs and implement effective
systems and processes, all of which
have contributed to enhancing our
overall operations.

Vanessa A.

Think Water Broome

We had no second thoughts on choosing Purposely.

My biggest pain point was not having clarity on the business financials from the previous bookkeepers. It was frustrating to try to communicate with them regarding anything. That’s when we found Purposely (Clare), our first impression was she was very professional and knowledgeable on what she does. We now have clarity, trust and good communication whether it comes to processing the payroll or bookkeeping or even sorting out the invoices. Clare and her team are always there to support and help and simplify things for us.

Bikram P.

Dragonfly Cafe

We have been dealing with Clare and Purposely for over 4 years because they handle the bookkeeping for one of our clients.

We can thoroughly recommend them to anyone that needs an efficient, accurate and easy to work with bookkeeper. We have always found their work to be of the highest quality.

Peter W.

Accounting on Tap Pty Ltd

I have nothing but praise for Clare & the team, they have always bent over backwards to help.

Myself & my business have been involved with Purposely for many years now after our internal Book-keeper decided to retire & suggested I look into what was/is Purposely. Purposely are Kimberley locals & understand how difficult it can be working remotely to run a business in this part of Australia. The team adapted to my requests & business style very quickly and I have to admit I haven’t always been the easiest person to work with due to the remote nature of our work & my lack of computer skills. GND will continue to use Purposely for the foreseeable future of our business.

Sam C.

Great Northern Demolition Pty Ltd

Since we started working with Purposely in 2018, we’ve witnessed their unique approach to bookkeeping which sets them apart.

Their commitment to due diligence and technical expertise exceeds the standards of traditional bookkeeping models. Their thoroughness extends beyond skilful application and experience, encompassing excellent communication with both clients and their accountants/auditors. With an experienced staff member always at hand, they provide a reliable asset to any organization fortunate enough to collaborate with them. Purposely offers an outstanding solution for organizations seeking outsourced financial management, whether it be for partial or comprehensive support.

Desiree M.

Male & Co

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