The Irish marginal tax rate for a single individual earning about €80,000 in 2009 is 50%, when the provisions of the recent Emergency Budget comes into operation, the Dáil has been told. The effective average tax paid will be 36% of earnings.

Labour finance spokeswoman Joan Burton announced on Tuesday, that the Minister for Finance had confirmed the tax rate figures in a parliamentary reply.

She said the 50% tax rate “is a combination of income tax at 41%, income levy of 4% and health levy of 5%”.

An individual “earning €175,000 or more will have a marginal tax rate of 52% for 2009. This is income tax at 41%, income levy of 6% and health levy of 5%. When tax credits and so on are taken into account, an individual on €80,000 will have an effective average tax rate of 36%. These tax rates have not been seen since the early 1990s,” she said.

The 30-member country OECD said on Tuesday, that taxes on wage earners fell slightly in 2008 in many of the mainly developed countries, with Poland and Turkey showing the biggest drop for an unmarried person earning the average wage, according to the OECD’s annual Taxing Wages publication. But the situation for 2009 remains unclear as fiscal stimulus packages often include tax measures.

The tax burden for a single person on average earnings fell by 3.2 percentage points to 39.7% in Poland, and by 3.0 percentage points to 39.7% in Turkey in 2008, statistics published in Taxing Wages showed.  For a single-earner married couple with two children on average earnings, the tax burden decreased not only strongly in Poland and Turkey but also in Switzerland by 1.9 percentage points to 16.7% and it increased by 3.4 percentage points to 5.5% in Ireland.

Taxing Wagescompares the shares of employee earnings taken by governments in OECD countries through taxation by calculating what it calls the ‘tax wedge’, the difference between labour costs to the employer and the net take-home pay of the employee, including any cash benefits from government welfare programmes. The overall cost of employment is a key factor in companies’ hiring decisions, and thus, indirectly, a factor affecting unemployment trends.

At the top end of the scale, single individuals without children earning the average wage in services and manufacturing industries faced a tax wedge in 2008 of 56.0% of the cost of their labour to their employers in Belgium, 54.1% in Hungary and 52.0% in Germany. In all three of these countries, the average employee takes home less than half of the total cost of employing them that is borne by their employers. At the bottom end of the scale, a single person without children earning the average wage faced a tax wedge of 15.1% in Mexico, 20.3% in Korea and 21.2% in New Zealand. The average for OECD countries was 37.4%.