Irish Income Taxes Below EU Average and Closer to US Levels, OECD Data Shows

Irish workers pay less tax than the European Union average, with rates more comparable to the United States than to high-tax EU economies such as Belgium, France and Germany, according to the Organisation for Economic Co-operation and Development (OECD).

The so-called “tax wedge” for a single Irish worker earning the average wage is 32 percent – slightly above the US level and significantly below Belgium’s 52.5 percent, the OECD data reveals. This measure includes income tax, employee and employer social security contributions, minus any cash benefits received by working families.

Despite a broader trend across OECD countries where taxes on wages have reached their highest level in almost a decade, Ireland is bucking the trend. The personal average tax rate for a single worker without children fell by 3 percent in the latest assessment, making Ireland one of only 13 OECD member countries to see a decline in personal tax rates. Only Australia, Latvia, and Italy recorded larger reductions.

Gross wages in Ireland were 3.8 percent higher than in 2024, and after adjusting for 2 percent inflation, single workers without children were, on average, 1.8 percent better off before tax.

Across the OECD, the average tax burden for a single worker with no children earning the national average wage was 35.1 percent of employment costs in 2025 – up from 34.9 percent in 2024 and the highest level since 2016. The tax wedge increased in 24 of the 38 OECD countries last year for a typical single worker, including in Germany, Israel, and Estonia.

The findings underscore Ireland’s relatively competitive position on labor taxation within the developed world, even as many peer nations raise taxes on work to address fiscal pressures.