Korea’s average tax burden for wage earners with and without children differ by roughly 2.3 percentage points, the fifth lowest among the Organization for Economic Cooperation and Development countries, recent data showed Sunday.

According to the OECD’s Taxing Wages 2016 report, Korea’s “tax wedge” -- the proportion of taxes in an individual’s wage income -- for households with one earner and two children stands at 19.6 percent, compared to 21.9 percent for working single-person households.

The tax wedge includes personal income tax, employer- and employee-paid payroll and social security taxes, minus any cash benefits received by the taxpayer. A lower tax wedge signifies less tax burden for taxpayers.

Thirty-two out of 34 OECD member states held a lower tax wedge for households with one earner and two children than for single-person households, meaning most governments offer some form of tax benefits to families with children.

Among the members, Korea held the fifth smallest difference in tax wedge between working households with and without children, signifying comparatively weaker tax benefits and limited subsidies granted to those raising a family here.

Mexico and Chile displayed an identical tax wedge for both types of households, whereas Greece and Turkey saw a difference of 1.2 percent and 1.4 percent respectively.

Luxembourg showed the highest tax wedge difference of 22.4 percentage points between households with one earner and two children (15.9 percent) and single-person households (38.3 percent), followed by Slovenia at 18.9 percentage points.

The U.S. showed a tax wedge difference of 11 percentage points, while Germany showed a difference of 15.5 percentage points and France a difference of 8 percentage points. The U.K. and Japan showed a tax wedge difference of 4.5 percentage points between the two household types.

“It’d be optimal to reform Korea’s taxation system to provide wider benefits for married couples with children,” Ahn Jong-suk, a researcher at the Korea Institute of Public Finance, was quoted as telling Yonhap News Agency.

“However, it is difficult for Korea to expand its subsidies, as the average taxation rate is already low right now,” he said.

In 2015, Korea had the third lowest employee net average tax rate for an average single worker at 13.8 percent, compared to the OECD average of 25.5 percent, according to the report.

By Sohn Ji-young (jys@heraldcorp.com)