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The implicit tax rate on employed labour is defined as the sum of all direct and indirect taxes and employees' and employers' social contributions levied on employed labour income divided by the total compensation of employees working in the economic territory increased by taxes on wage bill and payroll. The ITR on labour is calculated for employed labour only (so excluding the tax burden falling on social transfers, including pensions). The implicit tax rate on labour should be seen as a summary measure that approximates an average effective tax burden on labour income in the economy. Source: Structures of the taxation systems in the European Union
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Eurostat, the statistical office of the European Union
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