Effective tax rate on entering employment
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This indicator measures the proportion of earnings that are lost to either higher taxes or lower benefit entitlements when a jobless person takes up employment.
It is commonly referred to as "Participation Tax Rate (PTR)" as it measures financial disincentives to participate in the labour market.

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1. Incomes in and out of work are calculated at the family level.
2. The numerator is the change in tax liabilities and benefit entitlements when one family member moves into work. The denominator is the earnings of the person moving into work.
3. Guaranteed Minimum Income (GMI) benefits are included in the calculations, also when the selected main out-of-work benefit is unemployment benefit. Where GMI benefit entitlements change over time, calculations refer to the 2nd month of benefit receipt when the selected main out-of-work benefit are GMI benefits. When the main out-of-work benefit is unemployment benefit users can select different months of benefit claim: 2nd, 4th, 6th, 12th, 18th and 24th. Where benefit receipt is subject to activity tests, such as active job-search or being available for work, these requirements are assumed to be met by all household members.
4. If relevant for the calculation of benefit entitlements, earnings in the previous job are assumed to be the same as those in the new job.
5. Calculations assume entry into full-time work.
6. For couples, if the partner of the person who is moving into work is also in work, they are assumed to work full-time at 67% of the average wage. If they are out of work, it is assumed they do receive any contributory benefits (e.g. because they have expired), but they do meet any behavioural requirements needed to qualify for other types of social benefits.
7. Family benefits are included in the calculations subject to relevant income and eligibility conditions. Calculations for families with children are for families with two children aged 4 and 6. Neither childcare benefits nor childcare costs are considered. Adults are aged 40, are both out of work, and are assumed to have full work capacity.
8. If housing benefits are included in the calculations, these are calculated assuming a household renting in the private market paying rent equal to 20% of the average wage. Rent levels are the same for all family types.
9. Where benefit rules are not determined on a national level but vary by region or municipality, results refer to a “typical” case (e.g. Michigan in the United States, the capital in some other countries). A full description of the policies included in the calculations for each country is available
here.
10. For a detailed description of the assumptions underlying the OECD Tax-Benefit model and the related policy indicators, please see the methodology document.
11. For more information, visit the project webpage or contact the OECD tax-benefit team.

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The first preliminary release of year T-1 indicators is in February. As this release is based on projected wage values and preliminary information on tax rules, any use of these indicators should include the following disclaimer: “Results based on preliminary data and wage estimates”. The second final release of year T-1 indicators is scheduled in April.

Effective tax rate on entering employmentAbstract

This indicator measures the proportion of earnings that are lost to either higher taxes or lower benefit entitlements when a jobless person takes up employment.
It is commonly referred to as "Participation Tax Rate (PTR)" as it measures financial disincentives to participate in the labour market.

Other data characteristics

1. Incomes in and out of work are calculated at the family level.
2. The numerator is the change in tax liabilities and benefit entitlements when one family member moves into work. The denominator is the earnings of the person moving into work.
3. Guaranteed Minimum Income (GMI) benefits are included in the calculations, also when the selected main out-of-work benefit is unemployment benefit. Where GMI benefit entitlements change over time, calculations refer to the 2nd month of benefit receipt when the selected main out-of-work benefit are GMI benefits. When the main out-of-work benefit is unemployment benefit users can select different months of benefit claim: 2nd, 4th, 6th, 12th, 18th and 24th. Where benefit receipt is subject to activity tests, such as active job-search or being available for work, these requirements are assumed to be met by all household members.
4. If relevant for the calculation of benefit entitlements, earnings in the previous job are assumed to be the same as those in the new job.
5. Calculations assume entry into full-time work.
6. For couples, if the partner of the person who is moving into work is also in work, they are assumed to work full-time at 67% of the average wage. If they are out of work, it is assumed they do receive any contributory benefits (e.g. because they have expired), but they do meet any behavioural requirements needed to qualify for other types of social benefits.
7. Family benefits are included in the calculations subject to relevant income and eligibility conditions. Calculations for families with children are for families with two children aged 4 and 6. Neither childcare benefits nor childcare costs are considered. Adults are aged 40, are both out of work, and are assumed to have full work capacity.
8. If housing benefits are included in the calculations, these are calculated assuming a household renting in the private market paying rent equal to 20% of the average wage. Rent levels are the same for all family types.
9. Where benefit rules are not determined on a national level but vary by region or municipality, results refer to a “typical” case (e.g. Michigan in the United States, the capital in some other countries). A full description of the policies included in the calculations for each country is available
here.
10. For a detailed description of the assumptions underlying the OECD Tax-Benefit model and the related policy indicators, please see the methodology document.
11. For more information, visit the project webpage or contact the OECD tax-benefit team.

Validation

The first preliminary release of year T-1 indicators is in February. As this release is based on projected wage values and preliminary information on tax rules, any use of these indicators should include the following disclaimer: “Results based on preliminary data and wage estimates”. The second final release of year T-1 indicators is scheduled in April.