Argentina has positioned itself among the three countries with the highest tax burden on formal employment worldwide, according to a study by the Argentine Institute of Fiscal Analysis (Iaraf).

The report analyzed 39 nations and ranked Argentina third, with personal contributions and employer contributions accounting for 34.6% of the total labor cost.

Only Austria (35.7%) and France (35%) recorded higher tax burdens, while the average among countries belonging to the Organisation for Economic Co-operation and Development (OECD) stands at 21.6%.

The breakdown shows that employee contributions in Argentina account for 13.4% of the total labor cost. The OECD average is 8.1%. On this measure, Argentina ranks seventh globally, behind countries such as Slovenia, Lithuania, and Germany. Meanwhile, nations like New Zealand, Denmark, and Colombia do not require mandatory employee contributions.

On the other hand, employer contributions in Argentina amount to 21.2% of the total labor cost, well above the OECD average of 13.4%. This figure places Argentina tenth worldwide, with France, the Czech Republic, and Estonia leading this category. In some countries, such as New Zealand, Chile, and Colombia, employers are not required to bear this burden.

Argentina should urgently prioritize a reform that fosters diverse forms of employment and reduces the overall cost of formal work in order to boost and modernize its labor market.

Photo of Sasha • Make Stories Studio in Unsplash