Overview
- IARAF finds that 34.6% of the total labor cost of a formal worker goes to social charges, placing Argentina behind only Austria and France in a 39-country comparison.
- Employee contributions account for 13.4% of total labor cost and employer contributions for 21.2%, both exceeding OECD averages under the study’s methodology.
- For a worker with an average salary, the personal income tax is effectively zero, which helps place Argentina’s overall tax wedge at 26th out of 39 countries.
- Following INDEC’s July update, income-tax thresholds rose to about ARS 2,624,280 gross for single workers and ARS 3,453,000 for married workers with two children.
- IARAF highlights that high, largely fixed charges discourage formal hiring and competitiveness, with regional contrasts such as Paraguay near 16.5% and Uruguay relying more on worker contributions than employer charges.