The Paris based think-tank, the OECD, has said taxes paid by workers rose last year as higher wages pushed earners into higher tax brackets.
But at the same time, inflation caused real incomes to decline, "resulting in a double blow for workers".
In its Taxing Wages 2023 report, the OECD finds that 17 member countries adjust their income tax brackets in line with inflation.
But 21 countries - including Ireland - adjust their tax brackets on a discretionary basis. The same applies to social welfare payments.
When wages rise, this means more people find themselves in a higher tax bracket, something known as "fiscal drag". Their entitlement to social welfare payments may also decline as their incomes rise.
The OECD has found that the labour tax wedge, defined as income tax plus social security payments minus social welfare benefits as a percentage of wages, went up on average by 1.6% last year.
This was the biggest increase since 2000.
It finds a single worker in Ireland saw their tax wedge go up by 0.2% from 34.5% to 34.7% in 2022. This was very close to the OECD average of 34.6%.
The tax wedge for a one earner couple with children is lower, at 20.8% compared to the OECD average of 25.6%.
The reduction in the tax wedge for families with children compared to single workers was 13.9% compared to the OECD average of 8.9%.
