Page "Labour power" Paragraph 25

The labour-costs of an employer are not the same as the real buying power a worker acquires through working.

An employer usually also has to pay taxes & levies to the government in respect of workers hired, which may include social security contributions or superannuation benefits.

In addition there are often also administrative costs.

So, in the United States for example, out of the total expenditure on labour by employers, the workers get about 60 % as take-home pay, but about 40 % consists of taxes, benefits and ancillary costs.

Employers may be able to claim back part of the surcharge on labour by means of various tax credits, or because the tax on business income is lowered.