Informality and the first hire

Hiring formally can mean taking on costs and administrative steps before a small business has predictable revenue. Reseated’s Team Council is examining whether a simpler, phased approach could make a business’s first ten hires easier to undertake.

What happened

OECD’s Taxing Wages 2026 reports tax-wedge figures for 2025, including an OECD average of 35.1% and substantial differences among the country cases in the report.[1]

The OECD reports a 2025 average tax wedge of 35.1% across OECD countries; its listed country figures range from 20.8% in New Zealand to 49.3% in Germany.[1]
The ILO estimates that MSMEs account for about 70% of employment worldwide and that around 80% of them operate in the informal economy.[2]
Reseated’s July 2 Team Council data records 58 reports concerning hiring costs, submitted by members in 20 countries.

What it means for small businesses

A cross-country average can show that employment costs differ, but it cannot tell an owner what their own next hire will cost under local rules.

The Team Council’s early report base is a signal for further examination, not proof that one policy change would resolve informality or hiring costs everywhere.

The council is seeking phased social contributions, one-stop payroll registration and predictable rules for a business’s first ten hires.