As the primary content of "six priorities"and stability in six areas, it is of great practical significance to stabilize the employment of residents. Under the background of increasing tax reduction and fee reduction, the high rigid cost of enterprises is still a prominent problem that hinders the steady development of enterprises. "Tax wedge" as an important indicator to measure the operating cost of market entities, also has an important impact on the employment of local residents. Firstly, this paper calculates the "Tax wedge"of various regions in China from 2008 to 2018, and concludes that the national average level is 33.4%, in which the enterprise burden and social insurance payment burden account for the main share. This paper further uses the fixed effect model to investigate the effect of "Tax wedge"on employment level, and concludes that "Tax wedge"will lead to the decrease of employment rate and the increase of unemployment rate. Therefore, it is necessary to further reduce the social security payment burden of enterprises, implement the current tax reduction and fee reduction policy, unify the national social security payment proportion, and improve the social security collection and payment, so as to enhance the vitality of regional market entities and stabilize the employment level of residents by reducing the "Tax wedge".