In many countries, income is taxed at the household level with a progressive tax schedule. This paper analyzes the impact of joint progressive taxation for employment and wages of dual-earner households in the presence of labor market frictions. We develop a directed search model in which firms offer wage contracts to workers in single and couple households, anticipating that workers may quit into other jobs or non-employment in response to spousal income and the tax system. The model is calibrated to replicate job-finding, job-to-job transition, layoff and quit rates of the U.S. labor market, and a progressive joint tax schedule and UI benefits at the individual level. When comparing the benchmark economy to a counterfactual scenario with individual taxation, we f ind that replacing the tax rules for couples with those for singles reduces the share of non-employed workers by one-tenth. Furthermore, it increases wages by about 6 percent.