Recursive function returns undefined

In this arm of your function:

if (taxWage > minWage) {
    // calculates tax recursively calling two other functions difference() and taxStep() 
    tax = tax + difference(taxWage) * taxStep(taxWage);
    var newSalary = taxWage - difference(taxWage);
    taxes(tax, newSalary); 
}

you are not returning a value from the function or setting returnTax. When you don't return anything, the return value is undefined.

Perhaps, you want this:

if (taxWage > minWage) {
    // calculates tax recursively calling two other functions difference() and taxStep() 
    tax = tax + difference(taxWage) * taxStep(taxWage);
    var newSalary = taxWage - difference(taxWage);
    return taxes(tax, newSalary); 
}

There is a bug with your recursion:

taxes(tax, newSalary);

You don't return anything when the condition in the if evaluates to true. You need to change that to:

return taxes(tax, newSalary);

You have the necessary return statement in the else.