Austria income tax calculator

Austria abolished cold progression, and publishes the arithmetic

In most countries, inflation raises tax without anyone voting for it. Wages rise, thresholds do not, and a larger share of income crosses into higher bands. It is called cold progression or bracket creep, and it is the quietest tax rise there is.

Austria legislated it away in 2023. Every year the thresholds are raised automatically: two-thirds of the measured inflation rate applies by law, and the government allocates the remaining third across the bands as it chooses.

For 2026 the measured rate was 2.6% and the bands rose by 1.73%. The tax-free threshold went from €13,308 to €13,539, the 30% band from €21,617 to €21,992, and so on up the scale.

You can check it: €13,308 × 1.01733 is €13,539, and the same multiplier reproduces every other threshold to within a few euros of rounding. This site's tests do exactly that, which is an unusual thing to be able to assert about a tax scale.

One band is deliberately excluded. The 55.0% rate above €1,000,000 is not indexed, so inflation erodes it year after year — a slow tightening that is a policy choice rather than an oversight.

The Zuschlag, and the marginal rate it hides

Every Austrian employee gets a Verkehrsabsetzbetrag of €496 — a flat credit against the tax, applied automatically by the employer, notionally covering the cost of commuting.

Lower earners get a supplement on top: a Zuschlag of €804 for anyone with income up to €19,761, tapering evenly to nothing at €30,259.

That taper is the interesting part. Across €10,498 of income the credit falls by €804, which is 7.66% of every extra euro. Add the 30% band underneath and the real marginal rate in that range is about 37.66%.

It appears in no rate table, and it lands on exactly the income range where an Austrian worker is most likely to be considering extra hours. It is the same mechanism as the Dutch credit tapers, the French décote and the UK allowance withdrawal, at a different point on the scale.

This calculator measures the marginal rate rather than reading it off the band, which is the only way to get it right in that stretch.

The Familienbonus Plus, a credit rather than an allowance

Austria delivers family support through a credit against the tax: €2,000 a year for each child under 18, and €700 for an older child while family allowance is still being drawn.

Because it comes off the tax rather than off the income, it is worth the same to every family that can use it — the same design as Ireland's credits and Canada's basic personal amount, and the opposite of a deduction.

The qualification is "worth the same to every family that can use it", and the qualification matters. The Familienbonus is non-refundable, so a household whose tax is already below €2,000 cannot absorb the whole of it. The Kindermehrbetrag exists to reach those households and is not modelled here.

It replaced a deduction-based system in 2019, and the change moved the benefit down the income distribution: a deduction of the same size had been worth 50% of itself to a top earner and 20% to someone in the second band.

On €50,000 of taxable income the scale charges €11,447, the Verkehrsabsetzbetrag takes off €496, and the bill is €10,951 — an effective rate of 21.9%. Two children would reduce it by €4,000.

The 13th and 14th salaries, taxed at 6%

Austrian employment contracts customarily pay fourteen monthly salaries, not twelve: a holiday payment in summer and a Christmas payment in November or December.

Those two are not taxed on this scale. Above a small exempt amount they are charged at a flat 6% — far below the marginal rate almost anyone faces on their ordinary pay.

The practical effect is large and it is why an Austrian annual tax bill is well below twelve times a monthly one. It is also why comparing Austrian gross salary with, say, German or Dutch gross salary needs care about whether the figure is twelve months or fourteen.

The concession is capped: beyond an annual limit the extra payments fall back into the ordinary scale, which affects higher earners rather than typical ones.

Nothing about it is modelled here. This page computes the tax on annual taxable income under the ordinary tariff, which is what the published scale describes.

The scale at four incomes

Annual taxable income, with the Verkehrsabsetzbetrag and its Zuschlag applied and nothing else.

On €25,000: €2,593 on the scale, less €899 of credits — €1,694, an effective rate of 6.8% against a band of 30%.

On €40,000: €7,447 on the scale, less €496 of credits — €6,951, an effective rate of 17.4% against a band of 40%.

On €60,000: €15,447 on the scale, less €496 of credits — €14,951, an effective rate of 24.9% against a band of 40%.

On €120,000: €43,721 on the scale, less €496 of credits — €43,225, an effective rate of 36.0% against a band of 50%.

Between the first two lines the real marginal rate is higher than either band, because the Zuschlag is being withdrawn across most of that range.

How Austria compares with the rest of this site

Against Germany, the neighbour, the two are structurally similar and expressed completely differently. Germany writes a continuous formula with no thresholds; Austria writes seven clean bands and then indexes them annually. Both reach 45%, and Austria goes to 55.0% above €1,000,000.

Against Canada, the indexation is the shared feature. Canada indexes federal brackets to inflation as a matter of course; Austria legislated the same principle more recently and more explicitly, and publishes the multiplier.

Against the Netherlands, both hide a marginal rate in a tapering credit. The Dutch version is larger and sits in the middle of the scale; the Austrian one is smaller and sits near the bottom.

Against Ireland, the family support mechanism rhymes: both use non-refundable credits, and both leave the lowest-income households unable to absorb them fully.

What Austria has that almost nothing else here does is a statutory answer to bracket creep. Most countries adjust thresholds when a budget decides to; Austria adjusts them because the law says so, and shows its working.

Four ways an Austrian estimate goes wrong

Using last year's thresholds. They move every year by law. The 2025 tax-free amount was €13,308 and the 2026 one is €13,539, and every band above moved with it.

Reading the marginal rate off the band. Between €19,761 and €30,259 the Zuschlag is being withdrawn and the real rate is several points higher.

Multiplying a monthly figure by twelve. Austrian pay is customarily fourteen monthly salaries, and the two extra ones are taxed at 6% rather than on this scale.

Forgetting social insurance. It comes off gross pay before this scale ever applies, and it is a large share of the gap between gross and net.

Social insurance, the deduction that comes first

Austrian social insurance is deducted from gross pay before the income tax scale ever applies, and it is a large share of the gap between gross and net.

It covers four things: health insurance, pension insurance, unemployment insurance and accident insurance. The employee pays a percentage of gross pay for the first three; accident insurance is borne by the employer.

Contributions are capped at a monthly ceiling — the Höchstbeitragsgrundlage — above which nothing further is charged. That makes the combined burden regressive at the top, in the same way the US Social Security tax and Swiss unemployment insurance are.

The employer pays a further set of contributions on top, plus municipal payroll tax and a family burden equalisation levy, none of which appears on the employee's payslip.

Because contributions come off before tax, they reduce the tax as well as the take-home. Entering a gross salary into this calculator therefore overstates the tax as well as understating the deductions.

The Arbeitnehmerveranlagung, and why filing is usually worth it

Most Austrian employees have their tax settled by the employer through monthly withholding, and most are not required to file. Filing anyway is the standard advice, and usually produces a refund.

The reason is that withholding applies the credits it knows about and not the deductions it does not. Work-related expenses, the commuter allowance where it applies, special expenses such as certain insurance and donations, and extraordinary burdens including medical costs all have to be claimed.

Someone who worked only part of the year is the clearest case: withholding is calculated as though each month's pay continued all year, so an interrupted year almost always over-deducts.

The claim can be made for up to five years back, which is unusually generous and is why the advice is worth repeating rather than assuming everyone already knows.

A low earner with too little tax to absorb the credits can get part of them refunded through the SV-Rückerstattung, which turns a non-refundable credit into a partly refundable one. It is not modelled here.

What abolishing cold progression actually changed

Before 2023, Austrian thresholds moved when a government decided to move them. Between adjustments, inflation raised the real tax burden without any vote — the standard arrangement almost everywhere on this site.

The reform did two things. It made two-thirds of the adjustment automatic and non-discretionary, and it required the remaining third to be allocated explicitly, with published reasoning, rather than simply retained.

The effect is visible in the sequence: thresholds rose 6.3% for 2023, then by an amount above measured inflation for the first four bands in 2024, then 3.83% in 2025 and 1.73% in 2026. The percentages track measured inflation rather than political appetite.

The €1,000,000 threshold is excluded by design, so the 55.0% band tightens in real terms every year that the rest of the scale loosens. That is a deliberate choice made visible by the same mechanism that removed the invisible one.

Whether the policy is right is a matter for Austrians. What makes it worth a section here is that it is the only case among twenty-five countries where an ordinary reader can check the arithmetic of their own bracket movement against a published inflation figure.

Capital income, and the flat rates outside the scale

Austrian investment income does not go through the seven bands. Interest and dividends are charged at a flat withholding rate, and gains on securities at a flat rate of their own — final taxes that end the matter.

Rental income does go through the ordinary scale, and gains on real property are charged at a separate flat rate with rules that differ sharply depending on whether the property was acquired before or after a cut-off date.

Austria has no wealth tax and no inheritance or gift tax, both abolished, which puts it in an unusual position among its neighbours: a top marginal rate on earnings of 55.0% alongside no tax at all on transferring what those earnings bought.

The combination is one of the sharper illustrations on this site of why comparing top marginal rates across countries says so little. Austria's is the second highest here, behind Portugal's combined 53% only on employment income and ahead of it once the €1,000,000 band is reached.

None of the flat regimes is modelled on this page, which computes the ordinary tariff on taxable employment income.

Werbungskosten, Sonderausgaben and außergewöhnliche Belastungen

Austrian tax law sorts deductions into three named categories, and the names are worth knowing because they determine where in the computation a claim lands.

Werbungskosten are costs of earning income: professional literature, work equipment, training, union dues, and the Pendlerpauschale for commuting where public transport is unreasonable or unavailable. Everyone gets a small automatic amount; claiming more requires evidence.

Sonderausgaben are special expenses: certain insurance and housing costs under transitional rules, church contributions within a cap, donations to approved organisations, and voluntary pension contributions. A recent addition covers the cost of replacing a heating system and installing renewable energy.

Außergewöhnliche Belastungen are extraordinary burdens: medical costs, disability-related expenses, childcare in defined circumstances, and disaster damage. Most are subject to a deductible that rises with income, so a modest claim produces nothing.

None is applied here. Together they are the main reason the Arbeitnehmerveranlagung is worth filing, and the main gap between this figure and an actual Austrian assessment.

Where Austria sits, in one paragraph each

On level. Austria's total tax and social contribution burden is among the highest in the OECD, and the income tax scale is only part of why. The gap between employer cost and net pay is wide, and most of it is contributions rather than tax.

On shape. The scale is conventional and the mechanisms around it are not. Indexed thresholds, a tapering commuting credit, a large non-refundable child credit and a 6% rate on two months of the year add up to a system that behaves quite differently from how its bands read.

On stability. Because indexation is automatic, the scale changes every single year — which means an Austrian figure without a year attached is worth nothing, and a figure with one can be checked against a published multiplier.

On the top. 55.0% above €1,000,000 is the highest headline rate of any country covered on this site, and it is temporary, unindexed, and reaches almost nobody.

On what to do with this page. Enter taxable income rather than gross salary, treat the result as national income tax only, and read the marginal rate line rather than the band if your income is between €19,761 and €30,259.

The credits for single earners and single parents

Two further credits sit alongside the Familienbonus and are not applied on this page, though many households qualify for one of them.

The Alleinverdienerabsetzbetrag goes to a sole earner in a household with at least one child, where the partner's income stays below a defined limit. The Alleinerzieherabsetzbetrag goes to a single parent on the same terms without the partner test.

Both are fixed amounts that rise with the number of children, and both are indexed annually under the same cold-progression law that moves the thresholds. Both are also refundable in part, which makes them reach households the Familienbonus alone cannot.

The Kindermehrbetrag exists for exactly that gap: a payment for households whose tax is too small to absorb the Familienbonus, conditional on having worked or drawn childcare benefit for part of the year.

Together they mean an Austrian household with children and a modest income can end the year with a negative income tax, which the seven-band scale on its own gives no hint of.

Questions

How much income tax do I pay on €50,000 in Austria?

€10,951 for 2026 — €11,447 on the scale less the €496 Verkehrsabsetzbetrag, an effective rate of 21.9%. Social insurance is deducted from gross pay before this and is not included.

What are the Austrian tax brackets for 2026?

Seven bands: nothing up to €13,539, 20% to €21,992, 30% to €36,458, 40% to €70,365, 48% to €104,859, 50% to €1,000,000 and 55.0% above. Every threshold except the last rose by 1.73% from 2025.

Why do Austrian tax brackets change every year?

Because cold progression was abolished by law in 2023. Two-thirds of the measured inflation rate is applied to the thresholds automatically and the government allocates the remaining third. For 2026 inflation was measured at 2.6%, so the bands rose 1.73%. The €1,000,000 threshold is deliberately excluded.

What is the Verkehrsabsetzbetrag?

A flat credit of €496 against the tax for every employee, applied automatically by the employer to cover commuting costs. Anyone with income up to €19,761 gets a further €804, tapering to nothing at €30,259.

Why is my real marginal rate higher than my bracket?

If your income is between €19,761 and €30,259, the Zuschlag is being withdrawn as you earn — 7.66% of every extra euro. On top of the 30% band that makes the real rate about 37.66%, and it appears in no published table.

How much is the Familienbonus Plus?

€2,000 a year per child under 18, and €700 for an older child still drawing family allowance. It comes off the tax rather than the income, so it is worth the same at any income — but it is non-refundable, so a household with less tax than that cannot use all of it.

Are the 13th and 14th salaries included?

No. Austrian pay is customarily fourteen monthly salaries, and the holiday and Christmas payments are taxed at a flat 6% above a small exempt amount rather than on this scale. That is why an annual Austrian tax bill is well below twelve times a monthly one.