Austria Income Tax Guide Jan–Dec

Overview

Austria has a progressive income tax system with 7 brackets ranging from 0% to 55%. The top rate of 55% (Reichensteuer) applies only to income above €1,000,000 per year. Austria is known for its generous social benefits, comprehensive healthcare, and strong pension system. A notable feature is the 13th and 14th month salary system — most employees receive a Christmas bonus (Weihnachtsgeld) and vacation bonus (Urlaubsgeld), each taxed at a flat 6% rate instead of the normal progressive rates, providing significant tax savings.

Jan–Dec Income Tax Brackets

These are marginal rates — you only pay the higher rate on income within each bracket.

Social Security Contributions

Employee total rate: 18,12%  |  Employer total rate: 21,23%

Austrian employees pay approximately 18.12% of gross salary in social security contributions: Pension insurance (Pensionsversicherung) 10.25%, Health insurance (Krankenversicherung) 3.87%, Unemployment insurance (Arbeitslosenversicherung) 3.0%, and other contributions ~1%. Employers pay an additional ~21%. These contributions fund Austria's comprehensive social safety net including universal healthcare and a state pension.

Special Rules & Tax Benefits

13th and 14th month salaries: Austrian employees typically receive 14 monthly salary payments per year — a Christmas bonus (Weihnachtsgeld) and vacation bonus (Urlaubsgeld). These extra payments are taxed at a flat 6% (up to €620 total tax) instead of the regular progressive rates, saving €3,000–4,000 annually for a €60,000 earner. Familienbonus Plus: A tax credit of €2,000 per child per year (€650 for those with little/no tax liability). No inheritance or wealth tax: Austria abolished both in 2008.

Regional Variations

Austria has uniform federal tax — no significant regional (Bundesland) income tax differences.

Exemptions & Credits

Capital gains tax (27.5%), real estate transfer tax, church contribution (Kirchenbeitrag ~1.1% of income) not included.