Austria Income Tax Calculator 2026
Calculate your Austrian taxes: Einkommensteuer + Social Contributions
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~18% (employee share)
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Complete Guide to Austrian Taxation
Austria has a sophisticated tax system combined with comprehensive social protection. This country of 9 million inhabitants at the heart of Europe offers an exceptional quality of life with high-level public services, funded by progressive taxation and moderate social contributions.
Austrian Einkommensteuer: 7 Brackets in 2026
Austria uses a progressive bracket system. Only the portion of income within each bracket is taxed at the corresponding rate:
High exemption threshold: the first EUR 12,816 is completely tax-free.
Austrian Social Contributions (~18%)
Social contributions are shared between employee and employer:
| Contribution | Employee | Employer | Description |
|---|---|---|---|
| Pensionsversicherung | 10.25% | 12.55% | Pension insurance |
| Krankenversicherung | 3.87% | 3.78% | Health insurance |
| Arbeitslosenversicherung | 3.00% | 3.00% | Unemployment insurance |
| Arbeiterkammer (AK) | 0.50% | - | Chamber of Labour |
| Wohnbauforderung (WBF) | 0.50% | 0.50% | Housing subsidy |
| Total | ~18.12% | ~21.23% | - |
2026 contribution ceiling: EUR 6,060/month (EUR 72,720/year)
13th and 14th Month Pay: Advantageous Taxation
Sonderzahlungen - A Major Tax Advantage
In Austria, employees mandatorily receive 14 salaries per year:
- 13th month (Urlaubsgeld): Holiday bonus, typically paid in June
- 14th month (Weihnachtsgeld): Christmas bonus, paid in November/December
- Special taxation: These bonuses are taxed at a flat rate of 6% (instead of progressive rates)
- Exemption: The first EUR 620 of each bonus is completely tax-free
This advantage can represent savings of EUR 2,000-5,000/year for an average salary.
Familienbonus Plus: EUR 1,500/child
Family Tax Credit
- Amount: EUR 166.68/month per child (EUR 2,000/year)
- Children 0-18 years: Full amount as long as family allowances received
- Children 18-24 years: EUR 58.34/month if child in education
- Can be shared: Between both parents (50/50)
- Cumulative: With other tax benefits
Familienbonus Plus directly reduces tax owed (not just taxable income).
Pendlerpauschale: Commuter Allowance
Home-Work Travel Deduction
Austria offers a generous deduction for commuters:
Kleine Pendlerpauschale
If public transport available
20-60 km: EUR 696/year
> 60 km: EUR 1,356/year
Grosse Pendlerpauschale
If car necessary
2-20 km: EUR 372/year
> 60 km: EUR 3,672/year
+ Pendlereuro: EUR 2 per km one-way distance (additional tax credit)
Other Important Tax Deductions
- Werbungskosten: Work-related expenses (EUR 132 flat rate or actual costs)
- Sonderausgaben: Donations (max 10% of income), insurance, training
- Kinderfreibetrag: EUR 440/child if Familienbonus not used
- Alleinverdienerabsetzbetrag: EUR 494 if sole household earner + EUR 175/child
- Alleinerzieherabsetzbetrag: EUR 494 for single parents + EUR 175/child
- Kinderbetreuungskosten: Childcare costs deductible (up to EUR 2,300/child/year)
Example Calculation: EUR 60,000 Salary
Single employee, no children, commute < 20 km
Effective total rate: ~35.2% | With 2 children: ~EUR 42,876 net (Familienbonus)
Austria vs UK Tax Comparison
| Criteria | UK | Austria |
|---|---|---|
| EUR 60,000 gross salary | ~EUR 42,500 net | ~EUR 38,900 net |
| Maximum marginal rate | 45% | 55% |
| Social contributions | 12% NIC | ~18% |
| 13th/14th month | Not standard | Mandatory (6% tax) |
| Child tax credit | Child Benefit | EUR 2,000/child direct |
| Commuter allowance | Limited | Generous Pendlerpauschale |
| Cost of living | High (London) | Moderate (Vienna affordable) |
| Wealth tax | None | None |
Austrian Tax Specifics to Know
No Wealth Tax
Austria has no wealth tax or inheritance tax for direct descendants.
Benefits in Kind
Company car: 2% of value/month added to income (1.5% if electric).
Klimabonus
Annual eco bonus paid to all residents (~EUR 200).
Severance Pay (Abfertigung)
1.53% of salary paid into a severance fund.
Conclusion: Austria offers an interesting balance between taxation and public services. The 13th/14th month pay at reduced rates, the generous Familienbonus Plus, and the absence of wealth tax partially compensate for the high marginal rates. The system is particularly advantageous for families with children.
Recent Tax Reforms: Eco-Social Tax Reform and 2025-2026 Updates
Austria has been progressively implementing its landmark Eco-Social Tax Reform (Oekosoziale Steuerreform), which introduced a multi-year package of changes designed to reduce the tax burden on labour while encouraging environmentally sustainable behaviour. A key element is the CO2 pricing mechanism introduced in 2022, which levies a charge on carbon emissions from fossil fuels. This price has been gradually increasing and reached EUR 55 per tonne of CO2 by 2025, with further adjustments planned. To offset the impact on households, the government distributes the Klimabonus, an annual lump-sum payment ranging from approximately EUR 145 to EUR 290 depending on your location (rural areas with less public transport receive more). On the income tax side, the reform has reduced the second tax bracket rate from 35% to 30% for incomes between EUR 12,817 and EUR 20,818, and the third bracket from 42% to 40% for incomes up to EUR 34,513. The Familienbonus Plus was increased to EUR 2,000 per child per year, making it one of the most generous child tax credits in Europe. For employers, the Dienstgeberbeitrag (employer contribution) rate was reduced, lowering the overall labour cost. These combined changes mean that the average Austrian worker saw a net tax reduction of approximately EUR 800-1,500 per year depending on their income level and family situation.
Guide for Expats: Relocating to Austria
Foreign professionals considering a move to Austria should understand the residency-based taxation system: individuals who establish their Wohnsitz (domicile) or gewoehnlicher Aufenthalt (habitual abode) in Austria become liable to tax on their worldwide income. The first step upon arrival is registering at the local Meldeamt (registration office) and obtaining a tax identification number from the Finanzamt (tax office). Austria maintains an extensive network of double taxation treaties (Doppelbesteuerungsabkommen) covering over 90 countries, which helps prevent the same income from being taxed in both Austria and your home country. A particularly attractive feature for incoming executives and specialists is the Zuzugsfreibetrag, a relocation allowance that can be claimed as a deduction during the first years of employment in Austria. The Austrian Arbeitnehmerveranlagung (annual tax assessment) is not mandatory for employees with a single employer, but it is strongly recommended as it often results in a refund. Filing can be done online through FinanzOnline, Austria's digital tax portal, and you have up to five years to submit a voluntary assessment for any given tax year. Expats should also be aware that Austria has no inheritance tax (Erbschaftssteuer) and no gift tax (Schenkungssteuer), although a notification obligation exists for transfers above EUR 50,000 between family members.
Unique Austrian Deductions and Tax-Saving Opportunities
Austria offers several distinctive tax deductions that are not commonly found in other European countries. The Pendlerpauschale (commuter allowance) is available to employees who live more than 20 km from their workplace or have no reasonable access to public transport, with amounts ranging from EUR 696 to EUR 3,672 per year depending on distance and transport availability. On top of this, the Pendlereuro provides an additional annual tax credit of EUR 2 per kilometre of the commuting distance. Sonderausgaben (special expenses) include deductible items such as church tax contributions (up to EUR 400/year), voluntary personal insurance premiums, and certain housing construction or renovation costs. Werbungskosten (income-related expenses) beyond the automatic EUR 132 lump-sum deduction can be claimed for items like professional development courses, work equipment, double household maintenance, and home office costs. Austria also allows employees to claim a home office flat rate of up to EUR 3 per home office day, for a maximum of 100 days per year (EUR 300 total). Taxpayers making charitable donations to approved organizations can deduct up to 10% of their annual income. Perhaps most uniquely, Austria's system of 13th and 14th month salary payments (Sonderzahlungen) is taxed at a highly favourable flat rate of only 6% after a small deduction, which effectively lowers the annual average tax rate considerably compared to the standard bracket rates applied to regular monthly wages.
Austria sits at the crossroads of Central Europe with a tax system close to the Germanic model. Compare with its neighbouring countries to evaluate fiscal opportunities.