Income Tax in Austria (2026)

What Are the Austrian Income Tax Brackets and Rates?

Bands for the 2026 tax year (§ 33 EStG). Source: BMF and WKO, as of September 2026.

Austrian income tax is calculated progressively. You do not pay the top rate on your entire income. Only the portion that falls within each band is taxed at that band's rate. The first €13,539 of taxable income is free of tax in 2026, up from €13,308 in 2025.

Every band moved on 1 January 2026. The AbgÄG 2025 raised the thresholds and the tax credits by 1.7333%, which is two thirds of the measured inflation rate. The remaining third, which the government normally hands back as well, is suspended for the budget consolidation running 2025 to 2028. The 55% top rate is excluded from indexation and stays pinned at €1,000,000.

For example, on a taxable income of €50,000, you pay 0% on the first €13,539, 20% on the next €8,453, 30% on the next €14,466, and 40% on the remaining €13,542. Your total bill is about €11,447, an effective rate of roughly 22.9% before any tax credits are applied. Credits such as the Verkehrsabsetzbetrag come off that figure, not off your income.

How Is the 13th and 14th Month Salary Taxed in Austria?

The 13th and 14th monthly salaries (Urlaubsgeld and Weihnachtsgeld) are taxed at a flat 6% under § 67 EStG, not at your marginal rate. The first €620 a year of these payments is free of tax entirely. The 6% rate applies up to the Jahressechstel, one sixth of your regular annual pay; anything above that is taxed at the normal band rates. Two extra monthly salaries fit inside that sixth, which is why a standard Austrian contract pays 14 salaries rather than 12.

Social insurance is treated separately. The full employee share of 18.07% (18.12% in Vienna, where the housing levy is higher) is deducted from the 13th and 14th salary as well, but no unemployment-insurance contribution is charged on them up to the ceiling (§ 49 ASVG). Special payments have their own contribution ceiling of €13,860 a year in 2026, against €6,930 a month for regular pay. This is one reason why the cost of living in Austria can feel more manageable than the headline tax rates suggest.

The contribution ceiling moves again in 2027, to €7,410 a month, so higher earners will pay social insurance on a larger slice of their salary. The Geringfügigkeitsgrenze, the marginal-earnings threshold below which no employee contributions are due, stays frozen at €551.10 a month in both 2026 and 2027.

What Deductions and Allowances Can You Claim in Austria?

Austria splits the reliefs into three groups: Werbungskosten and Sonderausgaben reduce your taxable income, while an Absetzbetrag comes straight off the tax due and is therefore worth far more per euro. The figures below are the 2026 values, after the 1.7333% uplift the AbgÄG 2025 applied to every indexed credit.

• Verkehrsabsetzbetrag (commuter tax credit): €496 a year in 2026, up from €487 in 2025, applied automatically to every employee. The increased version is €804 and phases out as income rises.
• Pendlerpauschale and Pendlereuro (commuter allowances): the Pendlereuro tripled to €6 per kilometre of one-way distance from the 2026 tax year, up from €2. It was raised to offset the abolition of the Klimabonus. The Pendlerpauschale itself is apportioned by month, so a part-year job still earns part of it.
• Sonderausgaben (special expenses): church contribution up to €600 a year, donations to BMF-listed charities up to 10% of the previous year's income, tax-advice fees at 100% with no ceiling, and premiums on insurance policies signed before 1 January 2016 at 25% of the premium, capped at €2,920. Newer policies are not deductible.
• Werbungskosten (work-related expenses): a flat €132 a year is granted without any receipt. Above that, claim the real cost of work tools, professional development, and job-related relocation. Home office is €3 per day for up to 100 days, so €300 a year, plus up to €300 a year for ergonomic furniture.
• Alleinverdiener- and Alleinerzieherabsetzbetrag (sole earner and single parent credits): €612 for one child in 2026, €828 for two, plus €273 for each further child. Your partner may not earn more than €7,411 a year, and the situation must have lasted more than 6 months in the calendar year. Arriving in Austria after 30 June therefore pushes the credit into the following year.
• Familienbonus Plus: €2,000.16 per year for each child under 18 (€166.67 a month) and €700.08 for an adult child still drawing Familienbeihilfe. It is not indexed: family benefits are frozen through 2027, and the double budget extends that freeze into 2028.
• Kinderbetreuungskosten (childcare): up to €2,300 per child a year until the child turns 10. The Unterhaltsabsetzbetrag for maintenance paid for a child outside your household is €38 a month for the first child in 2026, €56 for the second and €75 for each further one.

What Is the Negativsteuer Refund and Who Gets It?

If you earn too little to pay income tax, Austria pays you part of your social security contributions back instead. The refund is called the Negativsteuer or SV-Rückerstattung, it runs under § 33 EStG, and in 2026 it is worth up to €496 a year, up to €750 if you also qualify for the Pendlerpauschale, and up to €804 at the very top of the scale. Pensioners have their own ceiling of €723. Nothing is paid out automatically: you have to file the Arbeitnehmerveranlagung.

This is the single most commonly missed refund among new arrivals, because the people entitled to it are exactly the people who assume a tax return is pointless. Students on a part-time contract, anyone who worked only part of the year, and anyone whose income dropped mid-year are the typical cases. Payroll withholds tax as if your monthly salary ran for the full 12 months, so a job that started in September is almost always over-taxed.

The window is 5 years wide under § 41 Abs. 1 EStG, counted from the end of the tax year. In 2026 that means the years 2021 to 2026 are still claimable, and the 2021 return closes on 31 December 2026. You can file all open years in one sitting through FinanzOnline, or have the AK Steuerservice do it for free, since your AK membership is already deducted from your payslip at 0.5% of gross pay.

How Do You File Your Tax Return in Austria (Arbeitnehmerveranlagung)?

If you are an employee in Austria, your employer handles monthly tax withholding (separate from VAT, which applies to goods and services). However, you may be entitled to a tax refund by filing an Arbeitnehmerveranlagung (employee tax assessment). This is voluntary for most employees, but highly recommended. Many residents receive refunds of several hundred euros.

You can file your tax return online through FinanzOnline, the Austrian tax authority's online portal. You will need a FinanzOnline account, which can be activated with your tax number, a code from your local Finanzamt, or through ID Austria (the Austrian digital identity system). You will also need an Austrian bank account to receive any refund.

A voluntary return stays open for 5 years (§ 41 Abs. 1 EStG), so in 2026 you can still file for 2021 and the deadline for that year is 31 December 2026. Filing is compulsory in several situations: two or more simultaneous employers, more than €730 a year of income that was not taxed at source, tax-free transfers such as unemployment or sickness benefit above €730 alongside taxed pay, a freelance visa with side income, or a letter from the Finanzamt asking you to file.

For a compulsory return the deadlines are 30 April on paper and 30 June through FinanzOnline, both in the year after the tax year. A Steuerberater filing under the Quotenregelung has until 31 March of the year after that. Miss a compulsory deadline and the BMF can add a late filing surcharge of up to 10% of the tax (§ 135 BAO). Refunds land on the IBAN stored in FinanzOnline, and a foreign SEPA account works, so leaving Austria does not cost you the refund. For more details, see the Federal Ministry of Finance (BMF) website.

What Does It Cost to File an Austrian Tax Return?

A simple employee return costs nothing if you file it yourself in FinanzOnline or let the AK Steuerservice do it. You do not need ID Austria: the portal also issues a user ID and PIN by letter, and an EU eID from another member state works too. The real barrier is language, since the portal and the L1 form exist only in German.

The most common newcomer mistake is buying German tax software. WISO, Smartsteuer and Lohnsteuer kompakt rank well on German searches but only calculate German returns. The second is confusing a private app with the authority: finanz.at sells a filing app, but it is not the BMF. Pay a Steuerberater when foreign income, a foreign broker, crypto or self-employment is involved, and settle the fee in writing before work starts.

Simple returns often clear the automatic assessment within two weeks. If the office has not decided after 6 months, you can file a complaint for inaction (§ 284 BAO, Säumnisbeschwerde). Refunds go to the IBAN stored in your profile, and a foreign SEPA account works if you enter it as foreign bank details.

How Is Investment Income Taxed in Austria?

Austria taxes capital income at flat special rates, outside the income tax bands: 25% on bank interest and 27.5% on almost everything else under § 27a Abs. 1 EStG. An Austrian bank or broker withholds it for you, which Austrians call steuereinfach, and the tax is then settled. A foreign account withholds nothing, so you declare the income on the E1kv annex by 30 June of the following year.

Losses are where most investors leave money behind. Under § 27 Abs. 8 EStG a securities loss offsets dividends and gains, but never bank interest, never salary, and never next year: there is no loss carryforward. Two accounts at two banks do not talk to each other, so a loss at one and a gain at the other only net out if you file an E1kv for that year.

Accumulating ETFs are taxed every year even though they pay nothing out. The fund reports a deemed distribution (ausschüttungsgleicher Ertrag) to the OeKB, and an Austrian bank debits 27.5% on it from your settlement account, so keep some cash there. A fund that does not report at all is taxed on an estimate under § 186 Abs. 2 Z 3 InvFG: 90% of the year's price rise, and at least 10% of the year-end price, even in a year it lost money. Check the ISIN on my.oekb.at before you buy.

When Does the Regelbesteuerungsoption Pay Off?

The Regelbesteuerungsoption under § 27a Abs. 5 EStG lets you have capital income taxed at your normal band rate instead of 27.5%, and the withheld KESt is credited back. It pays when your capital income lands in the 0% or 20% band, so up to roughly €22,000 of total taxable income in 2026. Students and small pensioners with a depot are the typical winners.

Two rules limit it. The option covers all your capital income for the year, so you cannot pick the profitable items. And the tax office runs the comparison itself: you apply in the return, and it only applies the bands if they come out lower. Above about €22,000 each extra euro is taxed at 30%, more than the 27.5% KESt, which is why the €30,000 salary example ends up costing money.

What Happens to Your Taxes When You Leave Austria?

Leaving Austria triggers exit taxation on your investments under § 27 Abs. 6 EStG: shares, funds, ETFs and crypto are treated as if sold, at 27.5% on the unrealised gain. Moving to an EU or EEA country, you can apply to have the tax assessed but not collected until you actually sell. Moving to Switzerland, the UK or the US, it falls due straight away.

The deferral now comes with paperwork. Since 1 July 2026 the law requires an annual proof that the deferred positions are still held, above a €100,000 threshold. Tax advisers report a one-off notice for older deferrals due by 31 December 2026; check with the tax office if you left before July 2026. The rule also works in the other direction: bringing a foreign securities account into Austria after 30 June 2026 is tax-neutral under the AbgÄG 2025, if you report it within one month.

File a final Arbeitnehmerveranlagung for the year you leave. Payroll withheld tax as if you would earn all year, so a mid-year exit usually means a refund, paid to any SEPA account. Your pension contributions are not refunded: the insurance years stay on record and turn into a pension later, added up with other EU periods under Regulation (EC) 883/2004.

What Are the Best Tax Tools and Advisors in Austria?

What Law Sets the Rates and What Are You Entitled To?

Frequently Asked Questions