Income Tax Brackets Austria 2026: Tax Rates & Calculator
Austrian income tax brackets 2026: Tax rates from 0% to 55%, thresholds, examples. Understand Lohnsteuer and calculate your net salary.
Income Tax in Austria 2026 (Lohnsteuer)
Austria uses a progressive income tax system called "Lohnsteuer" for employees. This means higher earnings are taxed at higher rates. Understanding these brackets helps you estimate your net salary and plan your finances.
Austrian Tax System 2026
- Tax-free threshold: €12,816/year
- Number of brackets: 7 (0% to 55%)
- Top rate: 55% (above €1,000,000)
- Standard rate for most: 20-42%
2026 Income Tax Brackets (Lohnsteuertabelle)
| Annual Income (€) | Tax Rate | Max Tax in Bracket |
|---|---|---|
| €0 - €12,816 | 0% | €0 |
| €12,817 - €20,818 | 20% | €1,600 |
| €20,819 - €34,513 | 30% | €4,108 |
| €34,514 - €66,612 | 40% | €12,840 |
| €66,613 - €99,266 | 48% | €15,674 |
| €99,267 - €1,000,000 | 50% | €450,367 |
| Above €1,000,000 | 55% | - |
How Austrian Income Tax Works
Austria uses a marginal tax system. This means you don't pay your highest rate on all income - only on the portion that falls into each bracket.
Example: €50,000 Gross Annual Salary
Tax Calculation
| Income Portion | Rate | Tax | |----------------|------|-----| | €0 - €12,816 | 0% | €0 | | €12,817 - €20,818 | 20% | €1,600 | | €20,819 - €34,513 | 30% | €4,108 | | €34,514 - €50,000 | 40% | €6,195 | | Total Tax | | €11,903 |
Effective tax rate: 23.8%
Salary Examples: Gross to Net
| Gross/Month | Gross/Year | Approx. Net/Month | Effective Rate |
|---|---|---|---|
| €2,000 | €28,000 | ~€1,570 | ~21% |
| €2,500 | €35,000 | ~€1,890 | ~24% |
| €3,000 | €42,000 | ~€2,180 | ~27% |
| €4,000 | €56,000 | ~€2,680 | ~33% |
| €5,000 | €70,000 | ~€3,140 | ~37% |
| €6,000 | €84,000 | ~€3,540 | ~41% |
What's Deducted from Your Gross Salary?
Your payslip shows multiple deductions:
| Deduction | Rate | What It Covers |
|---|---|---|
| Pension Insurance | 10.25% | State pension |
| Health Insurance | 3.87% | ÖGK public healthcare |
| Unemployment Insurance | 3.00% | AMS unemployment benefits |
| Chamber Contribution (AK) | 0.50% | Worker's chamber |
| Housing Support Contribution | 0.50% | Wohnbauförderung |
| Total Social Security | ~18.12% | Deducted before tax |
13th and 14th Salary (Sonderzahlungen)
A unique feature of Austrian employment:
Holiday and Christmas Bonus
- 13th salary (Urlaubsgeld): Paid in June/July
- 14th salary (Weihnachtsgeld): Paid in November/December
- Amount: Typically one month's gross salary each
- Tax rate: Only 6% (much lower than normal!)
This is why gross annual salaries are calculated as 14 monthly payments, not 12.
Tax Relief Options (Steuerabsetzbeträge)
Several deductions can reduce your tax burden:
| Relief (Absetzbeträge) | Amount/Year | Who Qualifies |
|---|---|---|
| Verkehrsabsetzbetrag | €463 | All employees (automatic) |
| Pendlerpauschale | Up to €3,672 | Commuters (20+ km or no public transit) |
| Familienbonus Plus | €2,000/child | Parents (per child up to 18) |
| Alleinverdiener-/Alleinerzieherabsetzbetrag | €520-669 | Single earners/single parents |
| Werbungskosten | €132 (or actual) | Work-related expenses |
Tax Return (Arbeitnehmerveranlagung)
As an employee, you can file a tax return in Austria to potentially get money back:
When to File a Tax Return
- Commuting expenses (Pendlerpauschale) not claimed at work
- Work-from-home costs (Homeoffice-Pauschale)
- Professional development courses, books
- Child-related benefits not fully claimed
- Medical expenses above threshold
You can file for up to 5 years retroactively via FinanzOnline (finon.at).
Frequently Asked Questions
What's the tax-free threshold in Austria?
The first €12,816 per year is tax-free. This equals about €915/month. If you earn below this amount, you pay no income tax (though social security contributions still apply).
Why is my net salary higher in June and November?
These months include the 13th and 14th salary bonuses (Urlaubsgeld and Weihnachtsgeld). These are taxed at only 6%, so you receive more net income in these months.
Is Austria's income tax high compared to other countries?
Austria has relatively high income tax rates, similar to Germany and Scandinavia. However, this funds excellent public services including healthcare, education, and social security. The 13th/14th salary tax treatment is also very favorable.
Do I need to file a tax return as an employee?
It's optional but often beneficial. Your employer handles basic tax withholding, but you may be entitled to additional deductions (commuting, work expenses, etc.) that result in a refund. It's free and easy via FinanzOnline.
Conclusion: Austrian Income Tax 2026
Austria's progressive tax system means most employees pay between 20-42% on their income. The tax-free threshold of €12,816 and special treatment of the 13th/14th salary (only 6% tax) make the system more favorable than the top rates suggest. For all changes affecting Austria in 2026, see our comprehensive overview.
Key takeaways:
- Effective tax rate for average earners: 25-35%
- Social security adds ~18% in deductions
- File a tax return to claim additional refunds
- 13th/14th salary is taxed very favorably at 6%
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Sources: BMF (Bundesministerium für Finanzen), Austrian tax law. Updated: February 2026.
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Information as of: November 2024. All information without warranty. Changes and errors excepted.
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