We provide full support for tax refunds from abroad - from preparing the return and including allowances and costs to handling contact with the tax office.
In Austria, employees usually receive 14 payments per year: 12 standard monthly salaries plus two additional payments, Urlaubsgeld (holiday pay, usually in June) and Weihnachtsgeld (Christmas pay, in November/December). These additional payments are taxed preferentially at 6% instead of the standard progressive tax scale.
From gross salary, the employer first deducts social security contributions (Sozialversicherung), which total 18.12% on the employee side. Income tax (Lohnsteuer) is then calculated on the amount after contributions, using a progressive 7-bracket scale from 0% to 55%.
Every employee automatically receives the Verkehrsabsetzbetrag, a commuting tax credit of 496 EUR per year in 2026. Additional reliefs may also apply: Pendlerpauschale (commuter allowance), Alleinverdienerabsetzbetrag (single-earner tax credit) and Familienbonus Plus (child tax credit).
Tax brackets in Austria 2025/2026
Austria uses a progressive tax system with seven brackets. Income up to around 13 500 EUR per year is fully exempt from income tax. The highest rate of 55% applies only to income above 1 000 000 EUR.
Bracket
Annual income (2026)
Rate
1
up to 13 539 EUR
0%
2
13 539 - 21 992 EUR
20%
3
21 992 - 36 458 EUR
30%
4
36 458 - 70 365 EUR
40%
5
70 365 - 104 859 EUR
48%
6
104 859 - 1 000 000 EUR
50%
7
above 1 000 000 EUR
55%
In 2025, the brackets were slightly lower, for example the tax-free amount was 13 308 EUR instead of 13 539 EUR. The brackets are indexed annually for inflation.
13th and 14th salary in Austria (Sonderzahlungen)
Sonderzahlungen, or special payments, are one of the major advantages of working in Austria. Employees receive two additional salaries per year: Urlaubsgeld before holidays, usually in June, and Weihnachtsgeld before Christmas.
These additional payments are taxed preferentially. The first 620 EUR per year is tax-free, and the next amounts are taxed at 6% (up to 25 000 EUR), 27% (25 000-50 000 EUR) and 35.75% (50 000-83 333 EUR). SV contributions are charged as usual.
Because Sonderzahlungen receive preferential tax treatment, the effective annual tax rate in Austria is lower than the standard tax brackets alone would suggest.
Social security contributions in Austria 2025/2026
Every employee in Austria pays social security contributions totalling 18.12% of gross salary, up to the contribution ceiling. The employer pays an additional 21.23%. The current employee rates are shown below.
Insurance
Employee rate
Krankenversicherung (health insurance)
3,87%
Pensionsversicherung (pension insurance)
10,25%
Arbeitslosenversicherung (unemployment insurance)
3,00%
Arbeiterkammerumlage (Chamber of Labour contribution)
0,50%
Wohnbauforderungsbeitrag (housing contribution)
0,50%
Total contributions
18,12%
The contribution ceiling (Hochstbeitragsgrundlage) is 6 930 EUR per month in 2026. Contributions are not charged on amounts above this ceiling.
Frequently asked questions
In 2026, income up to 13 539 EUR per year, around 1 128 EUR per month, is fully exempt from income tax. In 2025, the threshold was 13 308 EUR. In addition, every employee automatically receives the Verkehrsabsetzbetrag (496 EUR per year in 2026, 487 EUR in 2025), which effectively reduces tax.
Sonderzahlungen are two additional payments per year: Urlaubsgeld before holidays, around June, and Weihnachtsgeld before Christmas, around November. Together, this gives 14 payments per year. The additional salaries are taxed preferentially at 6% instead of the normal progressive scale, up to 25 000 EUR after deducting SV and the 620 EUR allowance.
The employee pays a total of 18.12% of gross salary in social security contributions: pension insurance 10.25%, health insurance 3.87%, unemployment insurance 3.00%, Chamber of Labour contribution 0.50% and housing contribution 0.50%. Contributions are charged up to the ceiling of 6 930 EUR per month (2026). The employer pays an additional 21.23%.
Pendlerpauschale is an Austrian commuter allowance for employees who commute to work. It applies when the distance is over 20 km (small allowance) or over 2 km without a reasonable public transport connection (large allowance). The annual amount depends on the distance: 20-40 km (696 EUR), 40-60 km (1 356 EUR), above 60 km (2 016 EUR).
Possible Austrian tax refund
You may be able to recover part of the tax you paid
Do you work in Austria? We handle tax refunds for up to 5 years back. Check with a free estimate how much you can recover.
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