Tax
Income tax (§ 33 EStG) is the central tax on earned income in Austria. Seven brackets ranging from 0.00 % to 55.00 % are adjusted annually since 2023 by two-thirds of the inflation rate (Inflationsanpassungsverordnung) to dampen bracket creep. Special payments (13th/14th salary) get the preferential treatment under § 67 EStG.
Key figures 2026
What changed 2026
Terms in this topic
- Einkommensteuertarif (§ 33 EStG)
The progressive tariff formula, seven brackets from 0.00 % to 55.00 %, inflation-adjusted annually.
- Flat-rate expenses (Basispauschalierung)
Expenses as a flat rate: 15.00 % of turnover (max €63,000), 6.00 % for advisory work. Prior-year turnover up to €420,000.
- Investment allowance (Investitionsfreibetrag)
Extra deduction for acquisitions: 20.00 %, ecological 22.00 %, on up to €1,000,000 of cost a year.
- Negativsteuer (SI refund)
Credit for low earners, 55.00 % of SI back via the tax return, not on the payslip.
- Profit allowance (Gewinnfreibetrag)
Reduces taxable profit: basic allowance 15.00 % up to €33,000 (max €4,950), investment-based above that.
- Sachbezug (non-cash benefit)
§ 15 EStG non-cash benefit, lifts the tax + SI base, can pull cash net down at very high values.
- Small-business flat rate (§ 17 Abs 3a)
Income-tax flat rate for small businesses: 45.00 % of income, 20.00 % for services. Turnover up to €55,000.
- Small-business VAT scheme
Below €55,000 gross annual turnover: no VAT charged, no input-tax deduction. Relevant for Werkvertrag and sole traders.
- Sonderbezüge (13th & 14th salary)
§ 67 EStG, lower income tax, yearly SI cap, what makes holiday and Christmas pay special.
- Steuerkeil (tax wedge)
The total wedge between employer cost and employee net, a measure of payroll-cost burden.
Related terms
- SI contribution rates (§ 51 ASVG)SV
SI contributions are deducted BEFORE tax, the tax base is always gross minus SI minus deductible expenses.
- Familienbonus PlusBeihilfe
The Familienbonus Plus is subtracted directly from the tariff tax (€1-for-€1), not from the base.
- Lohnkosten (employer total)DG
On the employer side another ~29.70 % in payroll levies sits on top, income tax is only one piece of the total wage burden.