Tax Wedge (Steuerkeil)
Definition
The tax wedge measures the share of total labor cost (gross + all employer add-ons: DG-SV, municipal tax KommSt, DB FLAF contribution, DZ surcharge, BV/MVK severance fund) that does not reach the employee as net pay. The OECD publishes it annually in its Taxing Wages report as a cross-country comparison metric. Formula: (total cost − net) ÷ total cost. Austria has sat consistently in the top third, a single earner without children typically lands around ~47 %, which placed Austria third behind Belgium and Germany in 2024.
Example: Gross € 6.980 / month (Vienna, 2026)
| Total cost / year | € 126.608 |
| − Net / year | € 61.152 |
| = Wedge (€) | € 65.455 |
| = Wedge (%) | 51,7 % |
Above the OECD average (~35 %) and above the typical AT single-earner figure (~47 %), driven by the high gross: the §33 tariff progression pushes the ratio up once income crosses the 40 % bracket threshold (€ 36.458).