Austria Income Tax Brackets 2026: Rates and Examples
The seven tax brackets at a glance
Austria uses a progressive income tax with seven bands. Each band applies only to the slice of taxable income that falls within it, not to the total. The band thresholds are adjusted each year to offset inflation, so real purchasing power is not eroded by bracket creep. Taxable income is gross pay minus social security contributions and a standard employment deduction of €132 per year.
| Taxable annual income | Marginal rate |
|---|---|
| Up to €13,539 | 0% |
| €13,539 to €21,992 | 20% |
| €21,992 to €36,458 | 30% |
| €36,458 to €70,365 | 40% |
| €70,365 to €104,859 | 48% |
| €104,859 to €1,000,000 | 50% |
| Above €1,000,000 | 55% |
In addition to the bracket calculation, every employee receives a commuter tax credit (Verkehrsabsetzbetrag) of €496 deducted directly from the tax due, before any other credits. This means the practical zero-tax threshold is higher than €13,539 in gross terms.
Worked example: €42,000 gross annual
Austrian salaries are paid 14 times a year. A gross monthly salary of €3,000 equals €42,000 annual gross (12 regular months plus a holiday and Christmas payment). The two extra payments are taxed at a flat 6% after a €620 allowance, not at the regular progressive rate.
For the 12 regular monthly payments, social security of 18.07% is deducted first (18.32% in Vienna). The remaining base, annualised over 12 months, is then run through the progressive brackets above. The Verkehrsabsetzbetrag of €496 is subtracted from the resulting figure. Across all 14 payments for the year, income tax totals €3,667.18 and social security totals €7,529.40, giving a net annual income of €30,803.42. The regular monthly take-home is €2,174.08.
How brackets are adjusted each year
Since 2016 Austria has applied an annual inflation correction (Inflationsabgeltung) to the bracket thresholds. For 2026 the thresholds moved up by roughly two-thirds of the measured inflation rate compared with 2025. The tax rates themselves remained unchanged at 0, 20, 30, 40, 48, 50, and 55 percent. This mechanism prevents bracket creep, where an inflation-only pay rise would otherwise push a worker into a higher band without any real increase in purchasing power.
Social security and income tax together
Social security contributions are not a deduction from income tax; they reduce the taxable base used for the bracket calculation. At €3,000 gross monthly the social security deduction lowers taxable income by roughly €542 per month. That means the effective combined deduction rate (social security plus income tax relative to gross pay) is lower than adding the headline rates. For a full breakdown see the social security guide.
Run the numbers yourself
The Austria salary calculator shows all 14 payments separately, including the special payment tax break, Vienna's higher levy, and the Verkehrsabsetzbetrag. Results match the official Austrian Finance Ministry calculator to the cent.
Frequently asked questions
What is the income tax-free threshold in Austria in 2026?
Taxable income up to €13,539 is taxed at 0%. Taxable income is gross pay minus social security contributions and a standard employment deduction of €132 per year.
What is the top income tax rate in Austria?
The top rate is 55% on taxable income above €1,000,000 per year. Most high earners face a top marginal rate of 50% (income between €104,859 and €1,000,000) or 48% (between €70,365 and €104,859).
Do the 13th and 14th salary payments also get taxed at the progressive rate?
No. Those special payments are taxed at a flat 6% after a €620 allowance, which is much lower than the regular progressive rate for most employees. This is one reason Austrian net pay is higher than a simple headline-rate comparison with Germany would suggest.
2026 values (band thresholds indexed). Examples computed with our tested engine. Last updated 2026-11-04.