Taxes in Austria in 2026 for expats: salary and income tax

Tax rates in Austria in 2026: at a glance

Austria takes more from high earners than almost any of its neighbours: the 55% top income tax rate on income above EUR 1 million a year has been extended until 2029. Yet the first EUR 13,539 of annual income is tax-free, the 13th and 14th salaries are taxed at a preferential 6%, and there is no inheritance, gift or wealth tax at all.

Taxes are run by the Federal Ministry of Finance (Bundesministerium für Finanzen, BMF) through a single national tax office (Finanzamt Österreich). All amounts on this page are in euros.

For people moving from Russia, the biggest problem is not the rates. Since 7 December 2023 the Austria-Russia double tax treaty has effectively stopped working: Russia suspended it unilaterally and Austria responded in kind.

What changed in 2025 and 2026

Compare taxes in 146 countries: relocation taxes 2026

Who becomes an Austrian tax resident

In Austria you do not become tax resident after 183 days but from day one if you have a home in the country. Section 1 of the Income Tax Act (Einkommensteuergesetz 1988, EStG) makes resident anyone with a domicile (Wohnsitz) or habitual abode (gewöhnlicher Aufenthalt) in Austria. Residents pay tax on worldwide income, non-residents only on Austrian income.

The trap is renting a flat in Vienna before the family moves: the mere possibility of living there already creates a domicile. Address registration (Meldezettel) does not by itself decide tax residence, but the tax office treats it as a strong indicator.

If residence arises in Austria and another country at the same time, the double tax treaty settles it: usually the country with the permanent home, family and centre of vital interests wins. With Russia this mechanism barely helps at the moment, see the section on treaties.

How the 183-day rule works in different countries and why it is not enough on its own is explained in tax residency and the 183-day rule. For the move itself see Austria residence permit by investment and Austria start-up residence permit.

Austria tax residency rules: how to become resident and count days

In Austria it is the flat, not the calendar, that makes you resident. A home you can use at any time triggers full tax liability from day one. Without a home the threshold is more than 6 months in a row, and then the status applies back to the day you arrived.

A resident pays progressive income tax of 0-55% on worldwide income, a non-resident only on Austrian income. To the tax office, a flat in Vienna rented for a year weighs more than a passport stamp: the keys matter more than the visa.

The law does not stop you from confirming the status on your own. But mistakes cost more: a flat kept after leaving preserves residence, and Austria taxes income your new country has already taxed. Murblz support removes these risks: we check the home and the days, prepare the exit from residence and obtain the tax residence certificate. We guarantee professional work and a transparent process, and in most cases a result on the first filing.

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What is the income tax rate in Austria in 2026

Austrian income tax is progressive with seven brackets, and from about EUR 36,500 of annual income every additional euro is taxed at 40%. By comparison, neighbouring Czechia tops out at 23%, while Germany charges 45% plus a solidarity surcharge on high incomes.

Brackets are raised every year in line with inflation so that pay rises are not eaten up by bracket creep. For 2026 they were raised by only 1.7333%, two thirds of the 2.6% inflation rate, so the tax burden went up slightly.

Each rate applies only to the slice of income inside its bracket. Income of EUR 50,000 is not taxed at 40% in full: only the part above EUR 36,458 is.

What reduces the tax

Austria's main reliefs are not deducted from income but directly from the tax itself (Absetzbeträge). The 2026 amounts are published by the government business portal USP.

The family bonus is the most valuable relief: with two children under 18 the tax falls by EUR 4,000 a year. It cannot exceed the tax itself, so low-income families do not get it in full.

13th and 14th salaries and capital income

Almost all employees in Austria receive 14 salaries a year: a summer and a Christmas payment are provided for by sector-wide collective agreements (Kollektivvertrag) that cover nearly the whole labour market. The first EUR 620 of these payments a year is tax-free, and for ordinary salaries the rest is taxed at 6%.

Dividends, interest and gains on shares and crypto are kept out of the progressive scale and taxed at a flat 27.5% (25% on bank deposit interest). If the scale rate would be lower, you can apply to have capital income taxed under the scale instead.

From 2026, overtime supplements for the first 15 overtime hours a month are tax-free up to EUR 170; in 2024-2025 the limit was EUR 200 for 18 hours. An employer bonus of up to EUR 500 paid between July and December 2026 is also tax-free.

How much tax is taken from a salary in Austria: social security and an example

On a gross salary of EUR 4,000 a month an employee in Austria takes home about EUR 2,725, so almost a third goes to the state before any shopping. More than half of these deductions are not tax but social security: 18.07% of every salary up to a ceiling of EUR 6,930 a month.

What the employee and the employer pay

On low pay the employee's unemployment contribution is reduced: zero up to EUR 2,225 a month, 1% up to EUR 2,427 and 2% up to EUR 2,630. On the 13th and 14th salaries the employee pays 17.07% and the employer 20.48%, with a ceiling of EUR 13,860 a year for these two payments.

Example calculation: salary of EUR 4,000 a month

Example calculation for an employee in Vienna without children, 14 payments of EUR 4,000, year 2026.

1. Social security on the regular salary: 4,000 × 18.07% = EUR 722.80.
2. Annual taxable base: (4,000 - 722.80) × 12 = EUR 39,326.40, minus the EUR 132 standard deduction = EUR 39,194.40.
3. Tax under the scale: 20% of EUR 8,453 + 30% of EUR 14,466 + 40% of EUR 2,736.40 = EUR 7,124.96.
4. Minus the EUR 496 employee tax credit: EUR 6,628.96 a year, or EUR 552.41 a month.
5. Take-home pay in each regular month: 4,000 - 722.80 - 552.41 = EUR 2,724.79.
6. 13th and 14th salaries: EUR 8,000, social security 17.07% = EUR 1,365.60, tax of 6% on the amount above EUR 620 = EUR 360.86. Net EUR 3,136.77 for each.

The calculation is simplified: no church tax, commuter allowance or deductions claimed in the tax return. With one child under 18, the family bonus adds about EUR 167 a month to the net pay on a EUR 4,000 salary.

The same employee costs the employer more than the contract suggests. In Vienna the employer pays about 29.6% on top of the gross regular salary and about 29.1% on the 13th and 14th. At EUR 4,000 a month the full cost of the employee is about EUR 72,500 a year.

Corporate tax and dividend tax in Austria

Austria's corporate income tax is 23%, and profit paid out to the owner as dividends is taxed at about 44% in total. That is less than the 48-55% top income tax rates, so at high income levels a business run through a limited company (GmbH) usually beats a sole proprietorship.

The rate was cut twice: 25% until 2022, 24% in 2023 and 23% since 2024. There is one rate for all profit, whether distributed or retained.

Example calculation: a GmbH earns EUR 100,000 of profit. Corporate tax is EUR 23,000, leaving EUR 77,000. If all of it is paid out as dividends, the company withholds 27.5%, or EUR 21,175. The owner keeps EUR 55,825, a total burden of 44.2%.

By comparison, the same EUR 100,000 of profit earned by a sole trader goes into the income tax scale, where the top slice is taxed at 48%, and up to 26.83% more goes on self-employed contributions. But a GmbH has its own costs: double-entry bookkeeping, annual accounts filed with the commercial register and the minimum tax even in a loss-making year.

Since 2024 start-ups can also use the flexible company (Flexible Kapitalgesellschaft, FlexCo) with non-voting employee shares; it is taxed exactly like a GmbH.

Murblz specialists handle company set-up: company formation in Austria, business account in Austria, and other jurisdictions are compared under company formation abroad.

What is VAT in Austria and at what turnover it applies

Standard VAT in Austria is 20%, but since 1 July 2026 the country has a new, lowest rate: 4.9% on milk, butter, eggs, bread, rice, pasta, wheat flour, many vegetables and some fruit. Parliament passed the cut in May 2026; these foods were previously taxed at 10%.

The 4.9% rate only covers these foods sold as they are. A sandwich or ready meal made with them keeps the previous rate, and restaurants and catering did not get the cut.

At what turnover VAT becomes due

Since 2025 small businesses are exempt from VAT with turnover of up to EUR 55,000 a year (Kleinunternehmerregelung, the small business scheme). The threshold used to be EUR 35,000 net of VAT. Such a business does not charge VAT to its customers, but it cannot reclaim VAT on its own purchases either.

If the threshold is exceeded by no more than 10% in a year, the business can stay VAT-free until the end of that year and loses the scheme from the next one. If it is exceeded by more than 10%, VAT applies at once, starting with the transaction that broke the limit.

VAT-registered businesses file a preliminary VAT return (Umsatzsteuervoranmeldung) by the 15th day of the second month after the period. The period is a month if last year's turnover exceeded EUR 100,000, otherwise a quarter. An annual VAT return is filed on the same deadlines as the income tax return.

What sole traders, freelancers and expats pay in Austria

Austria has no special tax for sole traders, freelancers or IT: a sole proprietor's income (Einzelunternehmen) goes into the same 0-55% scale as a salary. The only relief is simplified bookkeeping, where part of the turnover is written off as expenses without receipts. Among foreigners, only seconded employees, scientists and researchers get separate breaks.

Contributions for sole traders and freelancers

Sole traders and freelancers pay into the social insurance fund for the self-employed (Sozialversicherungsanstalt der Selbständigen, SVS) on profit, not turnover.

Contributions are deducted from profit before income tax. In the first years SVS charges provisional payments on the minimum base and recalculates them on actual profit after the tax return, so the top-up for a good year can arrive as a single bill.

Simplified bookkeeping for small businesses

With turnover of up to EUR 55,000 a year, a sole trader can skip collecting receipts and deduct flat-rate expenses (Kleinunternehmerpauschalierung): 45% of turnover, capped at EUR 24,750, or 20% for service businesses, capped at EUR 11,000. SVS contributions are deducted on top of the flat rate.

Every sole trader gets a tax-free profit allowance (Gewinnfreibetrag): 15% of profit up to EUR 33,000, i.e. up to EUR 4,950 a year, with no investment required. The allowance on profit above that amount is available only if the money is invested in equipment or certain securities.

Expats, scientists and digital nomads

A freelancer living in Austria and working for foreign clients pays Austrian income tax and SVS contributions on all income, wherever the clients are. A remote employee of a foreign company also becomes tax resident, and the employer may acquire social security obligations in Austria.

Company founders have a separate route: the Austria start-up residence permit (Red-White-Red Card for start-up founders). Taxes under it are normal, there is no preferential start-up rate.

Taxes on real estate, inheritance, crypto and cars in Austria

Buying a flat in Austria immediately costs at least 4.6% on top of the price: 3.5% transfer tax and 1.1% for entry in the land register. The relief that since April 2024 exempted buyers of their own home from the fee has ended: applications were accepted until 30 June 2026.

A main residence is sold tax-free if it was lived in continuously for at least two years from purchase to sale, or for at least five of the last ten years. An investment flat is sold with 30% tax on the difference between sale and purchase price.

Since 1 July 2025 a 30% surcharge (Umwidmungszuschlag) is added to the gain on land rezoned after 2024. Example: a plot rezoned from farmland to building land with a gain of EUR 200,000 is taxed on EUR 260,000.

Rental income from a flat goes into the progressive income tax scale. Residential rent carries 10% VAT, but a landlord with turnover of up to EUR 55,000 a year is exempt.

Inheritance, gifts and foundations

Austria has had no inheritance or gift tax since August 2008. But large gifts must be reported: gifts between relatives above EUR 50,000 within a year, and between unrelated persons above EUR 15,000 within five years, are reported within three months (Schenkungsmeldung). The penalty for not reporting is up to 10% of the value. Transfers of assets to a private foundation (Privatstiftung) are taxed at 2.5%.

Shares, funds and crypto

Gains on shares, bonds, funds and crypto are taxed at 27.5%. Since 1 March 2022 crypto has been treated like securities; the rule covers coins bought after 28 February 2021. Coins bought earlier fall under the old rules and are sold tax-free after a one-year holding period. Swapping one cryptocurrency for another does not trigger tax; tax arises when selling for euros or paying for purchases.

Cars and tourist tax

When a car is first registered in Austria, a one-off tax is paid (Normverbrauchsabgabe, NoVA), with the rate depending on CO2 emissions. After that, a monthly car tax (motorbezogene Versicherungssteuer) is paid with the insurance premium, based on engine power and emissions. Since 1 April 2025 electric cars pay too, based on power and weight, under EUR 500 a year for most passenger cars. An Austrian resident may drive a car with foreign plates for only one month after bringing it in; then it must be registered.

Hotels charge a tourist tax (Ortstaxe) set by each federal state. In Vienna it rose from 3.2% to 5% of the accommodation price on 1 July 2026 and is set to rise to 8% from 1 July 2027.

Does Austria's tax treaty with Russia still apply, and what non-residents pay

The double tax treaty between Austria and Russia, signed in 2000, has not formally been terminated, but since 7 December 2023 it has barely worked. Russia suspended it by a diplomatic note of 8 August 2023, and Austria responded in kind and published the suspension in the Federal Law Gazette (Bundesgesetzblatt).

Articles 5-22 and 24 are suspended, as are parts of Article 26 on exchange of information. These are all the rules on which country taxes salaries, dividends, interest, royalties, real estate and capital gains. The article on the method for eliminating double taxation formally remains, but without an allocation of taxing rights it achieves nothing.

What this means for Russians with income in both countries

• Dividends from Austrian companies paid to a Russian tax resident are taxed at the full 27.5% rate; no part can be reclaimed under the treaty.
• An Austrian resident with income from Russia pays Austrian tax on all of it. The regulation on avoiding double taxation with non-treaty countries (BGBl II Nr. 474/2002) does not cover Russia or Belarus.
• Russian tax can only be taken into account through an individual application to the Ministry of Finance under section 48 of the Federal Fiscal Code (BAO). The decision is at the ministry's discretion.

Treaties with other countries

The Ministry of Finance's list shows more than 90 Austrian treaties. With most former Soviet countries they operate normally.

What non-residents pay

A non-resident pays tax only on Austrian income: from work in Austria, Austrian real estate, business through a permanent establishment, and dividends and royalties from Austria. The zero bracket barely helps: when tax is assessed on a return, EUR 11,077 is added to a non-resident's income in 2026 (section 102 EStG).

Where a treaty applies, excess withholding tax is refunded on application to the tax office.

When to file a tax return in Austria and what the penalties are

An employee with a single salary in Austria usually does not need to file a return: the employer has already withheld the tax. But a voluntary employee assessment (Arbeitnehmerveranlagung) often brings money back, and it can be filed up to five years back. Everything else - sole traders, rental income, foreign income - requires an annual return.

Returns are filed through the taxpayer portal FinanzOnline. Paper forms are allowed only with prior-year turnover of no more than EUR 55,000 or where filing online is technically impossible.

An employee must file if, besides the salary, other income for the year exceeded EUR 730, for example from renting out a flat. Income from a foreign broker or bank from which no Austrian 27.5% tax was withheld must also be declared. The filing deadline can be extended on a reasoned request via FinanzOnline.

Penalties and surcharges

• Late return: a late filing surcharge (Verspätungszuschlag) of up to 10% of the assessed tax if the delay is not excused.
• Late payment: a late payment surcharge (Säumniszuschlag) of 2%, another 1% after three months and another 1% after a further three months.
• Deliberate evasion: a fine of up to twice the evaded tax under the Fiscal Offences Act (Finanzstrafgesetz); in large cases a criminal court and possible imprisonment.

The tax office sees accounts at Austrian banks through the account register (Kontenregister) and receives data on residents' foreign accounts through automatic exchange of financial information between countries.

What Austrian taxes mean for people relocating

Austria taxes labour heavily and capital moderately. A salary of EUR 6,000 a month loses more than a third to tax and contributions, while dividends and gains on shares are taxed at a flat 27.5%, with no inheritance or wealth tax.

Who Austrian taxes suit and who they do not

• Good fit: employees with children (14 salaries, 6% on the 13th and 14th, family bonus of up to EUR 2,000 per child), holders of share and crypto portfolios (27.5% with no progression), anyone planning to pass assets to children (no inheritance tax).
• Poor fit: freelancers and sole traders with profit of EUR 100,000 a year or more (the top slice taxed at 48-50%, plus SVS contributions), Russian tax residents with income from Russia (treaty suspended), anyone looking for a special regime for foreigners: Austria has no lump-sum taxation like Switzerland.

Exit tax when leaving Austria

Leaving Austria does not wipe out tax on accumulated capital. On moving abroad, unrealised gains on shares, company stakes, funds and crypto are treated as realised and taxed at 27.5% (Wegzugsbesteuerung), as if everything were sold on the day of departure.

On a move to an EU or EEA country the tax is, on application, not assessed until an actual sale. Since 1 July 2026 the Budget Measures Act 2026 (Budgetmaßnahmengesetz 2026, published on 30 June 2026) adds a duty: if the deferred income for a year exceeds EUR 100,000, you must confirm by 31 December of the following year that the assets have not been sold. For older deferrals a one-off confirmation is due by 31 December 2026. On a move outside the EU and EEA the tax is, as a rule, payable immediately.

What to do before the move

• Decide where tax residence will be in the year of the move: renting a flat in Austria already makes you resident.
• Gather documents on the purchase price and date of shares, funds and crypto: without them, tax on a later sale in Austria is harder to calculate.
• For Russian citizens and residents: work out the double tax on Russian income in advance.
• If a business is planned: compare a sole proprietorship and a GmbH using your own profit figures.

Taxes are only part of the decision. The routes to a passport are covered on Austrian citizenship by naturalisation and Austrian citizenship by investment, the country overview is on Austria: citizenship, residence, taxes and visas, and other countries' taxes are under taxes and tax residency. Complex cases with assets in several countries are handled by Murblz specialists.

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