Navigating Austria's tax system can be complex with its multi-level tax approach, involving taxes at the federal, state, and municipal levels. But we’re here to guide you through the intricacies in simple terms. Learn about the income tax brackets, how to file taxes, available tax deductions and what other taxes you need to pay in Austria.
Who needs to pay income tax in Austria?
All income earned in Austria is subject to income tax. Non-residents also pay income tax on money earned from Austrian sources. Income could be from sources such as employment, rent, capital assets, trade, etc.
If you’re living and working in Austria for over 6 months, you’ll have unlimited liability to pay tax. This means you’ll be liable to pay taxes on your worldwide income. Students who are working part-time and earning more than the tax-free allowance of €11,693 are also liable to pay income tax.
If you don’t have Austria as your main residence but work in Austria, you’ll have limited liability to pay tax. In this case, you’ll be taxed in Austria only on your Austrian income.
Besides this, it’s good to know that under the Austrian tax system, income tax is collected in 2 different ways. Those who are employed are subject to wage tax in Austria. In this case, the employee deducts the wage tax for you before paying your salary. Those who are self-employed, are subject to income tax and need to file a return themselves. But for ease of understanding, we will refer to both as income tax.
Austrian income tax rates
Under the Austrian tax system, income tax is charged progressively, ranging from 20% to 55%. You can calculate how much income tax will be deducted by looking at the Austrian income tax rate (2023):
| Income | Austrian Income Tax Rate |
|---|---|
| up to €11,693 | 0% |
| €11,694 to €19,134 | 20% |
| €19,136 to €32,075 | 30% |
| €32,076 to €62,080 | 42% |
| €62,081 to €93,120 | 48% |
| €93,121 to €1,000,000 | 50% |
| Above €1,000,000 | 55% |
If you have limited liability to pay tax because you’re a non-resident in Austria, you must add a fixed amount of €9,567 to your actual income. This "fictional income increase" ensures fair taxation for residents and non-residents. Additionally, tax-free basic income for non-residents is reduced to €2,000 from €11,000.
“Use the Austrian salary calculator to easily determine your earnings after taxes.
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Do I need to fill out my tax return in Austria?
If you’re working in Austria as an employee, you typically don’t have to file an income tax return. Your employer will deduct income tax and social security contributions every month and send them to the tax office. The net amount will be what you receive in your Austrian bank account.
But you should file a tax return if your personal situation has changed. The Austrian tax office (Finanzamt) deducts the same amount of tax every month as they work with the assumption that your income is the same throughout the tax year.
If that’s not the case for you, then filing an income tax return is necessary. Otherwise, you’ll pay too much or too little tax. For instance, if you got a promotion, lost your job, or simply are eligible for tax refunds based on your personal situation.
How to file income tax in Austria
To file taxes in Austria, log in to FinanzOnline and register yourself on the online portal. You can register using ID Austria. If you don’t have one yet, you will receive access information by post in a few days. Once registered, fill in the L1 form and then declare any tax deductions you may be eligible for.
Alternatively, you can register in person at the tax office.
“Check out the demo to get a feel of the FinanzOnlien portal.
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The deadline for filing taxes in Austria in 2023 is 30th June. If you miss the deadline, you could receive a late payment penalty.
Where do I find my tax ID in Austria?
In Austria, all tax-paying residents receive a Tax Identification Number (TIN), known as Steuernummer or Steuerliche Identifikationsnummer. This 9-digit number is crucial for filing your tax return.
To obtain your TIN, visit your local tax office (Finanzamt) or access it through Finanzonline. As an international resident, you'll find your TIN on official documents related to your Austrian residency, such as your residence permit and registration certificate.
Social Security contributions in Austria
Besides paying income tax, you also pay social security contributions. As an employee in Austria, paying social security contributions is mandatory, and your employee will deduct this amount before paying you your wage.
The total social security amount depends on your monthly earnings. But both you and your employer share the responsibility of paying social security tax. As an employee in Austria, you’ll pay 18.12% towards social security contributions, and your employer will contribute the remaining 21.03%.
Find out what exactly social security contributions are paying for below:
| Social Security Breakdown | Employer Contribution | Employee Contribution |
|---|---|---|
| Sickness | 3.78% | 3.87% |
| Unemployment | 3% | 3% |
| Pension | 12.55% | 10.25% |
| Accident | 1.1% | 0% |
| Miscellaneous | 0.6% | 1% |
| Total | 21.03% | 18.12% |
The maximum monthly social security tax for regular-income individuals is €5,850. Extra payments like bonuses are also subject to social security tax. Still, there is a yearly limit of €11,700 for special or extra payments. z
Tax refund in Austria
A tax refund in Austria means getting back some of the money you paid in taxes.This typically happens when the deducted tax exceeds the actual amount of tax owed.
Here's what you can claim:
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Work-related expenses: If you spend money because of your job, like getting to work or buying stuff for work, you can get some of that money back. In 2020 and 2021, you could also get money back for buying office furniture if you work from home.
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Home office costs: If you work from home, you can get money back for some of the expenses, like part of your rent or the electricity you use.
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Healthcare bills: If you paid for things like going to the doctor or getting medicine and your insurance didn't cover it all, you can get some of that money back.
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Education expenses: If you're studying, you can get some money back for things like tuition or books.
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Giving to charity: If you give money to charities, you can get some of it back as well.
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Saving for retirement: If you save money for your retirement in a special account, you can pay less tax.
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Childcare costs: If you're paying for childcare, some of those costs can be refunded.
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Loan interest: If you're paying interest on loans, you might get some of that money back too.
To apply for a refund, you can fill out a form called ArbeitnehmerInnenveranlagung and submit it to the Austrian tax office. Make sure to keep all your receipts and records, and always check the latest tax rules.
Double taxation in Austria
Double taxation agreements are your financial safeguard, ensuring you're not hit with double taxes, one in Austria and another in your home country. They provide clear guidelines on where your income should be taxed. Austria has thoughtfully established double taxation agreements with approximately 84 countries and territories globally. If you're an expat, it's essential to verify the specific terms and provisions of the agreement between Austria and your home country to ensure you're paying the appropriate amount of taxes.
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