Income tax rates & bands

Austrian income tax works in slices. Your taxable scale income — salary, business and professional profits, rents and the other categories listed further down — is cut into bands, and each band is taxed at its own rate. Only income above EUR 1 million reaches the 55% top rate; everything below it is taxed at the lower band rates on the way up.

The band limits up to EUR 1 million are adjusted every year for inflation — automatically by two thirds of the measured rate, which lifted them by 1.733% for 2026 — so the euro figures above are specific to this year. The EUR 1 million entry point is not indexed, and the 55% rate is itself time-limited: the statute imposes it for the calendar years 2016 to 2029, so unless it is extended again the top rate returns to 50% from 2030. Employees also benefit from the favourable flat taxation of the Austrian 13th and 14th salaries, described with the other employment and executive-pay rules.

The tax base is the sum of seven statutory categories of income earned in the calendar year — and, importantly, income that fits none of them is not taxable at all:

• agriculture and forestry;
• professional and other independent services;
• an active trade or business;
• employment;
• investment income — interest, dividends, gains on financial instruments, derivatives and crypto assets;
• rent, lease payments and royalties; and
• other specified income, including certain annuities and capital gains on real estate.

Certain kinds of income are exempt — some employer-provided benefits in kind, for instance — and personal allowances exist for the taxpayer and family members. Certain losses can be offset against other income, within limits that depend on the category.

One structural point matters for couples: Austria taxes spouses entirely separately. There is no joint return and no splitting concept, so each spouse's income climbs the bands on its own. How a household arranges the ownership of income-producing assets between spouses therefore has a direct rate effect — one of several ordering questions best settled before the move to Austria.

Income tax is levied by assessment: the taxpayer files a return, and the tax office issues an assessment notice. Much of the tax, however, is collected before any return is filed. Employers withhold wage tax from salaries; Austrian banks withhold the flat tax on investment income, which for most portfolios settles the liability in full; and in real-estate sales, the attorney or notary handling the transfer typically withholds the 30% on the gain. Withholding is either final or credited against the assessed liability.

Returns must generally be filed electronically through the tax administration's FinanzOnline portal by 30 June of the following year; paper filing is permitted only exceptionally, with a 30 April deadline. Taxpayers represented by a tax adviser benefit from substantially longer deadlines, and extensions are possible in justified cases. Prepayments of the current year's tax fall due quarterly on 15 February, 15 May, 15 August and 15 November, and are credited against the final assessment; any balance is payable within one month of the assessment notice.

A new arrival's first Austrian return deserves particular care: it is where the start date of residence, the residence tests and the entry step-up values all crystallise into filed positions.