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Austria's income tax system is progressive, with rates for the 2025 tax year ranging from 0% to 55%, based on income levels. The first €12,816 of income is tax-free, followed by a 20% rate on income above this amount, 30% on income over €20,818, and so on, reaching 55% for income exceeding €1,000,000. The most important revenue sources for the Austrian government are income tax, corporate tax, social security contributions, value-added tax, and tax on goods and services. There also exists a minimum tax for both limited liability companies and joint-stock companies that is equal to 5% of their registered capital.
| Characteristics | Values |
|---|---|
| Tax revenue as % of GDP | 42.7% in 2016 |
| Most important revenue sources | Income tax, corporate tax, social security contributions, value added tax, tax on goods and services |
| Other important taxes | Municipal tax, real-estate tax, vehicle insurance tax, property tax, tobacco tax |
| Property tax | Does not exist |
| Gift tax | Cancelled in 2008 |
| Inheritance tax | Cancelled in 2008 |
| Self-employed tax allowance | €3,900 per year |
| Tax-free income | First €12,816 |
| Income tax rate for income above €12,816 | 20% |
| Income tax rate for income above €20,818 | 30% |
| Income tax rate for income above €1,000,000 | 55% |
| Minimum tax for LLCs and joint-stock companies | 5% of registered capital, i.e. €1,750 and €3,500 annually |
| Minimum tax for banks and insurance companies | €5,452 |
| Minimum tax for new firms | €1,092 in the first year |
| Maximum contribution basis for regular payments | €4,980 per month |
| Maximum contribution basis for special payments | €9,960 per year |
What You'll Learn
Income tax
There is also a minimum tax for limited liability companies and joint-stock companies, which is equal to 5% of their registered capital. Banks and insurance companies are subject to a different amount. For new firms, there is a decreased tax in the first year of their existence.
Austrian social insurance is compulsory and comprises health insurance, pension insurance, unemployment insurance, and accident insurance. The contributions are determined as a percentage of the total monthly earnings (up to specified maximum amounts) and are paid partly by the employee and partly by the employer. The maximum contribution basis for regular payments is €4,980 per month, while the maximum contribution base for special payments (those that do not occur on a monthly basis, such as bonuses) is €9,960 per year.
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Corporate tax
There also exists a minimum tax (Mindestkörperschaftssteuer) for both limited liability companies (LLC) and joint-stock companies that is equal to 5% of their registered capital. This equates to €1,750 and €3,500 annually. Banks and insurance companies are subject to a different amount – €5,452. For new firms, there is a decreased tax of €1,092 in the first year of their existence.
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Social security contributions
In Austria, social security contributions are one of the government's most important revenue sources. Austrian social insurance is compulsory and comprises health insurance, pension insurance, unemployment insurance, and accident insurance. The contributions are determined as a percentage of the total monthly earnings (but only up to specified maximum amounts) and are paid partly by the employee and partly by the employer. The maximum contribution basis for regular payments amounts to €4,980 per month. The maximum contribution base for special payments (those that do not occur on a monthly basis, such as a bonus) amounts to €9,960 per year.
Austria's income tax system is progressive, with rates for the 2025 tax year ranging from 0% to 55%, based on income levels. The first €12,816 of income is tax-free, followed by a 20% rate on income above this amount, 30% on income over €20,818, and so on, reaching 55% for income exceeding €1,000,000. These rates apply to taxable income after deductions, with various credits available to help reduce the overall tax burden.
In addition to social security contributions and income tax, other important taxes in Austria include corporate tax, value-added tax, tax on goods and services, municipal tax, real estate tax, vehicle insurance tax, property tax, and tobacco tax. There is no property tax in Austria, and the gift tax and inheritance tax were cancelled in 2008. Self-employed persons can take advantage of a tax allowance of €3,900 per year.
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Value added tax
Value-added tax is one of the most important revenue sources for the Austrian government. The country's income tax system is progressive, with rates for the 2025 tax year ranging from 0% to 55%, based on income levels. The first €12,816 of income is tax-free, followed by a 20% rate on income above this amount, 30% on income over €20,818, and so on, reaching 55% for income exceeding €1,000,000.
There also exists a minimum tax for both limited liability companies (LLCs) and joint-stock companies that is equal to 5% of their registered capital. For example, this could be €1,750 and €3,500 annually. Banks and insurance companies are subject to a different amount - €5,452. For new firms, there is a decreased tax of €1,092 in the first year of their existence.
Austrian social insurance is compulsory and comprises health insurance, pension insurance, unemployment insurance, and accident insurance. The contributions are determined as a percentage of the total monthly earnings (but only up to specified maximum amounts) and are paid partly by the employee and partly by the employer. The maximum contribution basis for regular payments amounts to €4,980 per month. The maximum contribution base for special payments (those that do not occur on a monthly basis, such as a bonus) amounts to €9,960 per year.
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Tax on goods and services
Austria's tax revenue in 2016 was 42.7% of GDP, according to the World Bank. The most important revenue sources for the government are income tax, corporate tax, social security contributions, value-added tax and tax on goods and services.
The income tax system in Austria is progressive, with rates for the 2025 tax year ranging from 0% to 55%, based on income levels. The first €12,816 of income is tax-free, followed by a 20% rate on income above this amount, 30% on income over €20,818, and so on, reaching 55% for income exceeding €1,000,000. These rates apply to taxable income after deductions, with various credits available to help reduce the overall tax burden.
There is also a minimum tax for both limited liability companies and joint-stock companies that is equal to 5% of their registered capital. For example, €1,750 and €3,500 annually. Banks and insurance companies are subject to a different amount - €5,452. For new firms, there is a decreased tax of €1,092 in the first year of their existence.
The maximum contribution basis for regular payments amounts to €4,980 per month. The maximum contribution base for special payments (those that do not occur on a monthly basis, such as a bonus) amounts to €9,960 per year.
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Frequently asked questions
Income tax in Austria is progressive, meaning that the more you earn, the more tax you pay. The first €12,816 of income is tax-free, followed by a 20% rate on income above this amount, 30% on income over €20,818, and so on, reaching 55% for income exceeding €1,000,000.
There is a minimum tax for both limited liability companies (LLC) and joint-stock companies that is equal to 5% of their registered capital. This amounts to between €1,750 and €3,500 annually. Banks and insurance companies are subject to a different amount - €5,452. For new firms, there is a decreased tax of €1,092 in the first year of their existence.
There is also a municipal tax, real-estate tax, vehicle insurance tax, property tax, tobacco tax, and social security contributions. Self-employed persons can use a tax allowance of €3,900 per year.
In 2016, tax revenue in Austria was 42.7% of GDP according to the World Bank.
