Wage tax

How wage tax is calculated

Wage tax (Lohnsteuer) in Austria is not one flat percentage on your whole salary; it runs across 7 tax bands. Each band has its own marginal rate, and that rate applies only to the slice of annual income that falls inside the band — not to the whole income. You do not tip your entire salary into a higher bracket; only the next euro earned is taxed at the rate of the band it lands in.

That is why your actual, effective tax rate is always lower than the highest marginal rate you reach. If your income stretches into the third band, you pay nothing on the first, the lower rate on the second, and the higher rate only on the top slice — your tax is a blend of every band you pass through.

The calculator on this site works monthly: it annualises your monthly pay, applies the band table to the annual income, and divides the resulting yearly tax back onto the month. The amounts in the table below are therefore annual figures.

The zero band replaces a tax-free allowance

Austria has no separate basic allowance deducted before the table. The bottom band itself plays that role: up to its ceiling — €13.539 of annual income — the marginal rate is zero. That is the tax-free zone. Only what lies above it is touched by wage tax at all.

For the diaspora this is a meaningful difference from systems with a fixed allowance: here the "allowance" is not a number you subtract, it is simply the first band of the table. On top of that, tax credits such as the commuter/transport credit (Verkehrsabsetzbetrag) reduce the computed tax directly: €496 a year as the base amount, which is the one this calculator applies. For lower incomes the law provides two higher variants — a supplement of €804 and the increased credit (erhöhter Verkehrsabsetzbetrag) of €853; both depend on the income level and neither is applied here. The underlying logic remains the band-by-band table.

One further credit this calculator likewise does not apply is the sole-earner or single-parent credit (Alleinverdiener- bzw. Alleinerzieherabsetzbetrag). It is €612 a year with one child, €828 with two and €1.101 with three, and each further child adds €273. What separates the two variants is one extra condition: only the sole-earner credit requires the partner's income to stay at or below €7.411 a year. The calculator does not ask about that either.

The tariff — the tax bands · 01.01.2026 - 31.12.2026

Re-indexed every year: bracket creep

The band thresholds are not fixed for good. Since 2023 the tax bands have been adjusted for inflation every year by statute, to blunt so-called bracket creep — the effect where a pay rise that only tracks inflation would otherwise push you into a higher band without leaving you any better off in real terms. Only the top million-euro band is exempt from the automatic adjustment.

That means: unlike a tax figure that changes only at a rare statutory reform, a change to the tax bands is the norm from one year to the next, not the exception. The bands shown belong to the 01.01.2026 - 31.12.2026 period; a different year has different thresholds. The rates themselves — 0 % up to 55 % — mostly stay put; what moves is the income thresholds in between.

The open top — and where the calculator stops

The top band of the wage-tax table is open-ended: it has no upper limit, and the 55 % rate applies to every euro above €1.000.000. That top rate is time-limited — it runs until 2029 and, under the law as it stands, then drops back to the band below it. The calculator can handle income of any size precisely because the table is not cut off at the top.

This is kept deliberately honest, and it has a flip side elsewhere: not every table in the Austrian payroll system is open at the top. The favourably-taxed schedule for special payments (the 13th and 14th salary), for instance, ends at a fixed ceiling. Where a table is closed, the calculator does not guess on past the ceiling — it stops there and treats the excess under the ordinary tariff, rather than pretending the extra income is untaxed. That refusal to guess is intentional: an honest boundary beats a confident wrong number.

Where the numbers come from

The governing tariff is not invented by this site. The Federal Ministry of Finance (BMF) publishes the wage-tax tariff with the band thresholds and the marginal rates; the source recorded here is "BMF Steuertarif, Stand 1. Jänner 2026". For a real calculation, the authoritative source is always the current official BMF tariff for the year in question.

If the tariff changed recently it may not be reflected here yet, and none of these figures has been through our final sign-off. The structure — a band-by-band marginal tariff, a zero zone instead of an allowance, annual re-indexing — is dependable; for the specific thresholds and rates, the cited source is the binding one.

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