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Everything you need to know about filing taxes in Austria

One of the difficult things about moving to a new country is figuring out the bureaucracy, especially regarding taxes. Here's what you need to know about the Austrian tax system.

Everything you need to know about filing taxes in Austria
Photo: Pixabay.

Austria notoriously has an excellent but expensive social system. Austrian cities rank high on quality of life due to their great public services, including public transportation, parks and pools, security and social benefits for the population (hello, free childcare!).

All of that, though, comes at a price. If you are employed in Austria, expect a chunk of your gross salary to be deducted immediately from your payslip.  

The most considerable deduction is almost certainly Sozialversicherungsbeiträge or social insurance contributions. It may be broken down into Pensionsversicherung (pension insurance — you pay 10.25 percent of your salary for this), Krankenversicherung (sickness insurance — 3.87 percent of your salary), Arbeitslosenversicherung (unemployment insurance — 3 percent of your salary). 

READ ALSO: EXPLAINED: The main Austrian ‘tax traps’ foreigners should be aware of

If you are employed, your social contributions total 18.1 percent of your salary, while your employer contributes 22.5 percent. However, the rules for self-employed workers and freelancers are different.

After that, you’ll have to pay income tax on anything that surpasses € 11,693 in a year. If you are an employed worker and your salary is your only source of income, you don’t have to file a tax return. However, if you didn’t receive your wages during the whole year or if you have certain deductions of expenses, it might be worth it to do so. 

How much do you pay in income tax in Austria?

Austria has a progressive tax system, meaning the more you earn, the higher your taxes. If, after deductions (including the social security contributions), you earn less than €11,693 in a year, you won’t have to pay any income tax. 

Tax rates are:

Income (€)

Tax rate (%)

11,693 and below


11,694 to 19,134


19,135 to 32,075


32,076 to 62,080


62,081 to 93,120


93,121 to 1,000,000


above 1,000,000


These rates and income basis are valid in 2023. From then on, Austria decided to adjust the income amounts yearly based on inflation. You can check more information HERE.

When do you have to do it?

You can file your tax return (also called the ANV or “Arbeitnehmerveranlagung”) for the year of 2022 by April 30th 2023, or by June 30th 2023, if you file your tax return online. There are also different deadlines for those filing through a tax advisor. 

READ ALSO: Explained: How to understand your payslip in Austria

However, there is still the possibility of filing retroactively for up to five years. So, in 2023, you can file your tax returns for 2018 up to 2023. If you are deducting expenses, be sure to keep the relevant invoices and documents for at least seven years in case of a tax audit.

How do you submit it?

It’s relatively easy to submit your tax declaration online via the official platform FinanzOnline. However, you do need a HandySignatur or Austria ID (which will require some back and forth with mailed letters and an authentication app on your smartphone. 

You can either file your ANV automatically, which is a good option for those expecting returns due to not having been employed for the 12 months of the previous year, or you can do a manual filing. This will be the case for anyone who is claiming deductible expenses.

The system is very straightforward, though you might want the help of a good dictionary or a German speaker. You can add each possible deductible expense or claim allowance in different lines. 

You can then add the IBAN of the bank account you want to receive your tax return if you haven’t done so already. In some cases, the system will ask for an Austrian IBAN, but you can use banks from anywhere in the SEPA area. If you get an error notification, you can just go to the general information on your profile and enter your IBAN as a “foreign bank account”. 

READ ALSO: Reader question: Do I need to open a local bank account when moving to Austria?

Filing your taxes is not exactly a fun activity. Photo: Markus Winkler on Unsplash

What can you deduct from your taxes?

You can deduct many things from the taxes that might help you get some money back from the government. For example, in terms of work, any equipment supply or even courses you’ve taken that are related to your job could be deducted. 

If you work from home (at least 26 days in the calendar year), as of 2022, employees can declare a deduction of up to €300, known as the Home Office Pauschale, home office supplies are also considered work-related expenses, which you can deduct individually.

If you incurred unforeseen expenses in 2021 that surpassed your ability to pay them, you might be able to claim them as tax-deductible, according to FinanzOnline. Such costs include medical bills not covered by your health insurance, braces, health care expenses, nursing expenses, and expenses associated with a physical disability.

READ ALSO: EXPLAINED: What is Austria’s church tax and how do I avoid paying it?

Individuals can claim a deduction for church tax up to a maximum of €400. At the same time, charitable contributions to eligible institutions can be deducted up to 10 percent of the current year’s taxable income. Additionally, Austrian tax adviser fees are fully deductible.

The government also gives several allowances. Some, such as the commuter allowance, are usually already added to your payslip. However, you can also claim allowances if you are the sole wage earner (the amount depends on how many children you have) or if you pay child alimony, for example. 

A tax credit known as a Family bonus plus of €2,000 per child can be claimed for children up to the age of 18 years who live in Austria and are entitled to the family allowance (Familienbeihilfe). For children between 19 and 24 (in some cases, 25), the family bonus plus scan be granted up to an amount of €650 yearly.

NOTE: This article is only a guide to some of the more common rules and procedures associated with paying tax in Austria. It is not intended to serve as legal advice. Have we missed something? Get in touch at [email protected]

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Is inflation finally subsiding in Austria?

Statistics Austria released a preliminary estimate showing that the inflation rate in May was 8.8 per cent, a decrease from the previous month's rate of 9.7 per cent. So are prices finally going to go down?

Is inflation finally subsiding in Austria?

Tobias Thomas, the Director General of Statistics Austria, attributes this decline to lower fuel prices and less price pressure on food items.

“In May 2023, inflation in Austria has clearly lost momentum,” he said. “According to a first estimate, inflation is expected to be at 8.8 percent after 9.7 percent in April. This is the lowest value since June 2022. The main reason for this decline is the uninterrupted downward trend in fuel prices. The upward trend in food prices continues to weaken.”

A similar trend was observed in Germany, where the inflation rate for goods and services decreased from 7.2 percent in April to 6.1 percent in May. According to Eurostat, the inflation for the eurozone is estimated to be at 6.1 percent – down from the 7 percent registered in April. 

READ ALSO: What will become more expensive in Austria in June?

However, despite the decline in May, inflation continues to burden many individuals significantly. 

According to calculations by the Momentum Institute, an institute affiliated with the trade union, a single-person household needs to spend an average of €405 more per month this year to maintain their standard of living compared to 2021. The highest cost increases are observed in housing and energy, amounting to an additional €117 per month, followed by transport with €81, and food with an additional cost of €71 per month. 

The challenge lies in the fact that the average increase in income of €260 does not fully offset these additional costs, resulting in a shortfall of €145 per month to maintain the standard of living experienced in 2021.

Final report by mid-June

From a large set of price data, Statistics Austria initially calculates the flash inflation estimate at the beginning of the following month. This estimate includes around 80 to 90 per cent of the prices required for the calculation. Typically, the inflation rate is accurately calculated with a deviation of only 0.1 percentage points. 

READ ALSO: What is driving rising inflation in Austria and will the government act?

The final inflation data, including inflation rates for specific product groups, are released later in the month. In the case of May 2023, this will occur on June 16th.

Statistics Austria experts previously had an indication that a wave of inflation was approaching the country due to indices for import or producer prices, which provide insights a few months ahead of the CPI data. 

However, the current indications are different, as producer prices only rose by 4.6 per cent in April. This suggests that the cost of living pressure on consumers will likely ease in the future.