Austrian tax season: What deductions and claims can help you get your money back?
Austria's high taxes and compulsory contributions help pay for its renowned public services and healthcare - but that doesn't mean you can't use legal deductions and claims to get some money back come tax season.
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 can 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).
After that, you’ll have to pay income tax on anything that surpasses € 11,693 in a year. It can add up to a substantial amount of your gross income, and contributions are taken automatically from your paycheck if you are a salaried worker.
You can read more about how to file your taxes in Austria HERE.
However, you can add many tax deductions to your tax return filing to help you get some of your overpaid taxes back.
Tax-reducing expenses
Certain expenses can reduce your taxable income as long as they are directly connected to the revenue, also known as business expenses. This could include training costs, office supplies, and others.
There are particular circumstances and regulations for some items, especially working from home, training and transportation costs, so it is worth checking your specific case with a tax advisor.
Every employee can also use a lump sum of €132 per year or calculate each item individually.
READ ALSO: EXPLAINED: The main Austrian ‘tax traps’ foreigners should be aware of
Tax deductions
There are also several tax deductions that you can claim (some, like the pensioner or transportation deduction, will come automatically with your payments and wage). Here are the tax deductions for 2023:
- Family Bonus Plus up to 18 years: €166.68/month and Family Bonus Plus from 18 years: €54.18/month
Parents whose child is entitled to family allowance are entitled to the Family Bonus Plus.
- Transportation deduction: €421/year
All employees are entitled to the transportation deduction, which is automatically considered by the employer and settled by a lump sum.
- Pensioner deduction: up to €868/year
The agency paying out your pension settles the pensioner deduction automatically.
- Increased pensioner deduction: up to €1,278/year
This applies if the current pension income does not exceed €19,930 during the calendar year, the person lives in a marriage or registered partnership with someone who earns no more than €2,200 per year and has no entitlement to the single-earner tax credit.
- Cost of living tax credit: up to €500/year
This year, low-income employees will receive a cost of living tax credit which is automatically taken into account in the employee tax assessment if the requirements are met.
- Single-earner tax credit: €520/year (in case of one child, more if there are more children)
The single-earner tax credit is due if a taxpayer with at least one child is, for more than six months in the calendar year, married or a registered partner to a spouse subject to unlimited tax liability, or the spouse receives income in 2022 of no more than €6,000 in the calendar year.
- Support money deduction: up to €62 per month and per child
This tax deduction is for parents who pay child support for a child not living in the household.
READ ALSO: EXPLAINED: What is Austria’s church tax and how do I avoid paying it?
(Photo by MIGUEL MEDINA / AFP)
Other deductions
- Special expenses
Certain private expenses can be claimed in your tax return, including church tax payments (up to €400), tax-consultancy costs to an unlimited amount, insurance coverage, donations to recognised organisations (deductible only to the extent that they do not exceed 10 percent of the total amount of income of the relevant year of assessment).
- Environmental expenses
Certain expenses to improve the energy and heat efficiency of a building (such as insulation of external walls, roofs or replacement of windows) are also tax-deductible.
- Extraordinary burdens
Certain expenses may be considered extraordinary if they are inevitable and if they considerably affect your economic performance capacity. This is often the case with medical expenses, which can be deducted up to a certain amount, depending on income. Prescribed medication is fully deductible; you can also deduct expenses for therapeutic aids, childbirth costs, disabilities and more.
Certain diseases with dietary requirements prescribed by a physician have separate lump sums. For example, people diagnosed with diabetes have a monthly tax allowance of €70.
Extraordinary expenses for dependants can also be deducted in the same way.
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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 can 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).
After that, you’ll have to pay income tax on anything that surpasses € 11,693 in a year. It can add up to a substantial amount of your gross income, and contributions are taken automatically from your paycheck if you are a salaried worker.
You can read more about how to file your taxes in Austria HERE.
However, you can add many tax deductions to your tax return filing to help you get some of your overpaid taxes back.
Tax-reducing expenses
Certain expenses can reduce your taxable income as long as they are directly connected to the revenue, also known as business expenses. This could include training costs, office supplies, and others.
There are particular circumstances and regulations for some items, especially working from home, training and transportation costs, so it is worth checking your specific case with a tax advisor.
Every employee can also use a lump sum of €132 per year or calculate each item individually.
READ ALSO: EXPLAINED: The main Austrian ‘tax traps’ foreigners should be aware of
Tax deductions
There are also several tax deductions that you can claim (some, like the pensioner or transportation deduction, will come automatically with your payments and wage). Here are the tax deductions for 2023:
- Family Bonus Plus up to 18 years: €166.68/month and Family Bonus Plus from 18 years: €54.18/month
Parents whose child is entitled to family allowance are entitled to the Family Bonus Plus.
- Transportation deduction: €421/year
All employees are entitled to the transportation deduction, which is automatically considered by the employer and settled by a lump sum.
- Pensioner deduction: up to €868/year
The agency paying out your pension settles the pensioner deduction automatically.
- Increased pensioner deduction: up to €1,278/year
This applies if the current pension income does not exceed €19,930 during the calendar year, the person lives in a marriage or registered partnership with someone who earns no more than €2,200 per year and has no entitlement to the single-earner tax credit.
- Cost of living tax credit: up to €500/year
This year, low-income employees will receive a cost of living tax credit which is automatically taken into account in the employee tax assessment if the requirements are met.
- Single-earner tax credit: €520/year (in case of one child, more if there are more children)
The single-earner tax credit is due if a taxpayer with at least one child is, for more than six months in the calendar year, married or a registered partner to a spouse subject to unlimited tax liability, or the spouse receives income in 2022 of no more than €6,000 in the calendar year.
- Support money deduction: up to €62 per month and per child
This tax deduction is for parents who pay child support for a child not living in the household.
READ ALSO: EXPLAINED: What is Austria’s church tax and how do I avoid paying it?
Other deductions
- Special expenses
Certain private expenses can be claimed in your tax return, including church tax payments (up to €400), tax-consultancy costs to an unlimited amount, insurance coverage, donations to recognised organisations (deductible only to the extent that they do not exceed 10 percent of the total amount of income of the relevant year of assessment).
- Environmental expenses
Certain expenses to improve the energy and heat efficiency of a building (such as insulation of external walls, roofs or replacement of windows) are also tax-deductible.
- Extraordinary burdens
Certain expenses may be considered extraordinary if they are inevitable and if they considerably affect your economic performance capacity. This is often the case with medical expenses, which can be deducted up to a certain amount, depending on income. Prescribed medication is fully deductible; you can also deduct expenses for therapeutic aids, childbirth costs, disabilities and more.
Certain diseases with dietary requirements prescribed by a physician have separate lump sums. For example, people diagnosed with diabetes have a monthly tax allowance of €70.
Extraordinary expenses for dependants can also be deducted in the same way.
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