Dealing with tax in Austria while being overseas can be a tricky process. Bradford Jacobs is a front-line specialist in providing expert advice on international taxation. Over 20 years of experience in the field ensures our clients and partners comply with every aspect of taxation legislation wherever they operate worldwide. We bring global reach and local know-how to the table, both essential for foreign companies expanding into Austria. 

Our dedicated Professional Employment Organisation (PEO) and Employer of Record (EOR) specialists remove the burdens of worrying about tax complications while you focus on building your business in Austria. 

Overview of Tax in Austria

Personal Income Tax (PIT):

Eight bands apply to taxation on the payroll; exemption up to €11,000 (USD 11,009) with 55% on the excess above €1,000,000 (USD 1,000,850) as the top rate. Bonus payments are taxed; exempt up to €620 (USD 620), with four additional bands up to 50% on the excess over €83,333 (USD 83,404).

Social Insurance Taxes:

Employers contribute the equivalent of 21.23% of employees’ salaries from payroll. In comparison, employees contribute 18.12% to various categories assessed up to a maximum wage of €5,500 (US$5,490) per month for both employers and employees.

Corporate Income Tax (CIT):

Whether profits are retained by the company or distributed, the headline rate is 25%. According to the Eco-Social Tax Reform Act, rates will be reduced to 24% in 2023 and 23% in the following year.

Indirect Taxes:

Goods and services attract Value Added Tax (VAT) at 20%. A rate of 13% applies to animals, plants, and cultural and leisure activities, with 10% attached to books, food, medicines, passenger transportation, hotel accommodation and restaurant meals, among other categories.

Withholding Tax on Interest (WTI):

Interest on distributed profits is withheld at 25% for corporations and 27.5% for others.

Capital Gains Tax (CGT):

Gains on investments are taxed at 27.5% and on real estate at 30%.

Personal Income Tax in Austria

Eight bands apply to taxation on the payroll, including an exemption up to €11,000 (USD 11,009) and 55% on the excess above €1,000,000 (USD 1,000,850) as the top rate. Bonus payments are taxed; exempt up to €620 (USD 620), with four additional bands up to 50% on the excess over €83,333 (USD 83,404).

From Not Over Tax %
EUR 11,000
EUR 11,001
EUR 18,000
EUR 18,001
EUR 31,000
EUR 31,001
EUR 60,000
EUR 60,001
EUR 90,000
EUR 90,001
EUR 1,000,000
Over EUR 1,000,000
Note: €9,000 is added to the tax base of limited liability non-resident taxpayers, who earn employment income from Austria, or benefit from social insurance payments. The €9,000 is not part of payroll accounting.

Individual Tax Rules in Austria

  • The tax year is from January 1 until December 31.
  • Married couples are not permitted to file joint tax returns.
  • Individual employees’ tax is generally deducted and withheld at source by the employer and remitted to the relevant local tax office of Tax Authority Austria (TAA).
  • Individuals responsible for their taxation with income not covered by pay-as-you-earn payroll file returns with their local tax office by April 30 of the following year (hard copies) or June 30 (electronically).
  • Payroll employment income includes salary and all benefits in cash or kind, which may consist of vehicles and housing provided or subsidised by the company.
  • Individuals are considered tax residents if they have a home or establishment or have lived in Austria for six months.
  • Non-resident taxpayers who earn employment income in Austria, or benefit from social insurance payments, have €9,000 (US$9,007) added to their tax base. It is not part of payroll accounting.
  • Individuals have social security contributions totalling 18.12% deducted from their salaries by employers and remitted to the authorities.

Employer's Social Insurance and Statutory Contributions in Austria

Employers contribute to the Association of Austrian Social Insurance Institutions (HVB) system by remitting percentage equivalents of their employees’ payroll to various funds, capped at a maximum of €5,500 (US$5,504) per month, as follows:

Sickness: 3.78%

Unemployment: 3.00%

Pension: 12.55%

Accident: 1.20%

Miscellaneous: 0.70%

Total: 21.23%

Employers also contribute 1.53% of the employee’s gross monthly salary into an external company pension fund, from which the employee claims severance.


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