Austrian Income Tax
Our tax guide for freelance contractors working in Austria
Individuals who have their habitual abode (deemed if they stay for longer than 6 months) or their domicile (permanently occupy a residence) in Austria are considered to be resident for tax purposes and are taxed on their worldwide income. Employment income is subject to individual income tax. It includes all remuneration in cash or in kind paid to the employee by the employer or a third party. Benefits in kind are taxed at average values fixed by the Ministry of Finance or the tax directorates. They are usually lower than the market values. An employee can deduct the moving costs paid from taxable income if seconded by the employer. Only 25% of pension income is taxable if the individual contributed to the pension fund himself. Pension contributions paid by the employer or the employee are not taxable. Employees may deduct expenses incurred in creating or preserving their income. There are a few standard lump-sum deductions: for example EUR 132 for business-related expenses; a deduction for travel expenses between EUR 495 and 1’467 if the distance between home and work is more than 20 km. There are several tax credits like the employment tax credit of EUR 54, a traffic credit of EUR 291, a head of household credit of EUR 364 depending on certain limits for the spouse’s income and household credits for children. Tax returns must be filed by 30 April of the year following the tax year or 30 June if the tax return is submitted electronically. Married persons file separate tax returns. The marginal tax rates for 2008 are 0% up to EUR 10’000, 38.333% for the next EUR 15’000, 43.596% for the next EUR 26’000 and 50% over EUR 51’000. There are special tax and social security rates for holiday and Christmas bonuses which is why the yearly salary is usually paid in 13 or 14 instalments. Employers withhold tax at source from the salary payments as a pre-payment on the employee’s final income tax assessed with the tax return.
EUR 26’000 and 50% over EUR 51’000. There are special tax and social security rates for holiday and Christmas bonuses which is why the yearly salary is usually paid in 13 or 14 instalments. Employers withhold tax at source from the salary payments as a pre-payment on the employee’s final income tax assessed with the tax return.