Austria

Austria uses a progressive income tax system with seven brackets, ranging from 0% on income up to EUR 12,816 to 55% on income above EUR 1,000,000. The rates in between are 20%, 30%, 40%, 48%, and 50%. There is no state or local income tax. Social insurance contributions for employees total approximately 18% of gross salary, covering pension (10.25%), health (3.87%), unemployment (3%), and other contributions. Employer contributions total approximately 21%. Contributions are capped at a maximum monthly base of approximately EUR 6,060. Austria mandates 13th and 14th salary payments (Weihnachtsgeld and Urlaubsgeld), which are taxed at a flat 6% up to EUR 2,100, making them very tax-efficient. This effectively adds two months of mostly tax-free pay. Tax deductions include a commuter allowance (Pendlerpauschale), child tax credits (Familienbonus Plus of up to EUR 2,000 per child), and deductions for voluntary pension contributions. Capital gains are taxed at a flat 27.5%. VAT is 20% (10% reduced rate). The corporate tax rate is 23%.