Change in Income Tax Tables and Allowances
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The Progression Compensation Act 2025 introduces several key changes to Austria’s Income Tax Act 1988, focusing on adjusting thresholds, allowances, and simplifying certain taxation processes.
Income Tax Changes
- Adjustment of Thresholds: The basic income thresholds for various tax brackets and exemptions have been increased.
| From (EUR) | To ( EUR) | Rate (%) |
|---|---|---|
| 0 | 13308 | 0 |
| 13309 | 21617 | 20 |
| 21618 | 35836 | 30 |
| 35837 | 69166 | 40 |
| 69167 | 103072 | 48 |
| 103073 | 1000000 | 50 |
| 1000001 | 99999999999 | 55 |
Daily Time Allowance
- Increased Daily Allowances for Meals and Accommodation: The daily meal allowance has been raised:
- From €26.40 to €30.00 for full-day travel.
- The accommodation allowance has increased from €15.00 to €17.00 per night.
- Updated Distance Eligibility: Travel allowances now apply for distances of more than 1 kilometre, reduced from the previous threshold of more than 2 kilometres.
Travel Allowances
- Transport Subsidies: A new cap has been introduced: total transport subsidies are now limited to €2,450 per calendar year.
- Mileage Allowance for Bicycles: Employees using bicycles are now entitled to €0.50 per kilometre, up from €0.05.
- Compensation for Motor Vehicles: For mopeds, motorcycles, passenger vehicles, and combination vehicles, the allowance is standardized at €0.50 per kilometre.
Child Allowance
A new child allowance of €60 per child per month is introduced, effective July 2025, for eligible taxpayers meeting specific income and family status criteria.
Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.
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Austria – Change in Income Tax Tables and Allowances
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