Income tax in Austria: how the brackets work

Progressive by design

Austrian income tax is bracket-progressive: each rate applies only to the slice of income inside that bracket. Thresholds are indexed yearly since the end of cold progression.

The rates (structure is stable)

0% on the basic allowance (~€13k), then 20%, 30%, 40%, 48%, and 50% at the top (55% above €1M).

The classic myth

"Crossing into the 40% bracket taxes everything at 40%." No — only the part above the threshold. Earning more never leaves you worse off net.

What entrepreneurs should watch

• Your base is profit, not revenue.
• The Gewinnfreibetrag gives an automatic allowance, expandable via investments.
• Quarterly prepayments after your first real tax year can sting — plan ahead.

Billtree's Reports tab shows your running profit — reserve for prepayments early.