Tax cuts and bonus payments: Austria's financial measures that will benefit people this year
Austria's government has already decided on several financial measures, from tax deductions to one-off payments that will benefit those living there. Here's what you can expect.
The year 2023 might not be marked by a coronavirus pandemic, as most experts agree that the dangerous waves of it have already passed. However, Austria - and the Austrian government - still has some significant challenges to face.
As the inflation rate remains high and the war in Ukraine continues bringing instability to the continent, the federal government has to deal with the increasing cost of living just ahead of the looming elections in 2024.
With that scenario, the ÖVP-Green coalition has already announced a series of relief measures to provide financial support to persons in Austria in 2023.
Klimabonus 2023
One of the principal payments is the Klimabonus - which is paid out in full (€500 for eligible adults and €250 for underage Austrian residents) starting in February for those who were entitled to but did not receive their 2022 Klimabonus.
The payment will also be made regularly every October from the additional revenue the government gets with the CO2 tax. The amount varies between €100 to €200 per person, depending on the place of residence - those who live in Vienna, a city with abundant public transport options, are entitled to €100.
READ ALSO: Reader question: Will I get another Klimabonus payment next year in Austria?
Tax reform measures
From January 1st, several changes promoted by Austria's tax reform came into place, including some tax cuts and the abolition of the cold progression - a tax term used to describe an increased tax burden.
The planned tax cuts and the abolition of the cold progression will leave all taxpayers in Austria with more net income per month.
At the same time, social benefits, including maternity leave allowance, family allowance and others, increase annually as they are adjusted based on inflation rates.
READ ALSO: Austria’s 2023 budget: Where is the money going, and how will it affect you?
Tax brackets change
There are also significant changes on tax brackets in Austria. In 2023, income earnings up to €11,693 are not taxable (previously, this number was €11,000). Here are the changes and new rates:
Tax amount
Previous limit
New limit
Increase
0 percent
up to€11,000
up to €11,693
6.3 percent
20 percent
up to €18,000
up to €19,134
6.3 percent
30 percent
up to €31,000
up to €32,075
3.47 percent
41 percent
up to €60,000
up to €62,080
3.47 percent
48 percent
up to €90,000
up to €93,120
3.47 percent
50 percent
from €90,000
from €93,120
3.47 percent
55 percent
from €1 million
from €1 million
-
Electricity price brake
Austria's electricity price brake has been in force since December 1st, but its effects will be felt mainly in 2023 - and the price cap should be in place until June 30th 2024.
The price of electricity will be subsidised up to a consumption of 2,900 kilowatt hours, the government said. Until that limit, it will cost only ten cents per kilowatt hour – the energy price from before the current energy crisis.
Above that consumption limit, people will have to pay market prices for what they consume.
The Austrian government estimates that the measure will help Austrian homes save from €400 to €800 on energy bills a year. The Finance Ministry added that the average household’s savings would be €500.
READ MORE: How could Austria’s new electricity price brake benefit you?
Heating allowance
The heating cost subsidy was announced by the federal government in December and is intended to relieve households of between €200 and €400 per year as a one-off payment, as The Local reported.
The heating subsidy is intended for lower-income families, minimum pensioners and welfare recipients. It will be available whether they heat with gas, electricity, pellets or another fuel.
As provinces will distribute the grant, the Ministers did not give further details on income criteria, nor did they provide an estimate of the payment date.
READ ALSO: Austria to offer extra €400 for heating costs to low-income households
Other payments and aid
There are several other one-off payments and aid, and the government should also announce new changes in 2023.
Starting in early January, for example, a new "grid cost subsidy" pays €200 per year to low-income households - such as those who are exempt from the broadcasting fees (GIS).
Additionally, Austrian provinces, including Vienna, have announced local measures, including one-off payments and allowances, especially looking to cushion rising energy prices.
READ ALSO: EXPLAINED: How to keep energy bills down in Austria
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The year 2023 might not be marked by a coronavirus pandemic, as most experts agree that the dangerous waves of it have already passed. However, Austria - and the Austrian government - still has some significant challenges to face.
As the inflation rate remains high and the war in Ukraine continues bringing instability to the continent, the federal government has to deal with the increasing cost of living just ahead of the looming elections in 2024.
With that scenario, the ÖVP-Green coalition has already announced a series of relief measures to provide financial support to persons in Austria in 2023.
Klimabonus 2023
One of the principal payments is the Klimabonus - which is paid out in full (€500 for eligible adults and €250 for underage Austrian residents) starting in February for those who were entitled to but did not receive their 2022 Klimabonus.
The payment will also be made regularly every October from the additional revenue the government gets with the CO2 tax. The amount varies between €100 to €200 per person, depending on the place of residence - those who live in Vienna, a city with abundant public transport options, are entitled to €100.
READ ALSO: Reader question: Will I get another Klimabonus payment next year in Austria?
Tax reform measures
From January 1st, several changes promoted by Austria's tax reform came into place, including some tax cuts and the abolition of the cold progression - a tax term used to describe an increased tax burden.
The planned tax cuts and the abolition of the cold progression will leave all taxpayers in Austria with more net income per month.
At the same time, social benefits, including maternity leave allowance, family allowance and others, increase annually as they are adjusted based on inflation rates.
READ ALSO: Austria’s 2023 budget: Where is the money going, and how will it affect you?
Tax brackets change
There are also significant changes on tax brackets in Austria. In 2023, income earnings up to €11,693 are not taxable (previously, this number was €11,000). Here are the changes and new rates:
| Tax amount | Previous limit | New limit | Increase |
| 0 percent | up to€11,000 | up to €11,693 | 6.3 percent |
| 20 percent | up to €18,000 | up to €19,134 | 6.3 percent |
| 30 percent | up to €31,000 | up to €32,075 | 3.47 percent |
| 41 percent | up to €60,000 | up to €62,080 | 3.47 percent |
| 48 percent | up to €90,000 | up to €93,120 | 3.47 percent |
| 50 percent | from €90,000 | from €93,120 | 3.47 percent |
| 55 percent | from €1 million | from €1 million | - |
Electricity price brake
Austria's electricity price brake has been in force since December 1st, but its effects will be felt mainly in 2023 - and the price cap should be in place until June 30th 2024.
The price of electricity will be subsidised up to a consumption of 2,900 kilowatt hours, the government said. Until that limit, it will cost only ten cents per kilowatt hour – the energy price from before the current energy crisis.
Above that consumption limit, people will have to pay market prices for what they consume.
The Austrian government estimates that the measure will help Austrian homes save from €400 to €800 on energy bills a year. The Finance Ministry added that the average household’s savings would be €500.
READ MORE: How could Austria’s new electricity price brake benefit you?
Heating allowance
The heating cost subsidy was announced by the federal government in December and is intended to relieve households of between €200 and €400 per year as a one-off payment, as The Local reported.
The heating subsidy is intended for lower-income families, minimum pensioners and welfare recipients. It will be available whether they heat with gas, electricity, pellets or another fuel.
As provinces will distribute the grant, the Ministers did not give further details on income criteria, nor did they provide an estimate of the payment date.
READ ALSO: Austria to offer extra €400 for heating costs to low-income households
Other payments and aid
There are several other one-off payments and aid, and the government should also announce new changes in 2023.
Starting in early January, for example, a new "grid cost subsidy" pays €200 per year to low-income households - such as those who are exempt from the broadcasting fees (GIS).
Additionally, Austrian provinces, including Vienna, have announced local measures, including one-off payments and allowances, especially looking to cushion rising energy prices.
READ ALSO: EXPLAINED: How to keep energy bills down in Austria
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