Taxes, benefits and price increases: the money changes in Austria in 2024
The new year has plenty of changes affecting Austrian pockets, with some things set to become more expensive, but some salaries and benefits also rising
The new year brings a number of significant changes to people in Austria, with new tax rules, benefit adjustments and price increases set to impact finances.
Here's what you need to know.
Salary increases in Austria
Salaries in the public sector rose by 9.15 percent on January 1st, but by at least €192. For the lowest salaries, this means an increase of 9.71 percent. Bonuses and allowances will also be increased by 9.15 percent. There are 227,799 people (federal employees and state teachers) directly affected, and indirectly affected are 317,273 employees of the states and municipalities are expected to adopt the federal agreement.
The metal technology industry employees can expect an average gross increase in wages and salaries of 8.6 percent. Lower earners will receive a ten percent increase due to a staggered increase. The agreement is valid for two years, with one percent added to rolling inflation in the second year.
READ ALSO: KEY POINTS: What changes about life in Austria in 2024?
Pensions will rise by 9.7 percent this year. Only high-income pensioners with salaries of €5,850 or more will have to make do with a fixed amount of € 568 per month.
Tax benefits and changes
Austria announced a significant tax reform in September 2023, and the effects will be valid from 2024, as The Local reported.
From 2024, there will be no more "cold progression, “ meaning that tax brackets will be adjusted based on inflation rates. Before, people were taxed on income based on the brackets (they were exempt for amounts below €11,000, for example). Now, the brackets will change to account for inflation.
So, the basic amount will be raised to €12,816, which means that anything below that point will be tax-free in Austria.
With the bracket increases, people will pay a 20 percent tax on any income between €12,816 and €20,818 per year.
Other tariff levels are increasing as well, though, by anywhere from around seven percent to close to ten percent.
READ ALSO: EXPLAINED: How Austria's income tax brackets change in 2024
Income between €20,819 and €34,513 will see a tax of 30 percent. Between €34,514 and €66,612 will be taxed at 40 percent. From €66,613 to €99,266, will see a 48 percent tax rate.
Any earnings above that ceiling will be taxed at 50 percent.
The deductibility of church contributions has been increased from €400 to €600. This is automatically taken into account in the annual employee tax assessment. In addition, donations to significantly more associations and corporations will be tax-deductible than before.
Child allowances – which provide tax relief to lower-income families – will be raised from €550 to €700 per year.
Childcare subsidies from employers – for example, if the employer provides a daycare – are currently taxed in Austria, although the first €1,000 comes tax-free. The government plans to up this to €2,000.
The government’s tax reform plan will also see deduction amounts automatically adjusted to 100 percent of the inflation amount instead of the current two-thirds. This means that tax credits people can claim on their yearly returns – such as the single earner, single parent, dependent tax deductions, and transport and pensioner tax credits – will rise with inflation.
Gas, fuel, and several fees becoming more expensive
Several fees are being raised with inflation. The e-card service fee, for example, is going from €12.95 to €13.80 per year. From January 1st, every Austrian household will have to pay the ORF fee, which costs at least €15.30 per month (or €183.60 per year).
READ ALSO: Everything you need to know about Austria's new ORF/GIS TV fee
As Germany tries to ensure the security of the natural gas supply - with basic filling level requirements, prices for its neighbours are rising, including for Austria, according to a Die Presse report.
From 2024, the gas storage levy charged by Germany will rise from the current € 1.45 to € 1.86 per megawatt hour, which will make natural gas in Austria around five percent more expensive than it needs to be, E-Control CEO Alfons Haber told the newspaper.
The domestic energy regulator sharply criticised the German levy and called on domestic politicians to "promptly have the EU Commission and the European Court of Justice review" whether the measure complies with EU law.
Austria's climate tax on fossil fuels, introduced in October 2022, has also become more expensive - increasing by 3.7 cents to 13.5 cents per litre of diesel and by 3.4 cents to 12.3 cents per litre of petrol as the year turned. The good news is that this means the Klimabonus payments, which were created to offset this tax, should also be raised as well.
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The new year brings a number of significant changes to people in Austria, with new tax rules, benefit adjustments and price increases set to impact finances.
Here's what you need to know.
Salary increases in Austria
Salaries in the public sector rose by 9.15 percent on January 1st, but by at least €192. For the lowest salaries, this means an increase of 9.71 percent. Bonuses and allowances will also be increased by 9.15 percent. There are 227,799 people (federal employees and state teachers) directly affected, and indirectly affected are 317,273 employees of the states and municipalities are expected to adopt the federal agreement.
The metal technology industry employees can expect an average gross increase in wages and salaries of 8.6 percent. Lower earners will receive a ten percent increase due to a staggered increase. The agreement is valid for two years, with one percent added to rolling inflation in the second year.
READ ALSO: KEY POINTS: What changes about life in Austria in 2024?
Pensions will rise by 9.7 percent this year. Only high-income pensioners with salaries of €5,850 or more will have to make do with a fixed amount of € 568 per month.
Tax benefits and changes
Austria announced a significant tax reform in September 2023, and the effects will be valid from 2024, as The Local reported.
From 2024, there will be no more "cold progression, “ meaning that tax brackets will be adjusted based on inflation rates. Before, people were taxed on income based on the brackets (they were exempt for amounts below €11,000, for example). Now, the brackets will change to account for inflation.
So, the basic amount will be raised to €12,816, which means that anything below that point will be tax-free in Austria.
With the bracket increases, people will pay a 20 percent tax on any income between €12,816 and €20,818 per year.
Other tariff levels are increasing as well, though, by anywhere from around seven percent to close to ten percent.
READ ALSO: EXPLAINED: How Austria's income tax brackets change in 2024
Income between €20,819 and €34,513 will see a tax of 30 percent. Between €34,514 and €66,612 will be taxed at 40 percent. From €66,613 to €99,266, will see a 48 percent tax rate.
Any earnings above that ceiling will be taxed at 50 percent.
The deductibility of church contributions has been increased from €400 to €600. This is automatically taken into account in the annual employee tax assessment. In addition, donations to significantly more associations and corporations will be tax-deductible than before.
Child allowances – which provide tax relief to lower-income families – will be raised from €550 to €700 per year.
Childcare subsidies from employers – for example, if the employer provides a daycare – are currently taxed in Austria, although the first €1,000 comes tax-free. The government plans to up this to €2,000.
The government’s tax reform plan will also see deduction amounts automatically adjusted to 100 percent of the inflation amount instead of the current two-thirds. This means that tax credits people can claim on their yearly returns – such as the single earner, single parent, dependent tax deductions, and transport and pensioner tax credits – will rise with inflation.
Gas, fuel, and several fees becoming more expensive
Several fees are being raised with inflation. The e-card service fee, for example, is going from €12.95 to €13.80 per year. From January 1st, every Austrian household will have to pay the ORF fee, which costs at least €15.30 per month (or €183.60 per year).
READ ALSO: Everything you need to know about Austria's new ORF/GIS TV fee
As Germany tries to ensure the security of the natural gas supply - with basic filling level requirements, prices for its neighbours are rising, including for Austria, according to a Die Presse report.
From 2024, the gas storage levy charged by Germany will rise from the current € 1.45 to € 1.86 per megawatt hour, which will make natural gas in Austria around five percent more expensive than it needs to be, E-Control CEO Alfons Haber told the newspaper.
The domestic energy regulator sharply criticised the German levy and called on domestic politicians to "promptly have the EU Commission and the European Court of Justice review" whether the measure complies with EU law.
Austria's climate tax on fossil fuels, introduced in October 2022, has also become more expensive - increasing by 3.7 cents to 13.5 cents per litre of diesel and by 3.4 cents to 12.3 cents per litre of petrol as the year turned. The good news is that this means the Klimabonus payments, which were created to offset this tax, should also be raised as well.
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