Austria Tax Changes 2027: What the Budget Law Means for Your Pay
The Budgetbegleitgesetz 2027-2028 is law: low earners lose the unemployment contribution discount, home-office allowances go and the social security cap rises faster. The new tax brackets are still to come.
Main change for 2027
Employee unemployment insurance contribution, whatever the salary
Austria 2026 vs 2027
| Parameter | 2026 | 2027 | Status |
|---|---|---|---|
| Tax bracket thresholds (20 / 30 / 40 / 48 / 50 / 55%) | €13,539 / €21,992 / €36,458 / €70,365 / €104,859 / €1m | Indexed by 2/3 of inflation; not published | Pending |
| Verkehrsabsetzbetrag (employee tax credit) | €496 | Indexed; not published | Pending |
| Unemployment contribution, new jobs on low pay | 0% / 1% / 2% by income band | <strong>2.95%</strong> | Adopted |
| Unemployment contribution, jobs existing on 31 Dec 2026 | 0% / 1% / 2% | 0.5% / 1.5% / 2.5% | Adopted |
| Telearbeitspauschale (employer home-office allowance) | Tax-free up to €3/day, max €300/yr | <strong>Abolished</strong> | Adopted |
| Arbeitsplatzpauschale (self-employed home office) | €300 or €1,200 flat | Abolished | Adopted (fiscal years from 2027) |
| Höchstbeitragsgrundlage (contribution cap) | €231/day = €6,930/month | €231 × 2027 revaluation factor <strong>+ €5/day</strong> | Formula adopted; amount pending |
| Employee social security rate | 18.07% (special payments 17.07%) | No change found | — |
| Kinderabsetzbetrag and Familienbeihilfe indexation | Frozen | Frozen through 2028 | Adopted |
Pending amounts depend on 2026 inflation or the 2027 Aufwertungszahl (revaluation factor); ÖGK usually lists the 2027 social security values in November or December.
What the unemployment change costs: example
€2,300 gross a month paid 14 times (€32,200 a year), assuming this pay fell in the 1% band in 2026
Before income tax: contributions reduce taxable income, so roughly 20–30% comes back. ÖGK and AMS publish the 2027 bands in December.
Employees
Low earners lose the contribution discount
AMPFG § 2a (unemployment insurance contributions act) let low earners pay 0%, 1% or 2% instead of 2.95%. It is repealed at the end of 2026, so a job that starts in 2027 pays the full rate from the first payslip. Existing contracts phase in by 0.5 points a year; the lowest band reaches 2.95% only in 2032. Apprentices pay at most 1.15%.
Home office: the allowance ends
Employers can no longer pay up to €3 a day (max €300 a year) free of tax and contributions, and you can no longer claim the shortfall as Werbungskosten (work expenses). If the employer keeps paying €300, it becomes ordinary pay: at a 40% marginal rate, about €150 of it goes to contributions and tax. Ergonomic furniture stays deductible up to €300 a year, now without the 26 home-office days.
Higher earners: a faster-rising cap
On top of indexation, the cap rises by €5 a day, about €150 a month. Above the cap, that step alone costs about €376 a year: €1,800 of monthly pay at 18.07% plus €300 of special payments (13th and 14th salary) at 17.07%.
Self-employed
No more flat home-office deduction
The Arbeitsplatzpauschale (€300 or €1,200 a year) goes for fiscal years starting after 31 December 2026. After that, only ergonomic furniture is deductible, up to €300 a year.
Families, expats and relocants
What matters if you move to Austria
A first job after a move is often part-time or modestly paid. If it starts in 2027, it pays the full 2.95% from day one.
The Kinderabsetzbetrag (child tax credit) and Familienbeihilfe (family allowance) stay frozen through 2028 and lose value with inflation.
Familienbonus Plus for a child aged 4 or over can be split 75/25 or 50/50; 100/0 stays possible only while a child under 4 lives in the household.
We found no change to the Zuzugsbegünstigung, the relief for researchers and experts moving to Austria.
2026 income still uses 2026 rules
FAQ
What changes in Austrian taxes in 2027?
Under BGBl. I Nr. 62/2026, the reduced unemployment contribution for low earners ends, home-office allowances are abolished and the social security cap rises by an extra €5 a day. Child benefits (Kinderabsetzbetrag, Familienbeihilfe) stay frozen through 2028. The 2027 brackets are pending.
Will I pay more unemployment insurance in 2027?
Only if your pay qualified for the 0%, 1% or 2% rate. A new job pays 2.95%; an existing contract pays 0.5%, 1.5% or 2.5% in 2027. On €32,200 a year, moving from 1% to 2.95% costs about €628 before the tax offset.
When will the 2027 tax brackets be published?
Not by 15 October 2026. By law (§ 33 Abs. 1a EStG), thresholds rise by two-thirds of the August 2025–July 2026 inflation rate; the remaining third is decided separately, usually in the autumn. Expect figures between late October and December.
Can I still get a tax-free home-office allowance in 2027?
No. The Telearbeitspauschale ends for pay periods after 31 December 2026. Only ergonomic furniture stays deductible, up to €300 a year.
