More money from January 2023 – what you need to know now

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It is a prestige project of the present Austrian government: the abolition of the “cold progression.” Taxpayers will already feel it in their January pay slips.

“A historical package for the Republic”: this is how euphorically Finance Minister Brunner announced the abolition of “cold progression,” i.e. the creeping tax increase.

The details:

Higher initial tax rate: Previously, no taxes were paid on incomes up to 11,000 euros. Starting from 1 January 2023, payments starting from 19,693 euros are taxable.

New tax brackets: The limits for the other tax brackets are also changing:

➤20 percent tax rate applies to 19,134 euros (previously: 18,000 euros).

➤ 30 percent applies to 32,075 euros (previously: 31,000 euros).

This is what will change for pensioners from 2023
➤41 percent applies to 62,080 euros (previously: 60,000 euros).

➤ 48 percent applies to 93,120 euros (previously: 90,000 euros).

➤ From 93,120 euros, you pay a total of 50 percent tax.

What does this mean on the pay slip?

With a monthly income of 1,500 euros gross, you pay 139 euros less tax per year.

■ At 2,000 euros, this is already a saving of 500 euros.

■ At 3,000 euros, that’s 534 euros.

■ At 4,000 euros, you save around 776 euros.

■ At 5,000 euros, 875 euros.

Increase automatically: In the future, the thresholds of all tax brackets will be increased automatically in line with the inflation rate. This means that there will be more net income in the long term.

Pensioners also benefit: The tax bracket adjustment applies to people no longer employed.

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