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In Austria, employees traditionally receive their Christmas bonus in November, often referred to as the “13th month’s salary.” This special payment is transferred together with the regular wage, and in times of high inflation, it feels more like a “double salary” for many households.
Higher Bonuses Thanks to Tax Changes
This year, some workers will see larger bonuses due to adjustments in taxation and exemption thresholds. Net earnings have also risen in 2025, following the partial abolition of bracket creep earlier in the year.
How the Bonus Is Calculated
Christmas and vacation bonuses—known as the 13th and 14th salaries—are calculated differently from standard monthly pay:
- Lower social security contributions: 1% less than for regular wages.
- Taxation method: Income tax on special payments is based on one-sixth of annual income.
- Allowance: Special payments up to €620 remain tax-free. Beyond that, tax rates apply at 6%, 27%, or 35.75%, depending on the income bracket.
Employees who change jobs or start new employment during the year are entitled to a pro-rata bonus.
New Exemption Limits
The exemption threshold has been steadily rising:
- Until 2023: €2,100
- Retroactively in 2024: €2,447
- From 2025 onward: €2,570
This means that if one-sixth of annual income falls below €2,570, the Christmas bonus is tax-free. For amounts above this, a 6% tax applies on the portion exceeding €620, and no more than 30% on amounts above €2,330 (previously €2,000).
- Hector Pascua with reports from finanz.at/picture: pixabay.com
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