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Many employees in Austria will receive their Christmas bonus in November, but the amount that actually reaches their bank account depends on several tax rules. Christmas and holiday bonuses benefit from special tax treatment, and new thresholds apply in 2026, making these extra payments more attractive than regular monthly salaries for many workers.
In Austria, holiday pay (“Urlaubsgeld”) and Christmas bonuses (“Weihnachtsgeld”) are classified as special payments. Unlike regular wages, these payments are taxed at reduced rates. The first €620 of annual special payments remains exempt from payroll tax. This tax-free allowance applies to both bonuses combined and is usually already used when holiday pay is paid out during the summer.
Any special payments above that amount are generally taxed at a reduced rate of 6%, provided they remain within the so-called “Jahressechstel” limit. For larger bonuses, tax rates gradually increase to 27% and 35.75%.
A key change came into effect on January 1, 2026. The tax-free threshold linked to the Jahressechstel was raised from €2,570 to €2,615. If an employee’s Jahressechstel does not exceed this amount, no payroll tax is charged on the special payments. Social security contributions, however, still apply.
The Jahressechstel is roughly equivalent to two average monthly salaries. Employees receiving 14 equal salary payments per year can therefore expect tax-free special payments if their monthly gross salary is around €1,307 or less. However, eligibility depends on actual earnings and special payments received during the year.
Calculations published by Austrian finance portal Finanz.at illustrate how the tax advantage works in practice. An employee earning a gross monthly salary of €3,500 receives approximately €2,461 net from a normal monthly paycheck. A Christmas bonus of the same gross amount would result in roughly €2,712 net, providing an additional €251 compared to a standard salary payment.
The difference becomes even more significant at higher income levels. Employees with a gross monthly salary of €5,000 can expect a net Christmas bonus of approximately €3,874, around €658 more than their regular monthly net salary. For those earning €2,500 gross per month, the advantage amounts to around €55.
However, the benefit is not universal. At a monthly gross salary of €2,000, calculations indicate that a Christmas bonus would leave approximately €1,605 net, slightly less than the monthly net salary.
The same tax framework applies to holiday pay, which is typically paid out in June or July. Since holiday and Christmas bonuses are treated together for tax purposes, employees who have already used the €620 tax-free allowance through their holiday pay cannot claim it again when receiving their Christmas bonus.
Austria does not provide a general legal entitlement to holiday or Christmas bonuses. Instead, these payments are usually regulated through collective bargaining agreements or employment contracts. According to the Austrian Trade Union Federation (ÖGB), around 98% of employees are covered by such arrangements. Workers who join a company during the year generally receive these bonuses on a pro-rata basis.
Payment dates also vary by sector and employer. Holiday pay is commonly transferred before the summer vacation season, while Christmas bonuses are usually paid at the end of November or the beginning of December. The final amount employees receive depends not only on their gross salary but also on their Jahressechstel and any special payments already received during the year.
- source: heute.at/picture: canva.com
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