How Austria taxes a retirement plan

We model these and we know we do not get them exactly right. Where the size could be measured, it is stated.

• A Pensionskasse pension is taxed according to who paid in. The part from your employer's contributions is taxed in full, only a quarter of the part from your own contributions is taxed, and the part from contributions that drew the state premium is tax free. We tax the whole pension as if your employer had paid for all of it, so where you paid in yourself the tax we show is too high. On a 13,160 pension paid wholly from your own money beside a 21,000 state pension, that is about 3,800 a year too much.

  Your real tax is lower/up to €3,835 a year/anyone with a Pensionskasse pension built partly from their own contributions

• The pensioner tax credit shrinks only as your pension income rises. Income from a privately bought annuity should not shrink it, but in our model it does, so for a pensioner inside that range the tax we show on the annuity is too high. Beside a 30,000 state pension it is about 250 a year too much, and never more than the 1,020 credit itself. The reverse also happens: if you have such an annuity but no pension at all, our model still gives you the credit, so the tax we show is too low by up to 1,020.

  Could go either way/up to €1,020 a year/anyone with a private annuity beside a pension in the credit's taper range

• Austria charges 25 percent on bank deposit interest and 27.5 percent on everything else, including bond interest. We carry bonds and cash together and charge both at 27.5, because bonds dominate, so interest on cash is overtaxed by 2.5 points of its yield. On a 750,000 portfolio that is about 23 a year at a realistic cash weight, and 469 if you held the whole thing in deposits.

  Your real tax is lower/up to €469 a year/anyone holding cash or bank deposits in an Austrian taxable account

• An Austrian fund holder is taxed each year on 60 percent of the gains the fund itself makes inside the wrapper, on top of its interest and dividends. We can only see the income we model, so that part is missing and you are priced as though you held the shares directly rather than through a fund. It runs at about 0.02 percent of what you hold each year, which is 148 a year on a 750,000 portfolio.

  Your real tax is higher/up to €297 a year/anyone holding funds rather than shares directly in an Austrian taxable account

• Austria lifts its tax bands with prices automatically, but only by two thirds of measured inflation, and we lift them by all of it. So the bands in our model drift above the real ones and the gap compounds: over 30 years it is worth about 17.8 percent of the bands' value at 2 percent inflation, and 25.5 percent at 3 percent. Every Austrian tax figure in the later years of a long plan is too low for that reason.

  Your real tax is higher/anyone whose Austrian plan runs for decades, because the gap compounds every year

• We tax an Austrian couple as two separate people, as the law does, each on their own pension and their share of your savings. The higher pensioner credit for someone whose partner has almost no income is not applied, so for such a couple we show a little more tax than you pay.

  Your real tax is lower/couples where one partner has much less income than the other

• A pension paid directly by a former employer is taxed like wages. We also take the 6 percent health contribution from it, which the law most likely does not charge on such a pension, so the amount we show may be too high by 6 percent of that pension. We have not confirmed this from a primary source.

  Your real tax is lower/anyone receiving a pension paid directly by a former employer

• An annuity from a supplementary pension policy is tax free only for the part paid for with contributions that drew the state premium. The rest is taxed once you have received back what you paid. Our type for this policy treats all of it as tax free, so if you did not claim the premium on every contribution, enter that part as a separate privately bought annuity or the tax we show will be too low.

  Your real tax is higher/anyone with a supplementary pension policy where the state premium was not claimed on every contribution

• Growth in a life insurance policy is free of income tax unless you paid for it with one single premium and agreed a term under 15 years, or under 10 if everyone named on it was 50 or older when it was signed. Surrendering a single-premium policy early costs 7 percent of what you paid in. What we simplify: a part surrender pays that 7 percent on the share of what you paid in that it takes out, and we do not look at regular premiums that stopped early, which the law can treat like a single one.

  Could go either way/someone holding a single-premium life insurance policy, or drawing part of one inside its first 15 years

• A Zukunftsvorsorge cannot be touched for ten years from the first payment in. Taken out as cash after that, half of the state premium it received is paid back and its growth is taxed at 27.5 percent; taken as a pension, nothing is taxed, so enter that with your pensions instead. What we simplify: we take the state premium as 4.25 percent of every payment in, the rate for 2026, though it was higher in some earlier years. If you were 50 or older when you signed and chose to wait until your pension instead of ten years, we do not model that choice.

  Your real tax is higher/someone cashing in an older Zukunftsvorsorge

• A classic life insurance policy credits a guaranteed rate plus a profit share each year, decided by the insurer. We grow it at your portfolio's return instead, so for a classic policy the plan swings more than your policy will, and may show more growth than the insurer credits. A unit-linked policy grows with its funds, as we model it.

  Could go either way/anyone holding a classic, guaranteed-rate Austrian life insurance policy

These exist in law and we leave them out, usually because applying them would need a question we do not ask.

• A fund that does not report its income to Austria is taxed on an estimate instead, and the estimate has a floor: at least 2.75 percent of its year end value, every year, including years when it falls. We leave it out because it depends on the funds you happen to hold rather than on the country. On a 750,000 portfolio held entirely in such funds it is about 20,600 a year against the 8,400 we would show. If you hold funds in Austria, this is the one thing worth checking with your broker.

  Your real tax is higher/up to €20,625 a year/anyone holding funds that do not report to Austria, typically funds based in the United States held at a broker outside Austria

• Shares and fund units bought before 2011, and bonds bought before April 2012, are free of tax when you sell them in Austria, as long as you own less than 1 percent of the company. We tax every sale at 27.5 percent, so if you still hold investments that old we show too much tax when you sell them.

  Your real tax is lower/up to €2,750 a year/anyone selling investments they have held since before 2011, or bonds since before April 2012

• Investment income in Austria is taxed at a flat rate, but you can ask for the ordinary scale instead, and the tax office grants it only where it comes out cheaper for you. We always charge the flat rate. The choice can only pay while your pension is low: it is worth nothing above a gross pension of roughly 27,300, and up to about 1,300 a year below that.

  Your real tax is lower/up to €1,296 a year/anyone with Austrian investment income and a gross pension below about 27,300

• Austria gives a credit to a sole earner or a single parent supporting a child, 612 or 828 a year, plus 273 for each further child. It turns on having a dependent child and on what your partner earns, and we ask about neither, so the tax we show is too high for anyone entitled to it.

  Your real tax is lower/up to €828 a year/retirees supporting a dependent child, either as a couple on one income or alone

• If your income tax comes out below zero, Austria refunds 80 percent of the compulsory contributions taken from your pension, up to 723 a year. Our credits can only reduce tax to nil, never turn into a payment, so that refund never appears. On a 15,000 pension it is worth 720 a year you would actually receive.

  Your real tax is lower/up to €720 a year/a pensioner whose pension is small enough to pay no income tax

• An annuity bought with your severance fund money is tax free, but if you later cash it in as one sum, 6 percent tax is due on that sum. We cannot model cashing in a pension, so that charge does not appear. On a 12,000 sum it is 720.

  Could go either way/up to €720 once/anyone who turned a severance fund balance into an annuity

• A pensioner whose partner has almost no income of their own gets a larger version of the pensioner credit, 1,502 a year instead of 1,020. We never ask what your partner earns, so we always give the smaller one and the tax we show is too high, by up to 482 a year.

  Your real tax is lower/up to €482 a year/a retired couple where one partner has almost no income of their own

• Austrian councils charge a yearly property tax, but on values last set in 1973, so a family home pays roughly 100 to 400 a year. We do not charge it. Buying property carries its own taxes and a registration fee on top, and those only bite in the year you buy.

  Your real tax is higher/up to €400 a year/anyone who owns an Austrian home, and anyone planning to buy one

• A pensioner with a little income from outside the pension gets the first 730 of it free of tax, tapering away to nothing at 1,460. It does not reach investment income, so for a retiree it is really a rent allowance. We do not apply it, so if you have a small amount of Austrian rental income the tax we show is slightly too high.

  Your real tax is lower/a pensioner with a small amount of Austrian rental income

• A small Pensionskasse entitlement, worth at most 16,500 in 2026, can be paid out as one sum taxed at half your average rate. We cannot model taking a pension as a lump, so this option does not appear.

  Could go either way/anyone with a small Pensionskasse entitlement who would take it as a lump

• If you paid voluntary top-up contributions into the state pension, only a quarter of the extra pension they buy is taxed. We tax all of it as part of your state pension, so the tax we show is too high.

  Your real tax is lower/anyone who made voluntary top-up payments into the Austrian state pension

Separate tax systems, or rules that only bite outside a retirement plan.

• Selling Austrian property carries a 30 percent charge on the gain, with reliefs if it was your main home or you built it yourself. For property bought long ago the charge can instead be worked out from an assumed cost, coming to 4.2 percent of the sale price. We do not tax a property sale, so none of this reaches your plan.

  Could go either way/anyone planning to sell Austrian property that is not their main home

• Members of a recognised church in Austria pay a contribution of about 1.1 percent of their income, of which up to 600 a year is deductible. It is a private membership fee rather than a tax, it is not taken from your pension at source, and you can end it by leaving the church, so no figure here includes it.

  Your real tax is higher/members of a recognised Austrian church