As part of budget consolidation, the new federal government plans cuts in the abolition of cold progression. Some of the previous reliefs will be eliminated in the future, which will significantly affect incomes and salaries from the coming year.

Effects on Net Income

Since the beginning of 2025, many people in Austria receive less net income despite the abolition of cold progression. This particularly affects individuals with a monthly gross income of 6,300 euros or more, provided their gross salary has not been increased compared to 2024. The reason for this is the high adjustment factor of 1.063, which leads to a significant increase in social security contributions.

New Maximum Contribution Bases

Since January 2025, the monthly maximum contribution base is 6,450 euros, and the annual one is 90,300 euros. For special payments, the annual maximum contribution base has been raised to 12,900 euros.

Elimination of the Variable Third

In the abolition of cold progression, two-thirds of the relief was previously applied automatically to all levels, while one-third could be allocated flexibly. This variable third is now to be eliminated, which will reduce the annual tax relief for all Austrians from 2026.

According to calculations by Agenda Austria, this partial reintroduction of cold progression could cost employees up to 360 million euros per year. For a median income of 2,560 euros gross per month, this means about 47 euros less net per year.

(Red)

This article has been automatically translated, read the original article here.