From 2026 Less Net from Gross: Government Cuts Tax Relief

As part of the savings package for budget consolidation, the abolition of cold progression will no longer be fully implemented. A corresponding legislative amendment has been under review since Friday. This change will have significant impacts on income and salaries starting next year.

New savings package results in less net income

Since the beginning of 2025, many people in Austria have been receiving less net income despite the abolition of cold progression, as reported by Finanz.at. Particularly affected are individuals with a monthly gross income of 6,300 euros or more, provided their gross salary remained unchanged compared to 2024. The reason for this is the increased adjustment factor of 1.063, which leads to a rise in the maximum contribution bases for social insurance.

Since January, the monthly maximum contribution base is 6,450 euros (daily 215 euros), while the annual maximum contribution base reaches 90,300 euros. The annual maximum contribution base for special payments will be set at 12,900 euros in the future, compared to the previous 12,120 euros.

Planned changes from 2026

The variable third of the relief will be eliminated in the future. According to calculations by Agenda Austria, this could cost employees up to 360 million euros per year. For a median income of 2,560 euros gross monthly, this means about 47 euros less net per year.

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