Austria's 13th and 14th Month Salary: The Tax Advantage Explained

If you're moving to Austria, you'll hear about "14 salaries per year." It's not marketing — Austrian employees genuinely receive two extra monthly salaries (called Urlaubsgeld and Weihnachtsgeld), and these bonus payments are taxed at a flat 6% instead of your normal income tax rate. It's one of Austria's best-kept tax advantages.

How it works

Your annual gross salary (Jahresbrutto) is divided into 14 payments, not 12:

• 12 regular monthly salaries — taxed at normal progressive rates (20-55%)
• 13th salary (Urlaubsgeld) — holiday bonus, typically paid in June, taxed at flat 6%
• 14th salary (Weihnachtsgeld) — Christmas bonus, typically paid in November, taxed at flat 6%

The first €620 of the combined bonus is completely tax-free. After that, it's a flat 6% — regardless of your income level. Social insurance still applies to the bonus payments, but at a slightly higher rate (18.07% vs 18.07% for regular pay, with a higher cap).

How much does the 6% rate save you?

On a €42,000 salary, the 13th/14th month structure saves you roughly €1,800 per year compared to what you'd pay if the same income were taxed at normal rates. That's an extra €150/month in your pocket.

Frequently asked questions

Does every employer pay 14 salaries?

Yes, in practice. The 13th and 14th month payments are mandated by collective bargaining agreements (Kollektivverträge) that cover nearly all employees in Austria. It's not optional — it's a fundamental part of the Austrian employment system.

Can I negotiate for 12 higher payments instead?

You wouldn't want to. The 14-payment structure is specifically designed for the tax advantage. If you compressed everything into 12 payments, you'd lose the 6% flat rate on the bonus portions and pay significantly more tax overall.

How does this compare to Germany?

Germany has no equivalent. Some German employers pay a "13th salary" or Christmas bonus, but it's taxed at your normal marginal rate. Austria's 6% flat rate on bonuses is a genuine structural advantage — it's one reason why Austrian net salaries can be competitive with German ones despite similar gross levels.