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An Austrian pension is taxed in full as income from employment, on the same tariff as pay, and the pension insurer withholds the tax before the money reaches the account. A pensioner credit softens the bill, and the two extra payments in April and October get fixed low rates. For a hypothetical retiree with a single state pension, that usually settles the tax with no return; a second pension from a different payer is where it stops being automatic.
This covers people who are tax resident in Austria and draw a pension paid through Austrian payroll, and the rules are the same in every state.
The state pension counts as income from employment. The pension insurer plays the employer, and wage tax (Lohnsteuer) comes off each payment the way it comes off a salary. Readers who expect a pension to be tax-free, or taxed only in part, will find it counts in full here, with a few narrow exceptions covered below.
How the payer taxes a pension
Three insurers pay Austria’s state pensions, according to the social affairs ministry’s page on pension insurance (in German): the PVA (Pensionsversicherungsanstalt, the pension insurer for employees), the SVS (the insurer for the self-employed and farmers) and the BVAEB (the insurer for public servants, railways and mining). Civil-service pensions and pensions from domestic pension funds (Pensionskassen) have payers of their own. In tax terms each is a paying body (pensionsauszahlende Stelle).
The government’s page on taxing pensions (in German) says statutory and civil-service pensions are income from employment, so the paying body withholds wage tax on every regular payment. The pension insurer’s page on pension tax (in German) gives the method. The base is the year’s regular gross pensions without the special payments, less the health contribution and any allowance the tax office has notified, run through the same tariff as pay.
That tariff is the one in the article on how Austria’s income tax brackets work. For the 2026 tax year the first EUR 13,539 of annual income is taxed at nothing, the slice up to EUR 21,992 at 20 %, and the slice after that, up to EUR 36,458, at 30 %. The credits in the next sections come off the resulting tax.
Month by month, the payer in effect withholds a twelfth of the tax on a full year at that pension (an editorial reading of how the pension insurer describes it). In February the PVA sends the year’s wage statement (Lohnzettel) to the tax office automatically.
For a pensioner with one pension the tax office then already holds what it needs, and the same PVA page says the employee assessment (Arbeitnehmerveranlagung) follows either on application or automatically. The article on the assessment covers the refund route.
Not every payment from the insurer is taxable income. The PVA’s page sorts them:
| Payment | Tax treatment |
|---|---|
| Old-age and other state pensions | Taxable, withheld by the payer |
| The extra payments in April and October | Taxable at fixed rates within limits, see below |
| Ausgleichszulage (minimum-pension top-up) | Taxable; the part resting on child increases is tax-free |
| Kinderzuschuss (child supplement) | Taxable |
| Pflegegeld (care allowance) | Tax-free |
| Increment from voluntary higher insurance (Höherversicherung) | Only counts, as a rule |
The last row is the one exception to “taxed in full”. The PVA adds that the extra increment paid for working next to an old-age pension counts in full. A pension topped up to the minimum rate leaves little or no wage tax in practice, because the pensioner credit below covers the small tariff amount (an editorial reading); the article on the Ausgleichszulage covers the top-up itself.
Health contribution
The insurer also deducts a health insurance contribution (Krankenversicherungsbeitrag) of 6 % of the gross pension. The text of the law on RIS (in German), in the version in force since 1 June 2025, sets that rate and extends it to the child supplements, the Ausgleichszulage and the top-up bonuses, though not to orphans’ pensions.
The contribution is deducted before tax is worked out, so it lowers the taxable pension. The government page defines the pension that matters for the credit as the gross pension minus compulsory social insurance contributions. The law ties the deduction to living permanently in Austria, with an extension for some agreement states, so a pension paid to someone who has left is a different case.
Pensioner credits
A Pensionistenabsetzbetrag (pensioner tax credit) comes off the tax itself, not off the income. The pension payer applies the standard credit automatically, according to the finance ministry’s overview of tax credits (in German). It shrinks evenly to nothing as the taxable pension rises through a band:
| Credit | Standard | Increased |
|---|---|---|
| Maximum per year | EUR 1,020 | EUR 1,502 |
| Paid in full up to | EUR 21,614 | EUR 24,616 |
| Gone at | EUR 31,494 | EUR 31,494 |
The band is measured on the taxable regular pension income, so the April and October payments stay out of it. The income tax act counts a company pension or a pension-fund pension from a former job as pension income alongside the state pension, and it leaves anyone who gets the pensioner credit without the flat allowance for work expenses (Werbungskostenpauschale) that employees get automatically.
The increased credit needs a partner. The pensioner must have been married or in a registered partnership for more than six months of the year without living permanently apart, the partner’s income can’t pass EUR 2,720 a year, and the pensioner can’t be getting the sole-earner credit.
Unlike the standard credit it isn’t automatic: it is applied for on form E 30 at the paying body, and the ministry’s page adds that it should be entered in the assessment too, because otherwise an unintended back-taxation follows. The article on tax credits covers how the credits order and what the 2027 indexation changes.
Where the credit is larger than the tax, a low pension gets some money back. The PVA says a pensioner who pays no wage tax because the pension is low can recover 80% of the social insurance contributions through the assessment, up to EUR 723 a year.
Other reliefs run through the same E 30. The pension insurer’s leaflet on pension tax (in German) says the child tax credit Familienbonus Plus can be applied monthly by the paying body, and the PVA names the sole-earner and single-parent credits as E 30 items too. The article on Familienbonus Plus covers the credit and the split rule that starts in 2027.
Allowances for church contributions and similar special expenses reach the monthly tax only if the tax office has issued an advance allowance notice (Freibetragsbescheid) with a Mitteilung zur Vorlage (note to hand to the payer). Otherwise they are claimed afterwards in the assessment, according to the PVA. The church contribution itself (Kirchenbeitrag) is billed by the church, not withheld from the pension; the article on the Kirchenbeitrag covers it.
April and October payments
Austrian pensions are paid 14 times a year. The PVA’s page on pension special payments (in German) says the 13th and 14th come with the April and October pensions, are paid automatically and normally equal that month’s gross pension, Ausgleichszulage included. The health contribution comes off them at the same rate.
For tax they get the treatment employees’ 13th and 14th salary get. After the contribution, the first EUR 620 a year is tax-free, and the rest is taxed at 6 % inside the Jahressechstel (annual sixth), which the PVA defines as the average gross monthly pension of the calendar year times two. If the sixth is no more than EUR 2,615, no tax is taken at all.
Anything above the sixth is taxed with the regular pension on the tariff. The government page says the same: the April and October payments are taxed after the health contribution, like bonuses for working employees.
For a steady pension the sixth equals the two extra payments exactly, so all of them get the fixed rate (an editorial reading of the PVA’s sixth formula). The article on the 13th and 14th salary explains the year-end check and the phase-in rule for low sixths.
A pension that starts partway through the year changes the first extra payment. The PVA looks at the payment month and the five before it and cuts the payment by a sixth for each month without pension entitlement. A pension starting on 1 February 2026 therefore pays half of the April payment, in the PVA’s own example.
A pension worked through
The example puts the contribution, the tariff, the credit and the extra payments together for one described retiree, and then adds a second pension.
Illustration
A hypothetical single retiree, tax resident in Austria all year, draws one PVA pension and nothing else for the tax year.
Assumptions: the pension is EUR 1,750 gross a month in 14 payments, which means 12 regular payments plus the April and October payments. There’s no Ausgleichszulage, partner, child, allowance notice or other deduction, and the retiree isn’t a US person or international organisation staff.
The monthly figures are a twelfth of the annual calculation, so a real pension slip can differ slightly.
Contribution. The 12 regular payments come to EUR 21,000. At 6 % the contribution is EUR 1,260, which leaves EUR 19,740 as the taxable year.
Tariff. The first EUR 13,539 is tax-free. The other EUR 6,201 sits in the band that ends at EUR 21,992, so it is taxed at 20 %, which is EUR 1,240.20.
Credit. EUR 19,740 is below EUR 21,614, so the full EUR 1,020 comes off. Wage tax on the regular pension is EUR 220.20 a year, about EUR 18.35 a month.
April and October. The two payments are EUR 3,500 gross, the contribution takes EUR 210 and EUR 3,290 is left. The sixth is EUR 3,500, above the EUR 2,615 threshold for 2026, so the fixed rates apply. The first EUR 620 is tax-free and the remaining EUR 2,670 is taxed at 6 %, which is EUR 160.20.
Result. Wage tax comes to EUR 380.40 on EUR 24,500 gross, about 1.6%. After EUR 1,470 of contribution, the retiree keeps about EUR 22,649.60 a year, or EUR 1,626.65 in a regular month.
Where the tax starts. The credit wipes out the tax on a further EUR 5,100 above the free band (EUR 1,020 at 20 %), so wage tax on the regular payments begins at about EUR 18,639 of taxable pension. Before the contribution that is a gross pension of roughly EUR 1,652 a month in 14 payments. That is an editorial calculation from the pinned figures, not a threshold the sources state.
The pension in this example sits only slightly above that line, which is why the tax is small. Above it, each extra euro of taxable regular pension is taxed at 20 % within that band, and once the taxable pension passes the start of the credit’s band, the shrinking credit adds to the cost.
Several pensions and the assessment
Payers don’t see each other, and the tariff is progressive, so the question is whether one payer taxes everything together. The government page answers by pension type:
| Combination | Who taxes | What follows |
|---|---|---|
| Statutory, civil-service, state-employment and pension-fund pensions together | The payer of the highest one, jointly | The tax office has nothing to settle on this ground |
| A statutory pension and a company pension (Firmenpension) | Each payer separately | Assessment after the year ends |
The PVA’s leaflet adds that where the insurer itself pays a company pension, it can agree to tax it jointly with the former employer’s consent.
For a hypothetical retiree with a PVA pension and a pension-fund pension, nothing is left to settle. With a company pension paid by a former employer, the year-end assessment does the joining. A pension next to pay is a separate case, covered in the article on two jobs.
Without joint taxation, each payer withholds tax only on its own payments, so too little tax is withheld overall. The assessment then taxes the pensions as if the total had come as one payment, which can mean a back payment (Nachzahlung), and the tax office can set prepayments for later years, according to the government page.
Illustration
A hypothetical single retiree, tax resident in Austria all year, draws the PVA pension from the example above and a company pension from a former employer, for the tax year.
Assumptions: the company pension is EUR 6,000 a year in 12 payments, the two payers don’t tax jointly, and the example leaves out any health contribution or special payment on the company pension to keep the arithmetic on the tax. The pensioner credit counts a pension from a former employer as pension income too, so its test runs on both pensions together. Everything else is as in the first example.
At the payers. The company payer sees EUR 6,000 a year, below the tax-free band, and withholds nothing. The PVA withholds as before: EUR 380.40 in all.
In the assessment. The taxable regular pensions total EUR 25,740 (EUR 19,740 plus EUR 6,000). The tariff takes 20 % of the EUR 8,453 between EUR 13,539 and EUR 21,992, which is EUR 1,690.60, and 30 % of the remaining EUR 3,748, which is EUR 1,124.40. The tax is EUR 2,815.00.
The credit. At EUR 25,740 the credit has shrunk to about EUR 594.04 (EUR 1,020 times 5,754 over 9,880, where 5,754 is the distance to the band’s end at EUR 31,494 and 9,880 the band’s width). Tax after the credit is about EUR 2,220.96.
The gap. The PVA withheld EUR 220.20 of it on the regular pension, so the back payment is about EUR 2,001, a third of the company pension. The extra payments in April and October are unaffected, since their tax is fixed and already withheld.
The gap is large because the second pension lands on top of the first at 20 % and 30 %, while the credit that cushioned the first pension melts away. The PVA lists the situations in which a return is then compulsory:
- several pensions were received at the same time and not taxed jointly
- the pension didn’t run the whole year (see the flag below)
- other taxable income exists
- an allowance was applied wrongly or at the wrong amount
- the sole-earner or single-parent credit was applied wrongly
- social insurance contributions were refunded
Contested flag
The PVA’s page and leaflet list a pension that didn’t run the whole year, as in the year someone retires, among the reasons for a compulsory assessment. The list of grounds in the income tax act, as read for the article on compulsory assessment, doesn’t name that case, and no explanatory page read for this article reconciles the two. The tax office (Finanzamt Österreich) is the authority that decides whether a return is required.
Where this article stops
This article covers Austrian-paid pensions of someone who lives in Austria. Other pension questions have their own articles:
- Pensions from abroad. A resident is taxed on worldwide income, but no Austrian payer withholds on a foreign pension, and the treaty decides which country taxes it. The article on foreign pensions covers that.
- Company pension schemes. How pension funds and company pension insurance are built, funded and paid out is in the article on occupational pensions.
- Increases. A rise in the pension moves the taxable pension up the tariff and through the credit’s band. How the yearly increase is set, including the one set by law for 1 January 2027, is in the article on annual pension increases.
- What the pension is worth. How the Pensionskonto turns contributions into a pension is in the article on the state pension.
Non-residents
Everything above assumes the pensioner is tax resident in Austria. Someone who has moved abroad is taxed differently on the same Austrian pension, and the treaty with the new country matters. The article on an Austrian pension abroad covers it.
US persons
US citizens and green-card holders file a US return on worldwide income, according to the IRS page on US citizens and resident aliens abroad. An Austrian pension is part of that income, and how the treaty splits the taxing rights is a question for a US-qualified tax professional. The article on US persons in Austria sets out the overlay.
International organisation staff
A pension from an international organisation’s own pension fund isn’t a PVA pension. Whether Austria taxes it turns on the organisation’s headquarters agreement, so this article’s rules may not apply. The organisation’s HR or legal office is the place to ask, and the article on international organisation staff covers what still reaches them.
Bottom line
The pension insurer taxes an Austrian pension like pay: the tariff on the pension after the health contribution, less the pensioner credit, with the April and October payments at fixed low rates. For a hypothetical retiree with one state pension, that is usually the end of it, and the tax stays small until the pension climbs past the credit’s reach. A second pension from another payer, a company pension above all, is taxed separately by each payer, and the year-end assessment collects the difference, which in the example above came to a third of the extra pension.
Getting help
Questions about a pension slip, the E 30 or the wage statement go to the PVA, which gives appointments through pv.at.
Questions about an assessment, a notice or prepayments go to the tax office (Finanzamt Österreich).
Anything that needs advice on a reader’s own figures is for a tax adviser (Steuerberater), and the Chamber of Tax Advisers and Auditors keeps a member directory where authorisation can be checked. The article on tax and payroll help explains who may do what, and the Pensions and Retirement hub lists the neighbouring articles.
Official sources
- Versteuerung der Pension, oesterreich.gv.at (in German)
- Pension versteuern in Österreich, Pensionsversicherungsanstalt (in German)
- Sonderzahlungen zur Pension, Pensionsversicherungsanstalt (in German)
- Versteuerung von Pensionen, leaflet, Pensionsversicherungsanstalt (in German)
- Steuerabsetzbeträge, Federal Ministry of Finance (in German)
- Health contribution for pensioners, legal text, Legal Information System of the Republic (in German)
