The austerity plan in Vienna hits employees' salaries
Starting from January 2026, many employees in Vienna will see a noticeable decrease in their net salaries due to an increase in several taxes and contributions. The biggest changes come from the housing support contribution, which is part of the austerity program being implemented by the City of Vienna with the aim of saving around two billion euros by 2026.
The housing support contribution for employees, currently at 0.5% of the gross salary, will rise to 0.75% in 2026, with employers also required to pay the higher percentage. This change is expected to generate around 200 million euros annually for the city's treasury. For employees, this means a larger annual deduction from salaries based on income. For example, someone earning 2,000 euros gross will lose about 60 euros net annually, while someone earning 5,000 euros will lose about 150 euros. The maximum contribution will result in a deduction of about 184 euros annually for higher wages.
In addition to the housing contribution, other deductions from salaries are expected to decrease further. Social security contributions will increase despite the partial exemption from the tax scale, and the service fee for the e-card will nearly double from €13.80 to €25.00, which will be deducted from November salaries.
However, some categories are exempt from the increase in housing support contributions, including trainees, marginal employees, freelancers, caregivers, and workers in agriculture and forestry. This contribution is based on the Housing Support Act of 2018, which allows federal states to impose these wage-related fees.
With the combination of higher taxes, increased fees, rising parking costs, and higher public transport ticket prices, the year 2026 will see a significant decrease in disposable income for many employees in Vienna. Even with a wage increase of 2.55% according to the upcoming collective agreements, it is unlikely that these increases will fully offset the higher deductions.