Austria Budget 2027: 5.1B Euro Cuts, New Taxes &

Vienna, 20 May 2026 The Austrian government has unveiled plans to consolidate 5.1 billion euros by 2028 through a combination of spending cuts and new taxes, with Finance Minister Markus Marterbauer set to deliver the budget speech on June 10. The budget includes significant changes to unemployment benefits, including a proposed four-week waiting period before benefits are paid after mutual termination of employment. Employers would cover two weeks of this period, while employees would forgo two weeks of benefits. Subsidies for hiring long-term unemployed individuals will be reduced by 100 million euros annually, while low-income earners will now have to contribute to unemployment insurance, expected to generate 276 million euros in 2027 and 415 million euros in 2028. The government plans to tighten criteria for cure benefits, saving 50-75 million euros, and will no longer adjust family and social benefits to inflation, saving 150 million euros in 2028. Alcohol taxes will increase by 30%, projected to bring in 40 million euros in 2027 and 50 million euros in 2028. The bank levy will be extended until 2029, and corporate tax will rise to 24% for profits over one million euros. ## Tax Changes and Revenue Measures Companies will see their contributions to the Family Burden Equalization Fund (FLAF) reduced by one percentage point, while being required to pay into the fund for employees over 60. The government expects this change to lead to more hiring and higher net wages. The AMS (Public Employment Service) will receive an additional 170 million euros next year and 100 million euros from 2028 for active labor market policies, despite cuts to other programs. Pension adjustments will remain below inflation rates, expected to save 280 million euros in 2027 and 550 million euros in 2028. The possibility of receiving unemployment benefits while eligible for corridor pensions will be eliminated. ## Labor Market Reforms Other measures include abolishing home office allowances and self-employment workplace deductions, eliminating tax exemptions on securities gains from 2027-2029, and applying vehicle taxes to Ukrainian-registered vehicles. Infrastructure Minister Peter Hanke's department will see reductions in ÖBB (Austrian Federal Railways) framework plans and reforms, saving 55 million euros in 2027 and 285 million euros in 2028. The budget allocates 2.5 billion euros for state budget sanitation and 2.6 billion euros for offensive measures including payroll tax reductions for companies. ## Budget Allocation A controversial proposal by Vice Chancellor Andreas Babler to tax streaming services lacks majority support and may not be implemented. The government expects these measures to reduce 'parking' of seasonal workers at employment services, saving 200 million euros, while maintaining the AMS budget for active labor market policies at approximately 1.1 billion euros.

Austrian Government Announces Major Budget Cuts and Tax Increases

Tax Changes and Revenue Measures

Labor Market Reforms

Budget Allocation