Austria's active pension from 2027: earn up to €15,000 tax-free after retiring

Austria's active pension from 2027: earn up to €15,000 tax-free after retiring Austria's active pension from January 2027: earn up to 15,000 euros a year tax-free with no pension contribution. Who benefits and who stays on the old limits. Topics: News, Economy, Politics.

Working after retirement in Austria is about to become significantly more rewarding. From January 2027, the government rolls out Aktivpension (the active pension) — a package of benefits for anyone who keeps working after claiming their pension. As Krone reports, extra earnings of up to €15,000 per year will be completely tax-free. The pension contribution on that income disappears as well. Parliament passed the law back on 23 September 2026, and earlier rules changed only in small steps. This article explains who the active pension is for, how much you can earn without losses, and who stays on the old limits — plus an FAQ and a short checklist at the end.

What changes in January 2027

The active pension is not a new payment but a tax and insurance regime for working pensioners. From 1 January 2027, income from work after reaching the statutory retirement age (Regelpensionsalter) is exempt from income tax up to €15,000 per year. That is roughly €1,250 per month of extra salary without a single cent of tax.

The second part of the benefit is insurance-based. The employee’s own pension contribution (10.25% of gross salary) is no longer deducted from earnings after retirement. According to the Social Ministry, the measure also covers people who postpone retirement and keep working. For the self-employed, the contribution drops by roughly 45%.

For the full picture of every model launching with the reform, see our guide to Austria’s pension system 2027.

How the €15,000 tax exemption works

The allowance is called Aktivitätsfreibetrag (activity allowance) and applies automatically. According to the Finance Ministry, the first €15,000 of work income per year simply falls outside income tax. Anything above that amount is taxed as usual — only on the excess.

Importantly, the allowance does not replace the regular pension tax credit, Pensionistenabsetzbetrag (a tax discount for pensioners, up to €1,020 in 2026). It applies to work income on top of it. The result is a double relief: your pension keeps its tax break and your side job stays clean.

Before the reform, every euro of extra earnings was taxed at the standard scale. Now the typical “pension plus a part-time job” scenario changes completely.

No pension contribution on top of your salary

The second benefit saves even more than the tax cut. From 2027, no personal pension contribution is deducted from income earned after retirement — the 10.25% every employee normally pays. The employer’s share cannot be waived and simply stays in place.

Here is a quick example: with a part-time job paying €2,000 gross per month, a retiree previously sent €205 to the pension insurance fund every month. From 2027 that money stays in their pocket — €2,460 per year from contributions alone.

Working after retirement has to pay off again: the first layer of extra income stays free of tax and free of pension contributions.

— Social Ministry, on the rationale behind the reform

Who benefits most: two worked examples

The ministry offers two typical scenarios, and the gap between them is telling. A shop assistant with a €2,000 pension who stays on half-time after retiring and earns another €2,000 gross gains around €7,648 per year under the active pension. An engineer with a €2,400 pension and a modest €1,250 side job saves about €6,079 per year.

Profile	Pension	Extra work	Benefit from 2027
Shop assistant, half-time	€2,000/month	€2,000 gross/month	~€7,648/year
Engineer, light side job	€2,400/month	€1,250 gross/month	~€6,079/year

The logic is simple: the higher your extra income, the bigger the effect. That is exactly why the reform is marketed as the active pension — those who work longer get more. Anyone deferring retirement entirely gets a waiting bonus on top: +5.1% of the pension per year of deferral, capped at +15.3% after three years.

Who stays on the old rules

The active pension is tied to reaching Regelpensionsalter, the statutory retirement age (65 for men; the women’s threshold rises step by step to 65 by 2033). Early retirees are excluded. For Korridorpension (the corridor pension), the extra-income limit stays at €551.10 per month in 2026, with a soft tolerance for excess of up to 40% of the threshold.

The benefit also does not apply to disability pensions claimed before the standard age: a 59-year-old on invalidity pension gets neither the allowance nor the contribution waiver. We covered the full extra-income rules for every pension type in our guide to working while on a pension, and the general employment rules in our article on working after retirement.

As oesterreich.gv.at confirms, unlimited extra work alongside a regular old-age pension was already allowed before — the reform adds money on top, not volume.

Frequently asked questions

Do I need to apply for the active pension? No. The allowance and the contribution waiver apply automatically once you reach Regelpensionsalter and keep working. There is no separate form — the benefit shows up directly in your payslip.

What happens to earnings above €15,000 per year? The amount above the allowance is taxed at the regular scale. The pension contribution is waived regardless of income size — the waiver has no ceiling.

Can I combine the active pension with a partial pension? Yes. Teilpension, the partial pension with reduced hours, receives the same benefits from 2027 once Regelpensionsalter is reached. Hybrid scenarios follow the standard rules.

Do the benefits apply to the self-employed? Yes, with a difference: the pension contribution for entrepreneurs in retirement drops by about 45%, while the tax allowance works the same way — up to €15,000 of work income per year.

What to do right now

The reform is already law, and there is still time to prepare before January 2027. If you are approaching retirement age and plan to keep working, the active pension shifts the math in your favour.

• Check your pension account and your expected Regelpensionsalter on your Pensionskonto.
• Ask your employer how a half-time payslip will look from 2027.
• Compare scenarios: working right after claiming versus deferring with the +15.3% bonus.
• If you are on a corridor pension, watch the €551.10 limit until you switch to the regular old-age pension.

Subscribe to our newsletter to stay on top of pension rule changes, and keep our guide to taxes in Austria at hand — the active pension changes the tax picture as well. From 2027, those who work longer really will end up with more.