Can a tax reform pull Austria out of part-time work?

Austria is experiencing a rapid rise in part-time employment, growing faster than anywhere else in Europe between 2009 and 2025. The rate climbed to 31 percent in 2025, a five-percentage-point increase from 2009.

This trend comes at a significant cost to the Austrian economy, with Agenda Austria estimating a loss of 7.8 billion euros in additional value creation if those working part-time were to switch to full-time. The state would also gain an estimated 4 billion euros annually from increased social security contributions, wage taxes, and other levies.

According to Agenda Austria economist Dénes Kucsera, the current tax system makes part-time work relatively attractive. For instance, increasing hours from 20 to 30 per week yields only a 33.5 percent net increase in pay, while doubling hours provides a 67.6 percent increase. This lack of strong financial incentive may deter individuals from opting for full-time employment.

While a tax reform could potentially encourage more people to work full-time, its effectiveness remains uncertain. Lowering certain tax brackets might attract some individuals, but it would also come at a considerable cost to the state, with the overall impact on working hours potentially being limited.

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There are good reasons for part-time work. But there are also people who simply do not want to work full-time.