Austria to tax teleworking allowance starting in 2027

Starting January 1, 2027, Austria will implement significant changes to the taxation of remote work under the Budget Accompanying Act 2027–2028. The current tax exemption for the teleworking allowance, which allows up to 3 euros per teleworking day for a maximum of 100 days per year, will be abolished.

Under the new regulations, these payments will be treated as fully taxable income. This change will subject the allowance to social security contributions, increasing non-wage labor costs for employers. Specifically, payments will trigger employer contributions, surcharges, and municipal taxes.

For companies with existing contractual agreements regarding the allowance, the payments cannot be unilaterally reduced or canceled. In cases involving net wage clauses, the Supreme Court (OGH) suggests that employers may be required to bear the additional tax and social security burdens to maintain the agreed net amount.