Austria Approves New Tax Law for Overtime and Holidays
The Austrian parliament has given the green light to a regulation that establishes how to tax specifically additional working hours and work performed on Sundays and public holidays. This regulation, which will take effect in 2026, arises from a court decision that invalidated the previous framework. Its purpose is to ensure that tax incentives for those who work these hours are maintained in a transparent and permanent manner. 📜
Details of the New Tax-Free Allowance
The law specifies a monthly allowance of 170 euros that will be tax-free, applicable to bonuses for overtime hours. This measure seeks to eliminate the existing legal ambiguity and provide a secure framework for employees and companies by clearly defining the exemption. Thus, it resolves the uncertainty generated by the court ruling.
Key Points of the Regulation:- Establishes a clear tax threshold for overtime payments.
- Provides legal certainty to workers and companies.
- Ensures the continuity of the tax benefit as an incentive.
The new regulation corrects the legal vacuum and ensures a predictable system for compensating work in special hours.
Background and Motivation of the Law
This legislative action responds directly to a ruling by the Federal Fiscal Court of Austria, which annulled the previous tax deduction criteria. The previous regulation became ineffective, creating the need for a new legal framework. The current law ensures that the tax incentive to compensate for effort in non-conventional shifts does not disappear.
Effects of the Previous Ruling:- Anulled the previous tax practices on overtime.
- Generated a period of regulatory uncertainty.
- Impelled the creation of a new and specific law.
Practical Implications and Conclusion
With this law, accounting and payroll professionals must adapt their calculations to include this new exempt allowance. Beyond the numbers, the regulation stabilizes the conditions for those who work on Sundays and holidays, recognizing their work with a specific and predictable tax benefit. The system seeks to be fair and clear for all parties involved. ⚖️