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C. Tax-exempt payments by the employer

Which payments by the employer remain tax-exempt in the current payroll accounting?

  • Use of the employer's facilities and premises — free of charge or at a reduced price — which the employer makes available to all or specific groups of employees. This comprises, for example, recreation homes and health resorts, sports facilities or company libraries, as well as measures for health promotion and prevention, as far as these are covered by the range of services of public health insurance, as well as vaccinations.

  • Childcare grants up to a maximum amount of €2,000 per child and calendar year that the employer makes available to all or specific groups of employees. The employees must have received family allowance for the child for more than six months of the year, and the child must not yet have reached the age of 14 at the beginning of the calendar year.

  • Voluntary contributions by the employer towards the funeral expenses of an employee or of the spouse/partner or children of the same, who are entitled to more than six months of family allowance or support money deduction.

  • Benefits from attending company events up to €365 per year (company excursions, cultural events, company festivities, etc.) and the remunerations in kind received in such contexts, up to €186 per year, such as Christmas presents, gift vouchers or gold coins.

  • Payments by the employer to provident schemes (e.g. endowment insurances, life insurances, health insurances, shares in pension investment funds or contributions to pension funds) for all or specific groups of staff members (e.g. all wage earners or all salaried employees) or to the works council fund, up to €300 per year and employee. This may also be achieved by converting remunerations into such pension contributions. This tax-exempt amount may be claimed for every employer; it may thus also be claimed two or more times per year.

  • Voluntary social contributions by the employer to the works council fund and voluntary contributions to repair damage caused by disasters.

  • Free or discounted transfer of employee shareholdings in the employer's company to all or specific groups of employees up to €3,000. Such employee shareholdings must be held for five years before finally becoming tax-exempt.

  • Employee profit-sharing scheme: Since 2022, employers can grant active employees a tax-exempt share of profits. The prerequisite is that it is granted to all employees or certain groups of employees. The earnings before interest and taxes under company law for the business years ending in the last calendar year are used. The benefit amounts to up to €3,000 per year per employee.

  • Start-up employee profit-sharing: Since calendar year 2024, there has been a tax benefit for start-up employee profit-sharing. If the requirements are met, the monetary benefit from the transfer of company shares to employees is not taxed when profit-sharing is granted, but—as a rule—only when the shares are actually sold.

  • Employee bonus: Allowances and bonus payments additionally granted by the employer in 2025 for objective, business-related reasons are tax-free up to an amount of €1,000. If both an employee profit-sharing payment and an employee bonus were paid by the employer in 2025, a total of only €3,000 can be treated as tax-exempt for both payments combined.

  • Free or reduced-price meals and beverages at work. Restrictions apply if meal vouchers were issued instead. Meal vouchers will remain tax-exempt up to €8 per working day, food vouchers up to €2 per working day.

  • Employee discounts: The term "employee discounts" describes benefits in kind from the free or discounted provision of goods or services offered by the employer or a group company affiliated with the employer in the normal course of business. Employee discounts are tax-exempt up to the following amounts:

    • Employee discounts up to 20% are tax-exempt (tax-exempt amount) and do not lead to remunerations in kind.
    • If the employee discount in the individual case exceeds 20%, overall an annual tax-exempt amount of €1,000 is applicable, with the employer having to disclose all discounts granted during a calendar year that exceed 20%.

Teleworking flat rate (previously home office flat rate)

To compensate for the costs arising from teleworking, the employer can pay a so-called teleworking flat rate. Up to €3 per teleworking day can be paid tax-exempt for a maximum of 100 days in calendar year 2025. A teleworking day is when professional activities are carried out exclusively at home or at a location chosen by the employee and not belonging to the company, based on an agreement made with the employer. The term "home" refers not only to the employee's private flat or house, but also to the home of close relatives (e.g. a partner). If the total amount of €300 per year (€3/day × 100 days) is not used up, for example, because the employer disbursed only €2 per teleworking day, then the difference is taken into account in the employee tax assessment if the teleworking days are indicated in the pay slip (see page 102).