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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure AT-2020-14/1247 Updated – measures in Austria

Tax exemption for COVID-19 bonuses

Steuerfreistellung für COVID-19 Bonuszahlungen

Country Austria , applies nationwide
Time period Temporary, 04 April 2020 – 31 December 2021
Context COVID-19
Type Legislations or other statutory regulations
Category Ensuring business continuity and support for essential services
– Remuneration and rewards for workers in essential services
Author Bernadette Allinger (Forba) and Eurofound
Measure added 05 October 2020 (updated 04 February 2022)

Background information

Some companies pay their employees specific bonus payments for specific burdens or hardships caused by the COVID-19 pandemic, e.g. in the retail sector, healthcare and nursing care, or the Austrian railways. Bonus payments have been negotiated in some collective agreements, but also individual employers have opted for such premiums.

Content of measure

With the third COVID-19 law issued on 4 April 2020, a tax exemption for bonus payments to employees was includes. It is in connection with special burdens due to the Corona crisis up to the amount of €3,000 was passed.

This tax exemption is not limited to any sectors or professions and only applies to payments in connection with the Corona crisis. Any such connection must be documented. The recipient does not need to face any particular difficulty (e.g. wearing masks during work). Furthermore, the payment has to be an additional payment that has not usually been granted before; however, it does not have to be a one-time payment: The tax exemption also applies to recurring bonus payments in 2020 up to a total amount of €3,000. The tax-free bonus can also be granted for employees in short-time work or for home office work. The bonus payment is also exempt from social security contributions, but not exempt from municipal tax, the employer's contribution and the mandatory contribution to the Federal Economic Chamber.

Updates

The following updates to this measure have been made after it came into effect.

20 December 2021

On 20 December 2021, the national parliament decided that COVID-19 bonus payments would also be tax free up to an amount of €3,000 for the year 2021 (to be paid until February 2022).

Use of measure

Unknown.

Target groups

Workers Businesses Citizens
Employees in standard employment
Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Unknown Unknown
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • Main level of involvement: N/A

Involvement

The social partners' involvement is unknown.

Views and reactions

The social partners' views are unknown.

Sources

  • 04 April 2020: Bonus payments to employees due to the corona crisis - Tax exemption FacebookTwitterXINGLinkedInTo press (www.wko.at)
  • 04 April 2020: Third COVID-19 Act (www.ris.bka.gv.at)

Citation

Eurofound (2020), Tax exemption for COVID-19 bonuses, measure AT-2020-14/1247 (measures in Austria), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/AT-2020-14_1247.html

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