The Budget Accompanying Act 2027/2028 introduces numerous changes to Austrian tax, social security and payroll law. Most of the new rules will take effect on 1 January 2027 or 1 January 2028 and will affect both employers and employees.
Below is an overview of the most important changes:
Home office / remote work
The tax benefit for the existing remote work allowance (“Telearbeitspauschale“) will be abolished from 2027. If the employer continues to pay such an allowance, it will generally be subject to both tax and social security contributions.
The tax benefit for ergonomically suitable home office furniture will generally remain in place. Expenses for a desk, office chair or lighting may still be claimed as employment-related expenses up to EUR 300 per calendar year.
The documentation requirements will change: the previous requirement to provide evidence of at least 26 remote work days and to record remote work days on the annual payroll statement will no longer apply. However, if requested by the tax authorities, a written remote work agreement with the employer must still be available.
Family Bonus Plus
From 2027, the rules for splitting the Family Bonus Plus between two eligible persons will become more restrictive.
If there is no child under the age of four living in the household, allocation is generally only possible in a ratio of 50:50 or 75:25. In these cases, full consideration for only one of the two eligible individuals is no longer provided for.
For children under the age of four, as well as in certain other cases, a 100:0 or 50:50 split will still be possible.
Social Security
Several changes will lead to higher social security contributions:
- The marginal earnings threshold for so-called “geringfügig” employment will remain unchanged at EUR 551.10 per month in 2027.
- The maximum contribution base will be increased in 2027 and 2028 in addition to the regular annual adjustment.
- Payments that were previously treated as contribution-free remote work allowances will generally become subject to social security contributions from 2027.
- Reduced employee contributions to unemployment insurance for low-income employees will be gradually phased out.
Relief for Employers
A positive change will take effect from 1 January 2028:
The employer contribution to the Family Burden Equalisation Fund will be reduced from 3.7% to 2.7%. At the same time, however, the current exemption from the employer contribution for employees over the age of 60 will be abolished. As a result, the actual relief will be lower for companies employing older workers.
Partial retirement (“Altersteilzeit”)
Stricter funding regulations for new partial retirement agreements will apply as early as November 1, 2026. Among other things, the eligible contribution base and the portion reimbursed by the Public Employment Service (AMS) will be reduced.
Companies planning such arrangements should take the new rules into account at an early stage.
Greater responsibility when selecting contractors
To combat social security fraud, liability rules will become stricter from 1 January 2027.
In future, clients may also become liable for payroll tax and VAT if, when awarding the contract, they knew or should have known that the contractor or a subsequently engaged company was a fictitious business.
Liability may also affect companies further down the contracting chain and arises once a company has been legally determined to be a fictitious business.
Our recommendation
Many of the new rules will require timely adjustments to payroll processes as well as a review of existing procedures and agreements.
We are closely monitoring further developments and are happy to support you in implementing the changes correctly and in good time.
Do you have any questions?
The FAS team is always happy to assist you.
Source: Budgetbegleitgesetz 2027–2028 – BGBl. I Nr. 62/2026 (RIS)
