Austria to Tax Home-Office Allowance From 2027, Leaving Employers to Foot the Bill

Austrian companies that have promised staff a home-office allowance will not be able to walk away from it when the tax rules change. From 1 January 2027, the Telearbeitspauschale — the flat-rate payment for remote work — becomes fully subject to tax and social insurance contributions under the Budgetbegleitgesetz 2027–2028 (the budget accompanying act), a shift that pushes fresh costs onto employers and employees alike.

Until now, up to 3 euros per teleworking day could be paid tax-free, capped at 100 days in a calendar year. Both that exemption and the previously available deduction of differential income-related expenses (Differenzwerbungskosten) disappear entirely, as reported by derstandard.de on 02.11.2026.

Contractual promises survive the tax change

For businesses, the reform brings no automatic relief on what they actually pay out. Where a contractual commitment to the allowance exists, it remains valid — meaning employers cannot unilaterally cancel or reduce the agreed sum.

Once the preferential treatment ends, the payment counts in full as taxable remuneration from 2027 and is therefore subject to full social insurance contributions. On top of that, employers face additional payroll costs, because the payments trigger the employer contribution (Dienstgeberbeitrag, DB), the surcharge to the employer contribution (DZ) and the municipal tax (Kommunalsteuer).

Contracts containing net-pay clauses create a particular legal bind: the Supreme Court (OGH) assumes a derived net-wage arrangement in cases of doubt, which would leave the employer to cover the resulting charges as well.

Notice periods for telework arrangements

Companies and staff who want to adjust existing agreements in response to the tighter rules must observe statutory notice requirements. An individual telework arrangement can be terminated for good cause, with labour law providing a notice period of one month, effective at the end of each month.

Where rules were set at collective level, different deadlines apply. Works agreements on telework concluded without a fixed term can be terminated with three months' notice to the end of a month — though such agreements continue to have legal effect after termination (Nachwirkung).

Proof rules for ergonomic furniture

The Budgetbegleitgesetz 2027–2028 also touches the tax deductibility of equipment for the home workplace. Employees can still claim spending on ergonomic furniture of up to 300 euros per calendar year as income-related expenses.

What changes from 2027 is the formal proof requirement. Previously, staff had to document at least 26 teleworking days in the calendar year to qualify; that criterion is dropped. Instead, from 2027 the deduction will hinge on having a telework agreement in place with the employer.