The following lists a few special regulations in regard to taxing employment income in Austria. This is not a complete list, but rather a general overview and subject to certain preconditions.
Salaries in Austria are general paid in 14 regular installments: 12 monthly salary payments, plus an additional remuneration usually in June (»holiday pay«) and in November (»Christmas pay«). Salary payment in this way is a precondition to apply for a reduced fixed rate of 6 percent for additional payments, thus the 13th and 14th month of salary will be taxed favorably (and not at progressive rates up to 50 percent).
If salaries are paid in a different scheme (no additional payments in addition to 12 monthly installments), the more favorable rate will not be available.
Due to the principle of causality, payments or similar work-related pay by another country (for work outside of Austria) is usually taxable in that country or has to be split between the countries.
Relocation Costs paid by the employer – costs to move household goods, transportation and travel expenses to and from the location of assignment, plus rent paid on behalf of the employee on the former home (up to a certain extent) – are not considered as taxable income for the assignee. A lump sum paid by the employer to reimburse other expenses in connection with relocation within the group – so-called »Umzugskostenvergütung« – is not considered taxable income as far as the lump sum does not exceed a certain amount.
Housing (apartment or house) provided by the employer free of charge is considered a fringe benefit and is considered taxable income. If the employer is the tenant, tax settings are possible. If the employee rents the accommodation directly and is reimbursed by the employer, a 100 percent of the amount will be added to the taxable income amount. If the
employee needs to establish a second residence for business purposes (and maintains primary residence in his/her home country), expenses for the second residence could be claimed as an income related expense.
The rent and operating costs, as well as furnishing items may be deducted (double household deduction), in an extension that provides for reasonable accommodation in the host country.
Costs for personal travel reimbursed by the employer are generally considered taxable income whereas cost for work-related business trips are tax exempt. A mileage allowance (Euro 0.42/km in 2010) is available under certain conditions. Expenses for home travel/trips may be claimed as a commuting allowance (»Pendlerpauschale«) up to a maximum amount of € 3,372 per year (2010).
Per diem rates for business trips may be tax free provided special requirements are met. There are limitations in regards to the duration (either 5, 15 or 183 days) and the amount per day (depending the duration of the trip and the country).
If an employee’s c ompany car is also used for personal purposes, taxable benefits apply. The advantage treating a company car as a noncash benefit is that the taxable amount is restricted to € 600/month in comparison to cash-reimbursements in which the entire amount is taxable up to a progressive rate of 50 percent.
School fees borne by the employer is considered taxable income but tax deductible (within restrictions) provided the employee’s children or the expatriate require attending a private school for language reasons, for example, or due to the distance between home and the school/university.
Mandatory (Austrian or foreign) employer’s insurance payments are not taxable, mandatory employee’s payments are considered an employee expense.
Personal Insurance Payments (aside from mandatory social security payments) paid by the employer for the employees are considered taxable income. If the advantage is granted to all employees or a group of employees, only amounts exceeding € 300 per year are considered taxable income.
A tax deferral is possible by depositing payments in to a so-called »Pensionskasse« (pension fund) or by committing a pension promise.