Wage tax and social security relief measures in the 3rd Austrian COVID-19 Act
1. Tax-free allowance for bonuses and special payments employees receive in connection with the COVID-19 crisis (Section 124 subpara 350 Austrian Income Tax Act (EStG), Section 49 para 3 subpara 30 Austrian General Social Insurance Act (ASVG))
An allowance of up to EUR 3,000, free from both income tax and social security contributions, will be granted in the calendar year 2020 for special payments or bonuses paid to employees due to the COVID-19 crisis.
The regulation is not limited to employees providing essential services or supporting key infrastructure. However, it does not apply to payments which would have been made in normal circumstances before the crisis. For example, the allowance cannot be claimed for performance-related bonuses, which would have been paid normally, but which are higher due to exceptional performance in 2020.
To the degree these payments exceed the tax-free amount of EUR 3,000 they must be taxed at the standard tax rate (the reduced tax rate for certain irregular payments such as the 13th or 14th salary cannot be applied). These supplementary and bonus payments neither increase nor consume the ceiling amount (“annual sixth”) for the tax scheme for irregular payments in accordance with Section 67 para 2 EStG.
2. Commuter allowance can be continued if conditions were met before the COVID-19 crisis
(Section 124b subpara 349 EStG)
The tax free allowance for commuting to and from work can be continued even if employees do not commute to work, or only do so on a limited basis, as a consequence of COVID-19 short-time working, remote working, or incapacity for work due to the COVID-19 crisis.
No change will result for such periods if an entitlement to the tax free allowance for commuting to and from work would ordinarily exist. The rules regarding the continuation of the tax free allowance during sick leave or annual leave are applied accordingly.
It is not entirely clear whether “incapacity for work” is meant to include cases where issues on the part of the employer prevent the provision of work. This concerns e.g. cases of closure of a fixed establishment under the Austrian Epidemics Act, prohibition of access to fixed establishments under Section 1 Austrian COVID-19 Act, or travel restrictions to specific places under the Epidemics Act.
3. Tax-free status of dirty work allowances, allowances for aggravating or hazardous work conditions, unsociable hours, or overtime can be continued (Section 124b subpara 349 EStG)
The tax-free status of dirty work allowances, allowances for aggravating or hazardous work conditions, unsociable hours, or overtime can be continued during COVID-19 short-time working, remote working due to the COVID-19 crisis, or incapacity for work due to the COVID-19 crisis. This includes;
- Dirty work allowances and allowances for aggravating or hazardous work conditions
- Allowances for working on Sundays, public holidays, or at night
- Mark-ups for overtime when working on Sundays, public holidays, or at night
- Overtime Mark-ups
The rules regarding the continuation of the tax free treatment during sick leave are applied accordingly.
It is not entirely clear whether “incapacity for work” is meant to include cases where issues on the part of the employer prevent the provision of work. This concerns e.g. cases of closure of a fixed establishment under the Austrian Epidemics Act, prohibition of access to fixed establishments under Section 1 Austrian COVID-19 Act, or travel restrictions to specific places under the Epidemics Act.
The tax-free treatment can only be continued to the degree the payment of such allowances and mark-ups is continued during COVID-19 short-time working, remote working due to the COVID-19 crisis or incapacity for work due to the COVID-19 crisis.
Example: The short-time working support (Kurzarbeitsunterstützung) employees receive from their employer as a partial cover for lost earnings due to reduced working hours is calculated based on net pay for regular working hours. If overtime hours and mark-ups were previously covered by a revocable overtime allowance, this allowance will not be included in the short-time working support received. Therefore tax free overtime mark-ups cannot be considered in connection with the short-time working support.
Example: An employee works from home due to the COVID-19 crisis and is therefore no longer exposed to hazardous substances during the predominant part of his/her work. While working from home, the employee is still entitled to allowances for hazardous work conditions under the applicable collective bargaining agreement. The tax free treatment for up to EUR 360 per month for dirty work allowances and allowances for aggravating or hazardous work conditions continues to apply.
4. Paid leave for employees/apprentices in COVID-19 risk groups (Section 735 ASVG)
Employees/apprentices who belong to COVID-19 risk groups have the right to paid leave if they can present a medical certificate regarding the risk, except in the following circumstances:
- They are able to work from home;
- Protective measures can be taken at the workplace and for the commute to/from work to eliminate the risk of a COVID-19 infection to the greatest possible extent;
- The employees/apprentices are key workers who support critical infrastructure.
The paid leave will continue until 30 April 2020 at the latest, but the period may be extended by Austrian government directive until 31 December 2020.
As far as the medical certificates for COVID-19 risks are concerned, the health insurance provider will determine the individuals potentially at risk based on existing prescriptions etc., and inform them accordingly. The physician of the employee/apprentice will assess the individual risk situation and issue the medical certificate.
Terminations of employment, which result from paid leave due to a medical certificate for COVID-19 risk groups, can be challenged in court.
The employer has a right to reimbursement for pay and social security contributions in connection with COVID-19 paid leave for at-risk individuals. The application for reimbursement must be submitted to the health insurance provider within six weeks of the end of the period of paid leave at the latest.
5. Accidents at home may constitute workplace accidents (Section 175 paras 1a and 1b ASVG)
For the duration of the measures to prevent the spread of COVID-19 under the Austrian COVID-19 Act, accidents at home constitute workplace accidents even if the employee does not have a separate study or workroom, which is predominantly used for business/professional purposes, to carry out the activities. However, to qualify as a workplace accident, the accident must be temporally and causally linked to working activities.
In this regard, the home office counts as a workplace and accident insurance protection exists for accidents on the way to/from this workplace, such as e.g. going out to get lunch, visiting a doctor, journeys required for the transportation, maintenance or replacement of working equipment, visits to banks, and journeys to childcare providers (Section 175 para 2 subparas 1, 2, 5-8, and 10 ASVG).
