Changes to employee bonuses due to the 2025 Budget Accompanying Act

The Budget Accompanying Law 2025 has introduced a further modified version of the employee bonus from an income tax perspective. For the year 2025, an employee bonus of a maximum of €1,000 can be paid out tax-free regarding income tax. However, the employee bonus is subject to social security contributions and ancillary wage costs. A certain simplification compared to the employee bonus for 2024 is that the income tax exemption of the bonus is not tied to a collective agreement – however, objective, company-related reasons for granting it must exist. Furthermore, it should be noted that the total amount granted tax-free regarding income tax from employee bonuses and any employee profit-sharing granted tax-free regarding income tax must not exceed €3,000 per year in total. The future of the employee bonus in subsequent years remains to be seen, as it is intended to be granted for the year 2026, at least, depending on budgetary possibilities.

Other income tax changes – in addition to the previously reported increase in the commuter allowance and the suspension of the indexing of the child tax credit, etc. – include an amendment to the travel expenses regulation (through a legislative package passed at the same time). From 1 July 2027, the official mileage allowance for motorcycles and bicycles will be reduced to just 25 cents. This is noteworthy because the mileage allowance rates had only been raised to 50 cents (along with the mileage allowance for cars) from 1 January 2025.

Changes have also been made in the area of the ASVG and in social law, such as the "freezing" of the minor employment threshold, which will remain €551.10 in 2026. Likewise, there is an increased e-card service fee of €25 (instead of the planned €14.65), which will also be deducted from pensioners from 2026. Speaking of pensions, there have also been stricter conditions for accessing bridge pensions. Consequently, in principle, a bridge pension will only be possible in future from the age of 63 (instead of the previous age of 62), provided that 504 months of insurance cover (instead of 480) are met.

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