The National Council has passed important amendments to the Tax Amendment Act 2024, which also have a significant impact on the tax treatment of employee bonuses. These changes will soon be published in the Federal Law Gazette.
Similar to the cost-of-living bonus for the calendar years 2022 and 2023, the employee bonus also had to be an additional payment to date, whereby it may not be granted as a substitute for bonuses, commissions, allowances or extraordinary wage increases already granted. In principle, the agreement must provide for the granting of a bonus for all employees. Differentiation with regard to the amount of the bonus is permitted on the basis of objective criteria (tax grouping).
If both an employee bonus and a profit share are paid out in calendar year 2024 in accordance with Section 3 (1) no. 35 Income Tax Act (EStG), it should be noted that only a maximum total amount of EUR 3,000 may remain tax-free, as otherwise the mandatory assessment requirement of Section 41 (1) Income Tax Act (EStG)is met.
"An additional payment shall also be deemed to be a temporary employee bonus that is granted instead of a wage increase on the basis of a relevant wage-determining provision in accordance with this provision."
This addition is intended to eliminate demarcation problems and expand the scope of the parties to the collective agreement. According to the explanatory notes to AA-404 XXVII. GP, the criterion that a tax-free employee bonus must be an additional payment not previously granted was considered restrictive for the parties to the collective agreement. Therefore, the employee bonus granted in the calendar year 2024 should remain tax-free even if it replaces a wage increase agreed for 2024. This also applies if the employee bonus is used to calculate future collectively agreed minimum wages. The other requirements (as described above) remain in place. This regulation also applies retroactively for all payments already made in 2024.
Employee bonus 2024
The employee bonus (former cost-of-living bonus) pursuant to Section 124b Z 447 lit. a Income Tax Act (EStG) can generally be paid out to employees tax-free up to an amount of EUR 3,000, provided that it is granted on the basis of a wage-determining provision pursuant to Section 68 para. 5 Z 5 or Z 6 Income Tax Act (EStG). This implies that, in principle, there must be a collective agreement regulation on the granting of an employee bonus or a company agreement on the granting of an employee bonus that was concluded on the basis of a special collective agreement authorization. If there is no collective bargaining body on the employer side, the employee bonus may be granted tax-free provided that the employer concludes a works agreement on the granting of an employee bonus with the collective bargaining body on the employee side. If there is no works council, an agreement on the granting of an employee bonus can be concluded with all employees, provided that a collective agreement authorizing the conclusion of a works agreement is in place.Similar to the cost-of-living bonus for the calendar years 2022 and 2023, the employee bonus also had to be an additional payment to date, whereby it may not be granted as a substitute for bonuses, commissions, allowances or extraordinary wage increases already granted. In principle, the agreement must provide for the granting of a bonus for all employees. Differentiation with regard to the amount of the bonus is permitted on the basis of objective criteria (tax grouping).
If both an employee bonus and a profit share are paid out in calendar year 2024 in accordance with Section 3 (1) no. 35 Income Tax Act (EStG), it should be noted that only a maximum total amount of EUR 3,000 may remain tax-free, as otherwise the mandatory assessment requirement of Section 41 (1) Income Tax Act (EStG)is met.
New regulation on employee bonuses
The following sentence was added to Section 124b Z 447 lit. a Income Tax Act (EStG) 1988:"An additional payment shall also be deemed to be a temporary employee bonus that is granted instead of a wage increase on the basis of a relevant wage-determining provision in accordance with this provision."
This addition is intended to eliminate demarcation problems and expand the scope of the parties to the collective agreement. According to the explanatory notes to AA-404 XXVII. GP, the criterion that a tax-free employee bonus must be an additional payment not previously granted was considered restrictive for the parties to the collective agreement. Therefore, the employee bonus granted in the calendar year 2024 should remain tax-free even if it replaces a wage increase agreed for 2024. This also applies if the employee bonus is used to calculate future collectively agreed minimum wages. The other requirements (as described above) remain in place. This regulation also applies retroactively for all payments already made in 2024.
Legal assessment
The new regulation relates exclusively to the condition "additional payment" and refers to all wage-determining provisions pursuant to Section 68 para. 5 no. 5 or 6 Income Tax Act (EStG). This results in the following test steps for the future, which must be observed. First, as before, it must be assessed whether there is a wage-determining provision pursuant to § 68 para. 5 no. 5 or 6 Income Tax Act (EStG) as the basis for payment. The next step is to assess whether there is an additional payment. Here, the legislator now also concedes retroactively for 2024 that a temporary employee bonus that was granted instead of a wage increase fulfills the requirement of being an additional payment.Author:
Franziska Waltersdorfer franziska.waltersdorfer@bdo.at +43 5 70 375 - 8108 |