OGH: Amendments to the Austrian Income Tax Act

Mar 26, 2026 Benn-Ibler Rechtsanwälte

The Austrian parliament has authorised tax relief measures for overtime work and employment during public holidays.

Public holiday work: Tax-exempt up to EUR 400 per month

Employers have often handled pay for work done on public holidays inconsistently, sometimes considering it taxable and at other times tax-exempt.

This amendment to the Austrian Income Tax Act (Einkommenssteuergesetz, EStG) is intended to provide greater legal clarity by explicitly affirming the tax-exempt status of public holiday pay within the scope of the existing allowance. As a result, the updated allowance will include compensation for jobs considered dirty, difficult, or dangerous; additional pay for Sunday, public holiday, and night shifts; overtime pay related to such work; and payments for public holidays.

The amendment takes effect on 1 January 2026.

Expansion of overtime allowances that are exempt from tax

For 2026, employees can receive tax-free allowances for up to 15 hours of overtime per month, with a maximum value of EUR 170 applied retroactively. Without this legislative change, the tax-free cap would have dropped from EUR 200 (which temporarily applies for 2024 and 2025) to EUR 120. The original lower limit (10 hours of overtime up to EUR 120) is scheduled to be reinstated in 2027.

Converting phantom shares to start-up employee equity

The 2024 Tax Amendment Act now allows employees to swap virtual company shares, known as ‘phantom shares’, for start-up shareholdings. This change removes the requirement to assess and tax the monetary value of these benefits.

This provision, previously ending on 31 December 2025, has been extended to 31 December 2026.

BlgNR 666/A XXVIII. GP – Private Member's Motion (16 December 2025)