Employees in Austria will benefit from tax exemptions for the first 15 overtime hours worked monthly, with a cap of 170 euros.

Austria has approved a new tax measure that exempts overtime pay for the first 15 extra hours worked monthly, with a cap of 170 euros per month, replacing the old regulation that allowed only ten non-taxable overtime hours, with a cap of 120 euros. This change, which will come into effect this year, is expected to generate budget losses estimated at 105 million euros by 2026. Although the measure is beneficial for employees, the distribution of benefits is unbalanced, with most benefits going to households in the upper half of the income distribution and men, who work more overtime.

Additionally, a tax clarification has been adopted for work on holidays, where remuneration will be treated as a wage supplement, with a non-taxable limit of 400 euros. This change will simplify the payroll calculation process for companies, but will cost the state approximately 40 million euros annually.