Economy Minister Wolfgang Hattmannsdorfer (ÖVP) supports maintaining the increased tax-free allowance for overtime bonuses, which is set to expire at the end of 2025. “Those who work more should also get more out of it,” he said in a statement released Saturday. The tax exemption for overtime pay was expanded in 2023 as part of the abolition of so-called “cold progression.” The coalition debate over the issue was first reported Saturday by Krone and Heute.
For 2024 and 2025, the monthly tax-free allowance for up to 18 overtime hours was raised to €200 per month. Starting in 2026, it is scheduled to revert to €120 for up to 10 overtime hours. “We need the right incentives,” Hattmannsdorfer emphasized, adding that “every additional hour of work strengthens our economy and contributes to Austria’s comeback.” Talks on the issue are currently ongoing within the coalition, a spokesperson for the minister told APA.
Finance Ministry Points To Coalition Agreement
The continuation of the higher allowance should be implemented “as quickly as possible,” ideally by 2026, Hattmannsdorfer’s office said, though it acknowledged the difficult budgetary situation. The coalition agreement stipulates that overtime pay and bonuses will be granted tax benefits starting in 2027—but only subject to budgetary conditions.
The Finance Ministry referred Krone to the coalition negotiations. “All three parties agreed during the government talks that this reduction would take effect in 2026,” the ministry of Finance Minister Markus Marterbauer (SPÖ) was quoted as saying. Labor Minister Korinna Schumann (SPÖ) told Heute that she first wants to “address the imbalance that last year alone, 42 million overtime hours worked by employees were neither compensated in time nor money,” before discussing tax rates.
