Tax traps 2025: This is how new laws affect your salary!

Tax traps 2025: This is how new laws affect your salary!

Austria's government is facing drastic changes to the cold progression that could severely affect many employees from 2025. These reforms serve to balance the budget and mean that many citizens have to expect a lower net salary even if their gross salary remains the same. People with a monthly gross income of 6,300 euros or more are particularly affected. Despite the promised abolition of cold progression, the appreciation of over 6% will mean that social security contributions will increase and ultimately net wages will shrink kosmo.at reported. This increase could mean an annual loss of up to 360 million euros for employees.

The new Progression Compensation Act 2025 will introduce further tax innovations. In the future, employees will be able to receive tax-free bonuses of up to 3,000 euros, but these are subject to certain conditions. There are also adjustments to teleworking and home office, which are now officially classified as teleworking, with the work locations being expanded. Employers are allowed to pay their employees a flat rate of 3 euros for teleworking days, up to a maximum of 300 euros per year. Higher exemption limits for the taxation of other remuneration as well as increases in daily and overnight allowances are also planned for 2025 sagedpw.at described in detail.

Although the legislative measures aim to alleviate some of the tax burden, they are not without challenges and ambiguities. Changes in benefits in kind and the standardization of mileage allowances are further points that will shape the new tax landscape. From 2025, the taxation of employment contracts, particularly in connection with business trips, will be reregulated, which could lead to further adjustments. An exciting year lies ahead as it remains uncertain what additional legal changes could be decided due to possible political changes.