Commuting in and to Austria
This article presents the most important terms and facts on the topics of commuting and cross-border workers in Austria as well as the possibilities to get reimbursement for the related financial expenses. You will find out what qualifies you as a potential commuter or cross-border worker and how you can reclaim the financial expenditures.
According to Austrian law, commuters (“Pendler:innen“) are considered to be people who have to travel a far distance from their place of residence to their place of work. For this purpose, they either depend on public transportation or private vehicles. In Austria, it is possible to take advantage of a commuter allowance (“Pendlerpauschale”) or commuter euro (“Pendlereuro”) and thus receive remuneration for the distance travelled and time required to commute.
In contrast, according to Austrian law, cross-border workers (“Grenzgänger:innen”) are Austrians (or foreigners) who have their place of residence in Austria or a neighbouring country (country of residence) and return to this place daily after carrying out their work from Austria or a neighbouring country (country of employment) after carrying out their work.
In this case, the country of employment is Austria, and the country of residence is one of the countries bordering on Austria (Italy, Switzerland, Liechtenstein, Germany, Czech Republic, Slovakia, Hungary and Slovenia).
Generally, all travel costs between the person’s apartment and place of work are compensated for though the deductible amount for travel expenses (“Verkehrsabsetzbetrag”), which is calculated according to the annual gross salary. On average, this equals € 400. This is taken into consideration within the context of the employee tax assessment (“Arbeitnehmer:innenveranlagung”) and is available to all commuters and cross-border workers employed in Austria, including full-time and part-time employees). A higher deduction for travel expenses, calculated according to the commuter compensation amount (“Pendlerausgleichsbetrag”) can bring up to € 650 per year or up to € 690 annually (in the case of an annual salary of up to € 12,200), and is calculated by the tax office within the context of wage compensation.
Commuting in Austria
Commuters in Austria are entitled to a commuter allowance or commuter euro.
The flat ratecommuter allowance is a type of financial support determined individually on the basis of the following three criteria:
- Distance between the place of residence and place of work
- Extent to which it is reasonable to assume the use of public transportation
- If the person commutes more than eleven days per month
The commuter allowance can be paid within the context of the employee tax assessment on the basis of a reduction of the wage tax base (“Lohnsteuerbemessungsgrundlage”) and by setting it off against the tac liability.
The following employees are exempt from claiming the commuter allowance:
- Employees who use a passenger car or truck made available by the employer
- Employees who claim commuter trips as business expenses (“Werbungskosten”) within the context of the employee tax assessment
The so-called small commuter allowance (“kleine Pendlerpauschale”) can be claimed if it is reasonable to assume that public transportation can be used. (In this case, the actual number of kilometres on the route between the place of residence and place of work is the decisive criteria.)
The large commuter allowance (“große Pendlerpauschale”) can be claimed if it is unreasonable to assume the use of public transportation by the employee, and the employee has to resort to using a private vehicle.
One has to commute for at least eleven days per month in order to take advantage of the commuter allowance or the commuter euro (sick leave and vacations are included here). Parental leave is excluded. This applies equally to full-time and part-employees.
The commuter euro is an additional instrument (in effect since 2013) complementing the commuter allowance (considered to be a prerequisite). It can be directly claimed as a tax deduction. It represents an annual amount and is calculated by multiplying the distance between the employee’s place of residence and workplace by two.
- For example, if the distance between the place of residence and workplace is 35 kilometres, the commuter euro will equal € 70.
35 km x 2= € 70.
- This amount is calculated on a pro rata basis for part-time employees. The commute euro is shown on the monthly payroll accounting and is taken into account by the employer.
On the basis of the Commuter Calculator (“Pendler-Rechner”), everyone can precisely calculate the distance between the place of residence and workplace and determine the commuter euro or commuter allowance. The results can be downloaded as a PDF and claimed directly from the employer within the context of payroll accounting. If the employer takes it into account, it is no longer necessary to note this separately in the employee tax assessment, and the employer is responsible for payment.
COVID-19: It was allowed to grant the commuter allowance and the commuter euro during the period of the COVID-19 pandemic up until 30 June 2021 even if there was short-time work, teleworking or inability to work. This also applies to wage payment periods beginning after 31 October 2022 and ending before 1 January 2022.
There are two possibilities to apply for the commuter allowance together with the commuter euro:
- Applying directly to the employer with the printout of the results of the Commuter Calculator during the calendar year (1 January to 31 December) or
- After the end of the calendar year within the context of the employee tax assessment
or within the context of the income tax declaration (“Einkommensteuererklärung“) (→ USP) by using the forms for the employee tax assessment (“Arbeitnehmerveranlagung –Antrag – L1“), for the income tax declaration (“Einkommensteuererklärung – E1“) and for the commuter allowance and commuter euro (“Pendlerpauschale und Pendlereuro – Berechnungshilfe – L34a“).
One has five years to apply for the employee tax assessment for a given year (for example, the application for the year 2021 can be submitted until the end of December 2026).
Starting with the employee tax assessment for 2021, a maximum of 55% of the social security contributions, or up to € 500 annually, can be reimbursed if income is below the taxable amount and the person is entitled to the commuter allowance for at least one month.
Cross-border workers in Austria
The definition of cross-border workers depends on the respective double taxation convention or double taxation agreement (DTA, in German: “Doppelbesteuerungsabkommen“) with Austria’s neighbours. Austria has concluded a DTA with neighbouring countries, specifying the relevant tax assessment bases and definitions for cross-border workers, and the tax benefits or the commuter allowance and commuter euro which can be calculated.
In principle, wages and salaries are taxed in the country in which the work is performed. For employees from neighbouring countries working for an Austrian employer, this means that an application can be submitted for the commuter allowance and commuter euro, in light of the fact that the income generated in Austria is also taxed.
We will take Austria’s double taxation agreement with Germany as an example:
- Cross-border workers are very specially defined in this DTA, namely that “the place of residence and workplace are considered to be nearby when they are within a 30 kilometre corridor (measured as the crow flies) to the nearest point of the country’s borders. How long the actual length of the journey is (e.g., by road or rail) does not matter.”
- In this case a daily crossing of the border is aspired. However, a level of tolerance has been agreed upon with Germany, so that the definition of cross-border work still applies if the cross-border worker does not return to her or his place of residence for a maximum of 45 working days in one calendar year and/or works outside of the border zone. Days in which the worker does not return because of illness or vacation are not included. In contrast, days in which the employee works from home (e.g., teleworking) are considered to be days in which the worker does not return. The exception (still valid at present) is during the period of the COVID-19 pandemic.
- An exception to taxation in the country in which the work is performed (Austria in this case) is the clause applying to fitters or installers. It applies when the employee does not stay in the country in which the work is carried out for more than 183 days in a calendar year. This could be particularly relevant for part-time workers. The clause is also applicable if the employer is not based in Austria and only operates a permanent establishment in Austria.
However, cross-border workers must be able to credibly identify themselves as such based on a designation by their employers and show proof of such (documents) confirming the typical daily commuting between the place of residence and workplace.
If one is considered to be a commuter or a cross-border worker in line with the above-mentioned definitions and calculations, it is always advisable to inform her or his employer and to figure out the individual situation together with her/him.