Almost 1.2 billion euros remains from the abolition of cold progression. Now the turquoise-green federal government has decided where this “last third” should go. It is used to tax income and pensions lower, to make overtime more attractive and to reduce the burden on families. “Achievements must be worthwhile,” Chancellor Karl Nehammer (ÖVP) emphasized several times.
It was a “good day for Austria, for taxpayers,” Nehammer said at a press conference on Friday. A ‘balanced middle path’ was chosen to spend the 1.2 billion euros. They would benefit those “who work hard.” The solidarity welfare state lives off their achievements. The measures should all apply from January 1, 2024.
Lower tax brackets relaxed
The majority of the money – 800 million euros – will be used to alleviate the lowest four tax brackets. The rate limits will be adjusted in a staggered manner:
- The first rate level with a total of 9.6 percent
- The second rate level with a total of 8.8 percent
- The third rate level with a total of another 7.6 percent
- The fourth rate level with a total of another 7.3 percent
Overtime is taxed less
Tax incentives for overtime are also being expanded. “If you work more, you get more out of it,” says Nehammer. In concrete terms, the monthly payment will be permanently increased from 86 to 120 euros. For a limited period, for a period of two years (2024 and 2025), the monthly compensation for 18 hours of overtime should amount to 200 euros per month.
The home office arrangement will be extended indefinitely
The tax incentives for dirt, hardship and hazard allowances and allowances for Sunday, public holiday and night work will also be expanded. The monthly allowance for this will be increased to 400 euros. In addition, the home office scheme, which was introduced for a limited period in 2021, will be extended indefinitely.
The 1.2 billion that will now be spent on structural measures is, according to Social Affairs Minister Johannes Rauch (Greens), the “social third” after the abolition of cold progression. Low-income families benefit from the fact that the additional child benefit is increased from 550 euros to 700 euros.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
