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Effective January 1, 2026, Austria increases the annual commuter allowance (Pendlereuro) from EUR 2 to EUR 6 per kilometer. The flat-rate EUR 30 reimbursement for charging company electric vehicles at home ends December 31, 2025, requiring employers to reimburse actual costs from January 1, 2026. Family allowances and child tax credits will not be inflation-indexed for 2026 and 2027, remaining at 2025 levels. Contraceptives and female hygiene products become VAT-exempt from January 1, 2026. Additionally, mandatory electronic filing via FinanzOnline begins September 1, 2025 for VAT filers.
Austria Increases Commuter Allowance to EUR 6/km and Ends Flat-Rate EV Charging Reimbursement from January 1, 2026
Effective January 1, 2026, Austria will increase the annual commuter allowance (Pendlereuro) from EUR 2 to EUR 6 per kilometer. Simultaneously, the flat-rate EUR 30 reimbursement for charging company electric vehicles at home ends on December 31, 2025, requiring employers to reimburse actual costs from January 2026. Additionally, family allowances and child tax credits will not be inflation-indexed for 2026 and 2027, remaining frozen at 2025 levels.
Who is affected
Employers: All Austrian employers who provide commuter allowances or reimburse employees for electric vehicle charging costs must update payroll systems and reimbursement processes.
Employees: Workers claiming commuter allowances will receive higher annual deductions. Employees charging company electric vehicles at home must track and document actual electricity costs for reimbursement.
Families: Households receiving family allowances (Familienbeihilfe) and child tax credits will see no inflation adjustments in 2026 or 2027.
VAT-registered businesses: Entities filing VAT returns must comply with mandatory electronic filing via FinanzOnline starting September 1, 2025.
What's changing
| Item | Before | After (2026-01-01) |
|---|---|---|
| Commuter allowance (Pendlereuro) | EUR 2 per kilometer | EUR 6 per kilometer |
| EV charging reimbursement | EUR 30 flat rate per month | Actual costs incurred |
| Family benefit indexing | Annual inflation adjustment | Frozen at 2025 levels (2026–2027) |
| VAT on contraceptives and female hygiene products | Standard VAT rate | Exempt |
The EUR 30 flat-rate reimbursement for home charging of company electric vehicles terminates on December 31, 2025. From January 1, 2026, employers must reimburse employees based on documented actual electricity costs.
Austria's annual inflation adjustment mechanism, operational since January 1, 2023, adjusts tax brackets and allowances using two-thirds of the inflation rate measured from June to May. The Federal Ministry of Finance announces updated amounts by August 31 each year. However, family allowances and child tax credits are explicitly excluded from this adjustment for 2026 and 2027.
What NEO partners and clients should do
- By December 31, 2025: Update payroll systems to reflect the EUR 6 per kilometer commuter allowance rate effective January 1, 2026.
- By December 31, 2025: Implement processes for employees to submit actual electric vehicle charging cost documentation. Discontinue EUR 30 flat-rate reimbursements after this date.
- By September 1, 2025: Ensure all VAT-registered entities file tax documents electronically via FinanzOnline. Paper filing will no longer be accepted.
- Ongoing: Communicate to employees that family benefit amounts will remain at 2025 levels through 2027 despite inflation.
