Call for Complete Tax Exemption on Tips in Austria

The President of the Chamber of Commerce, Harald Mahrer, has advocated for a complete exemption from taxes and social contributions on tips given to service staff. In a recent statement, Mahrer emphasized that tips, which customers voluntarily provide for quality service, should not be subject to taxation by the government. He highlighted that tips serve as a form of recognition and should not be considered as income, particularly in the hospitality and restaurant sectors where employees often work under significant pressure.

Currently, tips are generally subject to social security contributions, with regulations varying by industry and region. In Vienna, for instance, the monthly allowance for tips is approximately EUR60, with any amount exceeding this threshold being fully taxable under social security laws. With the rise of electronic payments, tracking tips has become more straightforward, leading to increased scrutiny from tax authorities, which has sparked concern among service workers regarding potential tax liabilities.

Reports have recently surfaced about demands for additional contributions from the Austrian Health Insurance Fund (ÖGK) following audits of tip declarations, further complicating the situation for workers in the sector. The current government program includes a commitment to evaluate the differing regulations across federal states and aims to establish a unified approach to tip taxation.

A market study commissioned by the Chamber of Commerce revealed strong public support for tax-free tips, with 88% of Austrians in favor of exempting tips from taxation. Furthermore, 87% opposed any taxation on tips received by businesses. Notably, half of the respondents indicated that they would reduce the amount of tips they give if tips were to be taxed.

In contrast, the Freedom Party (FPÖ) criticized Mahrer's proposal, labeling it as a disingenuous effort by the Austrian People's Party (ÖVP). FPÖ tourism spokesperson Christoph Steiner pointed out that the government program, which Mahrer had a significant role in negotiating, does not mention tax exemptions for tips.