Austria: Last chance to pay a "Corona Bonus" for 2021 with the payroll for January

12 Jan 2022    2 minute read
COVID-19 Corona Bonus EC Featured Content

In brief

With the January Payroll, you can still take advantage of the opportunity to pay out a so-called Corona Bonus of up to EUR 3,000 to employees of your company for 2021. The legal possibility for this has been created at the end of 2021. The advantage of the Corona Bonus is that it is free from wage tax, social security and ancillary wage costs. The granting of the bonus is, therefore, not associated with any further costs for the employer and the employees receive the amount 1 to 1 to their payroll accounts. Below, our team of experts has answered the most important questions for you from a tax and labor law perspective:

Contents

FAQ on the "Corona Bonus" 2021

What requirements must be met for the bonus to be considered a Corona Bonus?

In order for a bonus to qualify as a Corona Bonus, the payment must be made: 

  • solely based on services in relation to the coronavirus pandemic; 
  • additionally (i.e., conversion of another salary component is not possible); 
  • in relation to services in calendar year 2021; and 
  • no later than February 2022.

Which employees may be eligible for a Corona Bonus?

The Corona Bonus is intended to reward employees who have performed exceptional services in connection with the coronavirus pandemic in 2021. This could be, e.g., employees whose work was particularly challenging due to the coronavirus pandemic, be it through an increased workload (e.g., filling in for colleagues who were ill or in quarantine) or more difficult working conditions (e.g., constantly wearing masks). The Corona Bonus can also be used to reward, e.g., employees who have taken on the function of a “COVID-19 officer”. However, when selecting employees, bear in mind, from an employment law perspective, that the principle of equal treatment applies.

Can our company pay employees less/more than EUR 3,000?

Yes, both options are of course possible. However, if more is paid, only an amount of EUR 3,000 is exempt from wage tax, social security contributions and ancillary wage costs such as employer contributions to social security and municipal tax. The amount exceeding EUR 3,000 is treated like all other bonuses from an accounting perspective. 

Is there anything that we as a company should be aware of?

Before payment, it should be communicated to the employees in writing (e.g., via email) that the Corona Bonus is granted once and on a discretionary basis, so that there is no legal claim to repeated granting in subsequent years. Furthermore, the Corona Bonus should be shown as such on the payroll account.

Contact our experts

Feel free to contact our team of experts at any time if you have any questions about the Corona Bonus or need further information. 

Click here to read alert in German. 

Contact Information
Dr. Philipp Maier LLM
Partner (Employment Law)
Vienna
philipp.maier@bakermckenzie.com
Philipp Stanek
Counsel (Tax Law)
Vienna
philipp.stanek@bakermckenzie.com
Victoria Fink
Associate (Employment Law)
Vienna
victoria.fink@bakermckenzie.com

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