Austerity package 2027/28: What payroll accounting will have to prepare for now

At a press conference, the leaders of the three governing parties, together with the Minister of Finance, presented the planned key parameters of the dual budget for 2027/2028. In addition, further measures were announced via other communication channels. The changes relevant to payroll accounting primarily concern the following areas:

• Abolition of the non-cash benefit exemption for company electric vehicles: As an initial step, a low (not yet quantified) non-cash benefit value (“Sachbezugswert”) is to apply in 2027; from 2028 onwards, the non-cash benefit value for electric vehicles is to amount to 0.75% of the acquisition costs. The announcement of this measure has caused considerable controversy, as it comes completely unexpectedly and is widely perceived as a serious breach of trust: for years, the transition to e-mobility was politically promoted, and companies as well as employees were specifically incentivised to acquire and use electric vehicles—now the rules of the game are to be changed abruptly and the exemption abolished.
• Abolition of the tax and duty exemption for teleworking lump sums: This planned repeal is still under political discussion.
• Changes to the Family Bonus Plus: Minor adjustments may be introduced, for example a reduction for children aged four and above if only one parent is employed (single parents, however, would remain exempt). Further details are still pending.
• Elimination of age-related contribution exemptions: The abolition of the following age-related exemptions is currently under negotiation (presumably with effect from 2028): unemployment insurance contributions and IESG surcharge (previously exempt from age 63 or upon fulfilment of the requirements for certain pension schemes), employer contribution (DB), surcharge to the employer contribution (DZ) and accident insurance contributions (previously exempt from age 60). However, these measures have not yet been finalised.
• Reduction of the employer contribution to the Family Burden Equalisation Fund (FLAF – DB): The DB is to be reduced from 3.7% to 2.7% as of 2028. However, this relief is to be at least partially refinanced by abolishing the DB exemption for employees over 60, as outlined above.
• Extraordinary increase in the maximum contribution base: An increase by a factor of two is being considered. Whether and when (possibly as early as 2027) this will actually be implemented remains uncertain.
• Abolition of the reduced unemployment insurance contribution for low income earners: The income-dependent tiered reduction of employee unemployment insurance contributions for low earners (to 2%, 1% or 0%) is to be abolished as of 2027 and replaced by a uniform contribution rate of 2.95%. However, a multi-year transitional period is envisaged for existing employment relationships. Further details are still awaited.
• Reintroduction of a termination tax (“Auflösungsabgabe”): It is being reported that the termination tax, which was abolished at the end of 2019, is to be reintroduced in a modified form. The amount, exemptions and timing of entry into force remain unclear.
• Waiting period for unemployment benefits in case of mutual termination: A four-week waiting period for unemployment benefits is planned even in cases of mutually agreed termination of employment. However, the details have not yet been finalised.
• Extension of the suspension of indexation for family benefits: The suspension of indexation for family allowances, childcare benefits, etc. is to be extended until 2028.

Please note: At this stage, these are merely political announcements; many details remain open (in particular, the respective dates of entry into force). Concrete draft legislation has not yet been published—these are expected to be released for consultation in the second week of June (following the Finance Minister’s budget speech on 10 June 2026).