New social security flat-rate tips for employees in the hotel and hospitality industry starting 2026

The current system of flat-rate tipping for social security purposes is not only complicated and confusing, but also leads to legal uncertainties in practice. Recently, companies have repeatedly been confronted with additional contribution claims from the Austrian Health Insurance Fund (ÖGK) in the context of payroll tax audits if tips in individual cases were demonstrably (e.g., in the case of credit card payments) or, based on estimates, significantly higher than the respective flat-rate tips set by the social security institutions, which vary from state to state. After lengthy negotiations, the government and social partners have now agreed to amend the legal basis for flat-rate tips as of January 1, 2026. In the hotel and hospitality industry, a concrete agreement has already been reached on uniform flat-rate tips throughout Austria as of January 1, 2026.

Amendment to the ASVG and AVRAG (affects all “tipping industries”)

A legal basis for setting uniform nationwide flat-rate tips is being created. The relevant amendment to the ASVG, which is currently under review (until September 8, 2025), is naturally of particular importance to the hotel and hospitality industry, but also applies to other industries where tips are common. The legal framework for tipping regulations is to be amended in several respects from January 1, 2026:

• No social security contributions for tips exceeding the flat rates: The law clarifies that the flat rates are maximum amounts. This means that tips actually received can only be used if they are less than the flat rate. Therefore, even if the actual tip is demonstrably higher than the respective flat-rate amount in individual cases, it will no longer be used as the basis for social security contributions from January 1, 2026.
• “Amnesty for the past”: For periods prior to January 1, 2026, the social security institution's right to determine contributions for tips that exceed the flat rate expires on January 1, 2026. However, this is subject to the insurance institution announcing new flat-rate tips (based on the new legal situation) by September 30, 2026. If prescriptions or subsequent adjustments have already been made, possible cases of hardship with regard to subsequently adjusted tip-related contributions must be examined by the social security institution (usually ÖGK) within the framework of self-administration; however, the contribution bases of the insured persons remain unaffected in this case.
• Fixed tips should only be set for employees who usually receive tips or share in tips within the company (e.g., when tips are distributed via a company tip pool system).

An accompanying labor law regulation stipulates new information obligations for companies from January 1, 2026: All employees who participate in a tip distribution system must be informed of the distribution key at the beginning of their employment (in the case of existing employment relationships, the information must be provided promptly after January 1, 2026). In addition, from January 1, 2026, all employees who receive cashless tips or share in them will have a right to information about the amount of cashless tips (Section 2j AVRAG in the planned version). Collective agreements may lay down more detailed rules for the implementation of this right to information. This provision is intended to promote transparency in the workplace and give employees a better overview of tips.

Link to the draft law on social security flat-rate tips at::

https://www.parlament.gv.at/gegenstand/XXVIII/ME/37

Special social partner agreement for the hotel and hospitality industry

In the hotel and hospitality industry, the following nationwide uniform flat rates for tips subject to social security contributions will apply from January 1, 2026, as agreed by the social partners (on a full-time basis; for part-time work, the flat rate is to be applied on a pro rata basis):

For periods of absence exceeding one month, the flat rate subject to social security contributions does not apply.

Additional note on tax exemption for tips

The Federal Ministry of Finance (BMF) recently added two points to the explanations on the tax exemption of tips in the wage tax guidelines (LStR):   

• Marginal number 92d LStR: When checking whether tips are customary in the locality, the ratio of the amount of the tip to the wages of the individual employee is not decisive.
• Marginal number 92f LStR: Tips that are collected as part of a tip distribution system (such as a tronc system) and distributed to employees according to a predetermined formula, regardless of whether this is agreed verbally or in writing (e.g., in the employment contract), are also exempt from tax.

These textual additions appear to be a response by the Federal Ministry of Finance (BMF) to individual rulings by the Federal Finance Court (BFG). In one specific case, for example, the BFG had ruled that a tip amounting to 25% of gross wages could no longer be considered customary for the location. In another case, the BFG ruled that tips that are distributed among the workforce internally according to a specific formula should be treated as taxable wages.

Conclusion: The BMF thus expressly rejects the BFG interpretations cited. It remains to be seen whether the BMF's legal opinion will be reinforced by a legal clarification, as demanded in political discussions (which would be highly desirable in terms of legal certainty in practice).

Revised version of L16 (annual salary statement) for 2025

The annual salary statement L16 for the calendar year 2025 has been revised and recently published in connection with the tax-free employee bonus for 2025:

• On the one hand, there is a separate line for the preliminary column for code number 243 with the designation “Employee bonus in accordance with § 124b Z 478,” and
• on the other hand, the passage “§ 124b Z 478” has been added to code number 226 (which deals with social security contributions that are not deductible for tax purposes) – this implicitly confirms the assumption already circulating that, in the opinion of the tax authorities, social security contributions attributable to tax-free employee bonuses should not be tax-deductible.