How are expenses processed in Austria?

Modified on: Thu, 25 Sep, 2025 at 2:16 PM

TABLE OF CONTENTS

Travel & Mileage Reimbursement
Public Transport & Other Travel Modes
Invoicing & Documentation
Per Diems & Accommodation
- International Per Diems
Representation Costs & Gifts
Wellness & Health Expenses
VAT & Compliance
- Compliance Checklist

This article outlines the updated rules and best practices for expense reimbursement in Austria.

Travel & Mileage Reimbursement

Mileage Allowance

Employees using their private vehicle for business travel may receive a tax-free mileage allowance of €0.50/km, applicable to cars, motorcycles, bicycles, e-bikes, and even walking. An additional €0.15/km may be claimed for each passenger transported.

Conditions for tax exemption:

The trip must be business-related.
The employee must bear the vehicle’s operating costs.
A logbook or equivalent documentation must be maintained.
The allowance is capped at 30,000 km per calendar year.

Covered expenses include:

Fuel, oil, depreciation
Repairs, servicing
Insurance, taxes, tolls
Parking fees, winter equipment
Navigation systems, car radios
Club memberships and financing costs

Important: If the mileage allowance is claimed, parking and tolls cannot be reimbursed separately.

Public Transport & Other Travel Modes

Employees may be reimbursed for actual ticket costs for trains, buses, trams, taxis, and rental cars. If receipts are unavailable, a transport allowance may apply:

€0.50/km for the first 50 km
€0.20/km for the next 250 km
€0.10/km for each additional km

These reimbursements are tax-free if incurred in the employer’s interest and properly documented.

Invoicing & Documentation

Required Documentation

To ensure tax-free reimbursement:

Submit a monthly travel expense report. Refer to the sample attached at the bottom of this page.
Include receipts for all expenses.
Receipts must list the company name and tax ID where applicable.

Thresholds: There is no minimum threshold, receipts are always required unless a flat rate applies under a collective agreement.

Per Diems & Accommodation

Domestic Per Diem Rates (2025)

€30/day for meals (up from €26.40)
€17/night for accommodation (up from €15)

Partial day rates apply based on trip duration:

3–4 hours: €10
4–5 hours: €12.50
5–6 hours: €15
…up to €30 for >11 hours

Meal deductions:

If one meal is provided: deduct 50%
If two meals are provided: deduct 100%

International Per Diems

Rates vary by country and are prorated similarly. The maximum per diem per day is 12/12ths of the applicable rate.

Representation Costs & Gifts

Tax Deductibility Rules

Representation expenses (e.g., client meals, gifts) are generally non-deductible unless:

A clear advertising purpose is proven.
The business motive predominates.
Detailed records are kept (names, purpose, date).

Deductibility:

50% of hospitality costs may be deductible with proof.
100% deductible only if hosting is integral to the service sold.
Low-value promotional items (e.g., branded pens) are fully deductible.

Non-deductible examples:

Social events (birthdays, concerts)
Mixed business/private occasions
Gifts like wine, flowers, event tickets

Wellness & Health Expenses

Wellbeing allowances (e.g., gym, therapy) are subject to income tax and social security contributions. They are not tax-exempt.

VAT & Compliance

VAT is not applicable on reimbursed employee expenses.
Employers must retain verifiable records (receipts, travel logs).
Payments must reflect necessary and average costs to qualify as true reimbursements.

Compliance Checklist

Pay only collective agreement-conforming rates.
Archive all receipts unless flat rates apply.
Review flat rates annually.
Reclassify excessive allowances as taxable.
Disclose all allowances transparently on payslips.

Attachments (2)

xlsx

Sample trave....xlsx
14.3 KB

pdf

Collective a....pdf
77 KB

In this article...

Austria