Expansion of tax benefits for employer-funded public transport tickets

Before the change, employers were permitted to provide an employee with a public transport ticket, tax free, for journeys between their home and place of work only. In order for the “Jobticket” benefit to be treated as tax exempt, the employer had to pay the public transport operator directly for zone tickets. However, if the employer compensated the employee for ticket costs, the benefit would be taxable.
New rules effective 1 July 2021

• Weekly, monthly or annual pass instead of zone ticket
  As of the beginning of July 2021, employers are also permitted to cover the costs for a weekly, monthly or annual mass-transit pass for employees, tax-free, as long as the pass is valid where the employee lives or works.
  Example: An employee lives in Vienna and works in St. Pölten. Their annual pass for public transport in Vienna can be covered tax-free, since it is valid in their place of residence. The tax exemption is conditional on passes being valid for journeys within an extended period of time. Single tickets and day passes therefore do not qualify for tax exemption.
• Cost reimbursement instead of providing tickets directly
  Tax-exempt reimbursement of costs is now also permitted. The employer may reimburse the costs of passes fully or partially, as long as they were purchased after 30 June 2021 (i.e. for weekly, monthly and annual tickets newly purchased or extended on or after 1 July). Costs reimbursed for passes that are valid beyond 30 June 2021 but were purchased before 1 July are still subject to payroll taxation.
  Example: If an employee already has an annual pass, valid from 1 September 2020 to 31 August 2021, and the pass is renewed for a year from 1 September 2021, reimbursement of the renewal by the employer is tax exempt. No tax exemption can be claimed for July or August 2021.

“Öffi-Ticket” and “Pendlerpauschale”
If an employer provides an employee with a weekly, monthly or annual pass, the commuters’ flat-rate tax allowance (Pendlerpauschale) can only be claimed for the part of the journey that is not covered by the pass.
Example: An employee lives in St. Pölten and works in Vienna’s first district. They travel daily by S-Bahn railway to Wien Hütteldorf station, then on the U4 underground line to the city centre. The employer reimburses the employee for the costs of a public transport pass for Vienna, but not for Lower Austria. The employee can take advantage of the commuters’ flat-rate tax allowance between St. Pölten and the first station within the zone covered by the Vienna annual pass (city limit station: Purkersdorf Sanatorium).
Please note that employees do not have an automatic legal entitlement to public transport costs being covered by the employer.