Austria’s Teleworking Act - New challenges for cross-border working situations
A new Teleworking Act (Telearbeitsgesetz, TelearbG) came into force in Austria on 1.1.2025; this has extended and updated the previous rules about working from home. The changes affect not just Austrian employees, but also German nationals who work for Austrian companies - this is therefore a relevant issue for many employers in the border regions.
Teleworking in Austria
The definition of teleworking in the TelearbG is more comprehensive than before. It includes not just working from your own home, but also from cafés, parks, co-working spaces or holiday destinations. The prerequisite for this is a written agreement between the employer and employee. The legislation makes a distinction here between teleworking in the narrow sense (e.g., from home) and teleworking in the broader sense (e.g., from a café).
This plays a significant role for accident insurance cover. Full accident insurance cover will apply when working from home, while insurance cover when working remotely in the broader sense will apply to a limited extend and not for accidents on the way there. For this reason, it will be necessary to agree beforehand, in writing, the permitted work locations for teleworking.
Tax treatment under the cross-border worker regulations
The DTA between Germany and Austria plays a crucial role for German employees who work for Austrian firms. It regulates which country has the right to tax income and thus prevents the double taxation of employees.
The cross-border worker regulations in the DTA affect employees whose places of residence and places of work are within 30 km of the border. In the original version, a daily commute was the prerequisite for cross-border workers. A maximum number of 45 non-return days (e.g., sick leave, holiday) were deemed to be not harmful to this status. Days spent working from home were likewise originally considered to be non-return days. The regulations were simplified via an amendment in 2024. Days spent working from home within the border zone are no longer deemed to be ones that need to be added on to the non-return days. If there is an appropriate agreement with the employer, it is permitted for work to be performed from, for example, a co-working space that lies within a 30km corridor.
Activities outside of the border zone would then remain not harmful if these did not exceed 45 days. If the employment relationship commenced during the course of the year, then the number of days would be lower. Where applicable, the figure for the permissible amount of working days that may be spent outside of the border zone is 20%.
If this limit is exceeded then the cross-border worker status would be terminated. Subsequently, the working days would be taxable on a pro rata basis in the respective countries where the work has been performed. The monthly payroll accounting has to be apportioned accordingly. The right to tax remains with Germany for teleworking days where activities are performed in Germany. To ensure this, employees must continue to provide the tax office at the place of residence with a cross-border worker’s certificate.
If Art. 15/6 of the DTA-Austria does not apply then a certificate of residence ZS-QU1 from the tax office at the place of residence has to be provided. This certificate will confirm to an Austrian employer that the employee is taxable on a pro rata basis in Germany. Furthermore, the requirement to split the salary can result in an obligation to submit a personal tax return both in the country of residence as well as in the country where the employer is based.
Example: To determine the actual number of working days in the case of several employment relationships within a year, the Memorandum of Consultations provides the following example: “B is resident in Austria and has his year-round principal residence in Austria close to the border. He is employed, in the period 1.1 – 11.5., in the context of an employment relationship with a habitual place of work within the border zone (with 80 actual working days) and, in the period 10.9 – 31.12., in the context of another employment relationship with a habitual place of work within the border zone (with 70 actual working days). When determining the actual number of working days, the employment relationships have to be considered separately. This means that for the first employment relationship there are 80 actual working days that need to be taken into account and, for the second employment relationship, 70 actual working days.
Specificities under social security regulations
The obligation to pay social security contributions is in line with the European regulations. The following basically applies - those who spend at least 25% of their working time teleworking in their country of residence (Germany) are obliged to pay social security contributions in their country of residence. Where the proportion is lower, as a general rule, they will be subject to the social security system in the employer’s country (Austria). Since July 2023, with a view to simplifying matters for the employer, it is possible to agree that if up to 50% of the work is performed in the country of residence, then the obligation to pay social security contributions in the country where the employer is based will continue to apply.
For certain arrangements there are framework agreements between EU countries that allow exceptions. For temporary (tele)working of up to 24 months in a third country, the obligation to pay social security contributions often remains in force in the employer's country.
