Shortly after the Finance Minister’s budget speech, the government bill on the Budget Accompanying Act 2027–2028 was published. Find the key points relevant to payroll summarised in our overview.
1. Unemployment insurance contribution for low-income earners
For new entrants starting on or after 1 January 2027, the reduced unemployment insurance (ALV) contribution tier for low incomes will no longer apply. This means that instead of the previous employee contribution shares of 0%, 1%, or 2%, the regular contribution rate of 2.95% will then apply.
For employment relationships that began before 1 January 2027, a multi-year transitional arrangement has been put in place:
| ALV employee share | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | from 2032 |
| previous 0% tier | 0 % | 0.5 % | 1 % | 1.5 % | 2 % | 2.5 % | 2.95 % |
| previous 1% tier | 1 % | 1.5 % | 2 % | 2.5 % | 2.95 % | 2.95 % | 2.95 % |
| previous 2% tier | 2 % | 2.5 % | 2.95 % | 2.95 % | 2.95 % | 2.95 % | 2.95 % |
2. Unemployment insurance contribution and IESG surcharge for older persons
As of 1 January 2027, the general ALV exemption for persons aged 63 and over will no longer apply. The employer’s share of the unemployment insurance contribution must then continue to be paid until the requirements for a pension are met. In addition, the IESG surcharge exemption for persons aged 63 and over will also be abolished as of 1 January 2027.
3. ASVG maximum contribution basis
Extraordinary additional increases to the maximum contribution basis are envisaged:
- 2027: + € 150 per month (€ 5 per day)
- 2028: + € 50 per month (€ 1.67 per day)
4. Teleworking flat-rate allowance (Telearbeitspauschale)
As of 1 January 2027, the exemption from charges and the tax deductibility of teleworking flat-rate allowances will no longer apply.
5. Family Bonus Plus (Familienbonus Plus)
New, more restrictive rules will apply to the allocation of the Family Bonus Plus between the eligible parties as of 1 January 2027:
If the child has reached the age of four and there is no other child in the household who is no older than four years of age, the Family Bonus Plus can, as a rule, only be split in a ratio of 75% to 25% or 50% to 50%. The option that has existed until now, whereby one of the eligible persons claims 100%, will no longer apply. This measure is intended to strengthen the incentive to bring people into employment.
6. Benefit-in-kind obligation for company electric vehicles
The Benefit-in-Kind Valuation Ordinance (Sachbezugswerteverordnung) is to be amended. The previously announced abolition of the zero benefit-in-kind value for privately used company electric vehicles is now provided for in this draft amendment. The monthly benefit-in-kind value will then amount to:
- 2027: 0.375% of the acquisition cost (maximum € 180)
- from 2028: 0.625% of the acquisition cost (maximum € 300)
7. No adjustment of family, social, and health insurance benefits in 2028
The adjustment of family allowance, childcare allowance, family time bonus, sickness benefit, rehabilitation benefit, and reintegration benefit will also be suspended for the year 2028.
8. Employer contribution (DB) to the FLAF
- The DB will decrease from 3.7% to 2.7% as of 1 January 2028.
- The DB exemption for persons aged 60 and over will no longer apply as of 1 January 2028.
Your Hübner & Hübner Payroll team will, of course, implement all measures that come into force in the payroll accounting on your behalf.
Note: This is currently a government bill (draft). Changes during the further parliamentary process are possible – we will keep you up to date.
>> Link to the draft of the Budget Accompanying Act 2027-2028
Do you have questions about the planned changes, or would you like to know what they mean specifically for your business? We are happy to assist you with the assessment and preparation – simply get in touch with us.