Flat Tax for Working in Retirement from 2026 is Uncertain

A central point of contention is whether the flat tax for work during retirement should apply exclusively to employees, as proposed by Finance Minister Markus Marterbauer (SPÖ). The ÖVP, on the other hand, demands that freelancers should also benefit from the lower tax rate.

Flat Tax for Work During Retirement Under Scrutiny Due to Budget?

When asked about the flat tax, Vice Chancellor Andreas Babler (SPÖ) and Minister of Economic Affairs Wolfgang Hattmannsdorfer (ÖVP) on Tuesday referred to the "many agenda items" at the Council of Ministers. Foreign Minister Beate Meinl-Reisinger (NEOS) also did not directly address the flat tax, but rather the budget situation. "It is no secret that we need clarity in the areas of consolidation, the stability pact, and especially the overall state deficit." They want and need to handle taxpayers' money responsibly. However, the minister did not reveal whether the flat tax is under scrutiny for budgetary reasons.

SPÖ-Affiliated Pensioners' Association Views Flat Tax for Work Critically

The social democratic Pensioners' Association (PVÖ) expressed criticism of the plan in a statement, calling it an "ÖVP prestige project." A flat tax would primarily benefit "top pensioners, the self-employed, and those with high additional earning potential," while the majority of pensioners would not gain any advantage. "A tax allowance based on the social security contributions made would be a fair alternative for everyone," demands PVÖ President Birgit Gerstorfer.

Flat Tax for Work During Retirement Would Cost 300 Million in 2026

The government program of ÖVP, SPÖ, and NEOS stipulates that "the additional income of employees will be taxed at a final rate of 25 percent" if they continue to work during retirement. Employees should also be exempt from social security contributions, while employers should only pay half the contribution. "The cap for the preferential income is yet to be clarified," states the coalition agreement. The cost to the state budget is estimated at 300 million euros for 2026. In 2027, it is expected to be 470 million.

(APA/Red)

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