Company parking spaces: Still free of charge, or will fees soon apply?
The extension of the parking space management scheme in Vienna means that employees may face additional costs from March 2022 as a result of the recognition of a benefit in kind for company parking spaces that were previously free of charge.
What will change
In only a few days time, from 1 March 2022, the long anticipated extension of Vienna’s parking space management scheme will become a reality. Drivers will subsequently have to pay for parking in the city’s 11th, 13th, 21st, 22nd, and 23rd districts. On working days, parking in the whole of Vienna will only be permitted with a permanent parking permit (‘Parkpickerl’) or a valid parking coupon (‘Parkschein’). Exceptions to this rule only apply in a small number of commercial and industrial areas.
Parking management schemes are currently also being introduced in other municipalities, particularly those near Vienna (e.g. Schwechat, Baden, …).
Company parking space as a benefit in kind
If the employer provides his/her employees with a parking garage or other parking space, this constitutes a benefit arising from employment that is subject to tax and related contributions. In accordance with the Austrian Ordinance on Non-monetary Remuneration Values, a monthly benefit in kind must be recognised in payroll in the amount of EUR 14.53 gross. This applies irrespective of the specific parking model, i.e. to both directly allocated parking spaces and parking in a shared car park. No distinction is made between parking a company car or a private vehicle during working hours. The only circumstances in which no obligation to recognise a benefit in kind exists is if company parking spaces are only used outside of the hours during which charges apply. In Vienna, for example, this will only apply to night shifts or weekend shifts, meaning that a benefit in kind will need to be recognised for the majority of employees who are able to use a company parking space.
The current extension of the parking space management scheme will now create additional logistical challenges for many employers. Companies need to check whether their parking spaces are located in the area subject to the scheme. If yes, then a benefit in kind of EUR 14.53 gross per month for the company parking space will need to be recognised in payroll – starting in March 2022 in the case of Vienna. Due to the benefit in kind, the employees concerned will then also be subject to additional costs (social security contributions and wage tax) for the parking space that was previously free of charge. In addition to the need to inform employees, it seems likely that the change might cause debate between employers and some employees.
Authors: Martina Limbeck, Stefan Litzenberger