Vienna expands employer levy to fund subway construction

Vienna plans to broaden its employer levy to raise an additional 17 million euros a year for subway construction, ORF reported. The change would bring free service contracts into the levy and end an age exemption.

The levy has been in place since 1970 and is earmarked for subway construction. Employers pay 2 euros per person for each working week; the rate will remain unchanged, the office of Finance Councillor Barbara Novak told the APA news agency.

Including free service contracts would bring the levy into line with the existing rules for municipal tax, which already cover those workers, according to the city. The city also said the number of employees aged 55 and over had recently increased. Removing the age exemption would bring those employment relationships into the levy as well.

The additional revenue is intended in part to offset inflation-driven increases in the cost of expanding Vienna’s public transport network. Work is under way on a new section of the U2 line and on construction of the U5.

The proposed legislation is under review, and the city plans to implement the change in the first quarter of 2027. The exact start date has not been set.