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WORKING IN AUSTRIA

Can I work for my foreign employer as a self-employed person in Austria?

Setting yourself up as self-employed in Austria is a fairly complicated process, which means you can't necessarily continue doing the role you did in your previous country.

Can I work for my foreign employer as a self-employed person in Austria?
Even if you and your employer both want to continue working together after your move to Austria, you still have bureaucratic hoops to jump through. Photo by Tima Miroshnichenko from Pexels

As part of our service to our readers and members, we often answer questions on life in Austria via email when people get in touch with us. 

When these have value to the greater Local Austria community, we put them together as an article, with ‘reader question’ in the headline. 

Have you got a question, query, comment or issue to raise? Get in touch at [email protected]

I’m moving to Austria for my partner’s job, and I’d like to continue working for my current employer. They don’t have an office in Austria but they are happy for me to work remotely. Can I do this on a self-employed basis?

This is a situation many foreign residents may find themselves in, if you’re moving to Austria for a reason other than your own work, so we’ll look at a few scenarios. 

The simplest case is if your employer is already established in Austria. In this case, it may well be possible for you to be employed by their Austrian entity, either through an internal transfer or by applying for a job there.

READ MORE: How to prepare for your Austrian tax return if you’re self-employed 

Even if their Austrian branch is in a different city or region to the area you’re moving to, it would be possible for them to employ you from the perspective of Austrian employment law, so it’s just your company’s policy you’d need to look into.

If your employer is not established in Austria (ie. does not have its business registered there and does not pay taxes to Austria), things will be trickier.

The key issue is not whether your employer already does business with Austria-based clients, but whether the employer themselves is registered in Austria.

In that case, your employer cannot directly employ you if you are registered for tax purposes in Austria.

What if my employer is not registered in Austria?

Assuming that you are registered in Austria, that leaves you with two main options.

The first is to become self-employed. There are set processes for this in Austria, including getting a trade licence (Gewerbeschein) for some types of professions, and registering with social security (SVS) and the tax office (Finanzamt).

READ MORE: Everything you need to know about becoming a freelancer in Austria

If you are able to establish yourself as a self-employed worker in Austria, you could work for your former employer, but you’d need to ensure you met Austria’s strict conditions for true self-employment.

When you register, SVS will ask you questions about your work to determine which category of employment you fall into.

You and the company you work for cannot decide this; it’s up to SVS who use a range of criteria to assess the working relationship.

The reason for this is to avoid “bogus self-employment” where companies do not pay taxes in Austria but hire people under conditions that effectively amount to employment.

“Signs for an independent business are: having more than one client; not being dependent on the “employer”; having your own structure/not being part of a corporate work structure (in terms of workflows, reporting etc); having your own work materials; having the right to be substituted by someone else (to carry out the work set); issuing invoices after completing a project rather than issuing the same amount on a monthly basis,” explains Claudia Barton, a tax consultant who specialises in working with expat clients.

There’s no one criteria which will determine your employment status, so SVS will make an overall assessment.

This means that if you want to continue working for your former employer as a self-employed person, you would need to look over the contract very carefully and would most likely need to make some changes to your working relationship, including the workflow and work structure as explained by Claudia above.

Note also that taxes and especially social security contributions are quite high for self-employed workers in Austria. A rule of thumb commonly cited by self-employed people is to set aside 50 percent of your income to pay business-related fees.

Depending on which country you worked in before, this may mean that you need to charge your former employer higher rates; when you were an employee, in most countries it will be the case that they were paying social security contributions and taxes in addition to the fees you paid, whereas self-employed people shoulder all these payments and need to adjust their rates accordingly.

READ MORE: How to survive as a freelancer in Austria

Pros of this approach are the increased flexibility, and the opportunity to add new clients to your roster, but the downsides are that your role may not work on a self-employed basis of it was designed as an employee role.

If you’re new to self-employment in Austria, it is highly advisable to seek help from a tax advisor and/or other advice services such as the Expat Business Agency in Vienna if that’s where you’re based.

There is an alternative option which some expats choose to take: using an umbrella company or employer-of-record. In this scenario, you are officially employed by one company which hires you out to the company you want to work for.

The employer-of-record charges a fee to your ’employer’ to cover a salary which is paid out to you, the necessary employer taxes and social security contributions, and usually a fee.

As an example, the umbrella company Oyster HR has a salary calculator, which shows that to pay someone the equivalent of a €40,000 gross annual salary, the company would need to pay €4,992 each month.

This is the route which British national Tom Barron took after moving to Vienna in 2019. He initially worked for multiple clients on a self-employment basis, but slowly began to spend most of his time working for one company.

Telling The Local why he chose to go down this route, he explained: “Having had a mix of experiences, both employed and self-employed, I decided I would like to establish a consistent income. Also, I had learned from my self-employment experience that I needed to improve my German before doing my own taxes and paperwork again. I found it difficult to manage self-employment with my own German level and so then having an umbrella company do this, whilst little changes were made to my day to day work, made total sense.”

EXPLAINED: How freelancers in Austria can pay four times less in social insurance

His client spoke with the umbrella company (it’s usually the employer who needs to do this, rather than the person who will become their employee) and received a contract which his legal advisor reviewed.

He notes: “If you have various projects from various companies, self-employment will usually work just fine. If you plan on working for one foreign company, it’s safer to go through an umbrella company.”

Advantages of this option include the limited paperwork and administration compared to self-employment, and accessing the benefits that come with being an employee. 

Useful links

Examples of umbrella companies operating in Austria: Deel, OysterHR, Remote

Self-Employed in Austria

Vienna Business Agency

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For members

LIVING IN AUSTRIA

How much do you need to earn for a good life in Austria?

Austria is known as a country with a high standard of living, but it also comes with a high cost of living. Here’s an overview of what you can expect to earn in Austria.

How much do you need to earn for a good life in Austria?

As with most things in Austria, the question of ‘what is a good salary?’ is difficult to answer as the cost of living (and wages) can vary between states and cities.

For example, the east of Austria is typically much cheaper than the west for housing (with the exception of Vienna). And those living in cities often have easier – and cheaper – access to public transport when compared with people living in rural areas. 

READ ALSO: ‘Bad-tempered locals’: Vienna ranked the world’s ‘unfriendliest city’

Childcare is also something to consider with huge differences between Vienna, where there is access to heavily subsidised services, and places like Tyrol where childcare costs more.

To delve a bit deeper, we looked at the data to find out the average salary in Austria and how it differs between professions and locations.

What is the average salary in Austria?

In 2021, the average gross annual salary in Austria was €44,395, according to the latest data from Statistics Austria

However, in the latest survey by online job platform Step Stone, the average gross annual salary in Austria is €49,609.

The Step Stone survey then broke it down further by industry with those working in pharma earning the most at €60,504. This was followed by energy at €60,345, medical technology at €59,106 and banking at €58,711.

The industry with the lowest average annual salary is hotels/gastronomy at €37,546, followed by agriculture at €39,779 and tourism at €43,965.

FOR MEMBERS: REVEALED: The best and worst districts to live in Vienna (as voted for by you)

Occupation also plays a part with people working in management earning the most – on average €66,768. Consulting came second at €53,721.

And like many other European countries, the gender pay gap in Austria prevails. The average annual salary for a man is €52,633 and for a woman it is €44,330.

Furthermore, the top earning city in Austria is Bregenz in Vorarlberg with an average annual salary of €54,620. When comparing the west of Austria with the east, the median salary in Vorarlberg is €46,450, whereas in Burgenland it is just €39,100.

What is the average cost of living in Austria?

Many international residents will find everyday living costs in Austria to be expensive, especially for those that come from countries with a much lower cost of living.

Inflation has also been rising steadily in Austria throughout 2022, leading to some steep rises in prices for groceries, housing costs and energy.

READ MORE: EXPLAINED: 10 ways to save money on your groceries in Austria

However, the average cost of living varies across the country, depending on the location. For example, Vienna and Innsbruck in Tyrol are two of Austria’s most expensive cities, but more affordable places to live are Graz in Styria and Klagenfurt in Carinthia.

In Vienna, the average price for a one bedroom apartment in the city centre is €915, going up to €2,000 for a three bedroom apartment, according to Expat Arrivals.

Whereas in Graz, the average cost of a one bedroom city centre apartment is around €609, and a three bedroom apartment is €1,170.

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