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One of the reasons why the topic of self-employment in Austria seems to be quite complex is that instead of one general category of self-employment, according to social insurance laws, there exist several categories and therefore different costs, rules, and laws that apply to each of them.
In Austria, you can be self-employed:
First things first: what exactly is new self-employment?
From all the types of self-employment in Austria mentioned above, new self-employment is probably the least common type.
New self-employed are those working independently who don’t need a business licence registration for their professional activity. In other words, trade regulations do not apply to new self-employed. This also means that new self-employed individuals are not members of the Chamber of Commerce (WKO) and no membership fee applies. New self-employed professionals have no advocacy group to whom they can turn. They have to register at the Tax Office (Finanzamt) and are subject to income tax, so they have to file an income tax return every year. They pay insurance contributions to the SVS, but since in their case, the insurance costs depend on their gross income, they might or might not have to pay contributions to the social security institution. If they fall under a specific amount of gross income, their insurance contributions are voluntary - they can opt in for health, accident, and pension insurance.
Examples of professions that fall under the category of new self-employment:
psycho- and physiotherapists.
Other characteristics of the new self-employed individuals are:
they mostly use their own operating resources,
their services are specified in work contracts,
they are not members of the Chamber of Commerce,
limited working partners and personally liable partners of partnerships can be new self-employed,
managing partners of a GmbH (a limited liability company) are also in this category of self-employment - if they are not insured as employees.
Would you like to learn more about new self-employment? We wrote 23 chapters related to this category. Have a look HERE.
Owning a business licence brings the right to carry out commercial activities. There are two types of business licences in Austria - free and regulated. To acquire each of them one has to fulfil requirements related to residence, age, and criminal record. Those are all the requirements needed for a free licence, but to get the regulated licence you need to prove qualifications (education and working experience) or pass an exam. Both types have a yearly fee.
Whether you need a business licence or not depends on the nature of your job, not on the income.
Most professions require a business licence registration - for example, builders, IT workers, commercial agents, masseurs, carpenters, financial advisors, management consultants, insurance agents, insurance brokers, translators, and even proofreaders.
In order to figure out whether you need a business licence or not, just ask the Chamber of Commerce by email, phone call, or personal visitation (often communication in English is possible).
There are also official lists of professions that fall under free and regulated business licences:
List of regulated licence professions: HERE
Our guidebook on Free Business Licence you can find HERE.
Liberal professions are those that require special qualifications but are not subject to commercial law. Access to this category of self-employment is by no means easy and can be costly.
An academic degree and a few years of professional experience are usually required to carry out these activities independently.
Members of the liberal professions perform their services themselves due to their special qualifications. They are fully responsible and professionally independent.
The liberal professions are usually organized either in chambers or in professional associations.
Examples of liberal professions:
There is no legal definition of independent contractors (Freie Dienstnehmer), but the type of contract (Freies Dienstverhältnis) is regulated by the Social Insurance Act (ASVG). According to this Act, an independent contract exists if, for a fee, someone undertakes to provide his client with his workforce for a certain or indefinite period.
It is essential for the independent employment contract that the employee makes his workforce available on a temporary basis. The independent contractor can mainly work with the client's resources.
Independent contractors are insured by Austrian Health Insurance (ÖGK) and do not have to worry about insurance payments - the client covers those. However, as an independent contractor, you are subject to income tax and you have to also file a tax return every year.