What You Need to Consider When Combining Employment and Self-Employment in Austria

Marta Srebrakowska

Feb 10, 2025

4 min read

Updated: Apr 23, 2025

In this article, you'll learn about:

Informing Your Employer and Reviewing Your Contract
Registering Your Business With the Authorities
How Taxes Are Calculated
Social Security Contributions (SVS and ÖGK)
Managing Taxes With Expenses and Flat Rates
Deadlines for SVS and Tax Payments
When Does It Make Sense to Keep Your Job?
Important Considerations Before Making the Leap to Full-Time Self-Employment

Reviewed by tax advisor Pascal Schraml

Combining Employment and Self-Employment in Austria

Watch our recent webinar with tax advisor Pascal Schraml: Combining Self-Employment and Employment in Austria - Costs, Social Security & Taxes

Informing Your Employer and Reviewing Your Contract

Before starting self-employment, check your employment contract for any restrictions. Many contracts include non-compete clauses that may limit your ability to run a business in the same industry. Even if no such clause exists, transparency with your employer can help avoid potential conflicts.

Registering Your Business With the Authorities

Starting self-employment in Austria requires registering with multiple institutions:

SVS (Social Insurance Institution for Self-Employed): Even if you are already insured through your employer, you must notify the SVS about your additional income source.
Tax Office (Finanzamt): You need to declare your self-employed activity within one month of starting, even if you already have a tax number. Your tax department will change from "Allgemeine Veranlagung (AV)" to "Betriebliche Veranlagung (BV)."
WKO (Austrian Economic Chamber): Depending on the nature of your self-employment, you may need to register your trade with the WKO.

Learn more about the registration process:

New self-employment (article)

Free Business Licence (article)

Regulated Business Licence (article)

Regulated Business Licence (webinar recording)

Starting out as a self-employed artist in Austria (article)

Applying for the Austrian Tax Number (article)

SVS - Registration & overview (webinar recording)

Understanding How Taxes Are Calculated

In Austria, income from employment and self-employment is combined and taxed as a single total. Key points include:

The standard tax-free allowance is €13,308 (2025), but this applies once to your combined income. Through a combination of tax credits, this can usually increase to about € 18.000 (or even more with children).
A progressive tax rate means higher earnings result in higher tax percentages.
If your total income exceeds €730 per year from self-employment, you are required to submit an annual tax declaration.
The tax office may request prepayments based on estimated earnings.

Learn how to fill out the income tax return form (tax declaration) Here!

Social Security Contributions (SVS and ÖGK)

Having a dual income means contributing to both the ÖGK (for employees) and the SVS (for self-employed). Key aspects to consider:

SVS contributions for self-employment are around 27% of your net income, covering health, accident, and pension insurance.
If your self-employment income is below around € 6.600 in profit, you may apply for an exemption from full SVS contributions.
Paying into both systems can result in a higher future pension, as all contributions are combined.
You can choose whether to use ÖGK or SVS for healthcare services (be aware of the 20% deductible when using SVS, though).

Learn more about the SVS:

Social Security Contributions – The Calculation after the Third Year (article)
The Social Security system in Austria – What do I receive for my payments? (article)
The Ultimate Guide to Calculating Social Insurance Contributions (article)
SVS - Costs and payment adjustments (webinar recording)

Managing Taxes With Expenses and Flat Rates

To reduce your taxable income, you can claim business expenses. Options include:

Actual cost deductions: Keeping track of every business-related expense.
Flat-rate deduction (usually 20 % of the income): A simplified method where a fixed percentage of your revenue is deducted. In addition to the flat-rate deduction, you can normally deduct three items:
- Arbeitsplatzpauschale of €25 per month (for those who are also employees)
- SVS contributions (if paid)
- 50 % of the annual public transport ticket (e.g. Wiener Linien, Klimaticket)

Choosing the right method depends on the nature of your business and expected costs.

Learn more:

Taxes: deductions explained (article)
VAT & Small Business Regulation (article)
VAT Return - Do It Yourself (workshop recording)

Deadlines for SVS and Tax Payments

Missing deadlines can lead to penalties, so it’s essential to stay on top of:

Quarterly SVS payments (March, June, September, December).
Annual tax declaration (usually due by June 30 for digital submissions, later if done with a tax advisor).
Income tax prepayments (Einkommensteuervorauszahlungen): In Austria, income tax prepayments are required if the tax office (Finanzamt) requests them based on your previous income tax assessment or estimated income. The deadlines for these prepayments are:
- 15th February
- 15th May
- 15th August
- 15th November

When Does It Make Sense to Keep Your Job?

Starting a business while keeping your current job can be a strategic move, offering both security and opportunities for growth. Here's a closer look at the considerations:

Advantages:

Financial Stability: Maintaining your job ensures a steady income, which can support you during the initial phases of your business when profits might be uncertain.
Risk Mitigation: By keeping your employment, you can test your business idea without the pressure of immediate financial success, allowing for adjustments as needed.
Skill Development: Balancing both roles can enhance your time management and multitasking abilities, which are valuable in entrepreneurship.

Disadvantages:

Limited Time and Energy: Juggling a job and a new business can lead to longer workdays, potentially causing fatigue and reducing the time available to focus on growing your venture.
Potential Conflicts: Managing responsibilities in both areas might lead to conflicts of interest or divided attention, impacting performance in either role.

Important Considerations Before Making the Leap to Full-Time Self-Employment

Transitioning from part-time to full-time self-employment is a significant decision that requires careful consideration.

It's essential to ensure that your business generates a consistent and sufficient income to support your living expenses and cover operational costs. Understanding your tax obligations and setting aside funds for them is crucial. Additionally, be prepared for the potential loss of employment benefits, such as health insurance and paid leave, and plan accordingly.

By thoroughly evaluating these factors, you can make an informed decision and ensure a smoother transition into full-time self-employment.