Tax Figures
Corporate Income Tax
25% on taxable profits
Income Tax Rate
- 1-11,000: 0%
- 11,001-25,000: 36.5%
- 25,001-60,000: 43.21%
- 60,001 and over: 50%
Income tax is charged at progressive rates and entitles to a basic tax-free allowance and deductions (which may vary depending on personal circumstances).
The employer deducts tax from your salary and remits it to the tax authorities on behalf of employees.
Tax returns are due by 30 April — but you only need to file one if you earn over a minimum amount from sources other than your employment or you are employed by 2 or more employers at once.
Sales Tax
VAT: 20%
Withholding Tax
- Dividends 25%;
- Interests 0%/25%;
- Royalties 20%.
Other Tax
- Municipal Employees Tax: 3% calculated on gross salaries;
- Contribution to Pension Fund: 1.53% calculated on gross salaries;
- Contribution to the Chamber of Commerce: 0.44% calculated on gross salaries;
- Tax on insurance contracts: 1% & 11% calculated on insurance premium.
Time to prepare and Pay Taxes
131 Hours
Tax Returns Supplied
Yes
Employers Social Security and statutory contributions
21.76% calculated on gross salary
Payroll
In 2015, the Austrian Council of Ministers announced few key elements of the upcoming tax reform. In particular, the progressive income tax scale shall lead to overall tax relief of approximately €5 billion. Moreover, the reform will increase the withholding tax on capital income, including dividends and capital gains, from 25% to 27.5%. An exception to this increase applies to interest income from bank deposits.
Remote Payroll
A remote payroll system is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Austria. Under Austrian Law, companies registered in other countries are allowed to obtain a license to do business and have employees in the country.
Local Payroll Administration
In some cases, a company will register their business in Austria under one of the forms available: Limited liability companies; Public Companies; Partnerships; Foreign branches
but prefer to have another company administering its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Internal Payroll
Larger companies with a commitment to Austria may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage an Austrian payroll, and can fulfil all tax, withholding, and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Austrian employment laws.
Currency
EURO
