The following features distinguish a freelance contract:
- Continuing obligation
- Lack of personal dependence or only to a limited extent
- No obligation to follow instructions
- Free of restrictions on personal conduct
- Performance of work can be independently controlled and amended at any time
- The essential resources are provided by the employer
- Payment of remuneration based on a working time, not the work performed
- Largely personal provision of the service
In general, these rules also apply to citizens and entrepreneurs from EU Member States in Austria.
The use of the term "contract for services" or "freelance contract" is fundamentally irrelevant. The decisive factor in each individual case is how the contractual relationship is actually structured and how the terms of the contract are handled between the individual contracting parties.
Essentially every service that can be provided based on an employment relationship may also be the content of a freelance contract. Only an assessment of the true economic content in the specific individual case can determine whether a contract for services or a freelance contract is in place.
Independent contractors enjoy only limited protection under labour law. The provisions of the Allgemeines Bürgerliches Gesetzbuch (ABGB - Austrian General Civil Code) on the termination of the employment relationship apply analogously to freelance contracts. Independent contractors who are fully insured in accordance with the Allgemeines Sozialversicherungsgesetz (ASVG - Federal Act on General Social Insurance) must receive a notice of employment, if a written contract does not exist.
However, without a corresponding agreement between the employer (client) and the independent contractor, the provisions of the Angestelltengesetz (Federal Salaried Employees Act), the Urlaubsgesetz (Federal Leave Act), the Arbeitszeitgesetz (Federal Working Time Act )(especially the overtime remuneration), the Arbeitsruhegesetz (Federal Act on Rest Periods) and the Entgeltfortzahlungsgesetz (Federal Continued Remuneration Act) do not apply.
Independent contractors are members of the chambers of labour and therefore have the opportunity to make use of all the service facilities provided by the chambers of labour, including legal assistance and legal representation.
Independent contractors are also included in the company’s employee pension and self-employed pension insurance scheme. Further information can be found in the section entitled "Redundancy payment (NEW)".
Independent contractors who are employed below the monthly de minimis threshold (marginally employed persons), must be registered for accident insurance by their employer before commencing their activities (registration of employees).
The de minimis limit for 2021 is 475.86 Euro (this was 460.66 Euro Euro in 2020).
Marginally employed independent contractors can also voluntarily register for health and pension insurance. The application must be submitted to the responsible health insurance provider.
Independent contractors whose monthly remuneration exceeds the de minimis threshold must register as independent contractors with the responsible health insurance provider. They are therefore covered by accident, health and pension insurance.
In the event of double or multiple marginal employment in accordance with the Dienstleistungsscheckgesetz (DLSG - Federal Service Voucher Act ), the special provisions on compulsory insurance apply.
Independent contractors whose monthly remuneration from a freelance relationship exceeds the de minimis threshold are also required to obtain unemployment insurance and insolvency remuneration insurance. As a result, they are entitled to unemployment benefits (→ oesterreich.gv.at) and insolvency remuneration under the same conditions as employees. Likewise, they can draw sickness benefits and receive a maternity allowance (→ oesterreich.gv.at) based on their income.
Applications for insolvency remuneration must be submitted to the responsible office of IEF-Service GmbH in accordance with the respective insolvency court.
Persons in multiple marginal employment relationships are entitled to sickness benefits and a maternity allowance (→ oesterreich.gv.at) provided that their total income exceeds the de minimis threshold of 475,86 Euro (for 2021). Persons in multiple marginal employment relationships are not obliged to obtain unemployment insurance and are not entitled to unemployment insurance benefits.
Compulsory insurance ends with the end of the employment relationship (or entitlement to remuneration).
Independent contractors are required to pay income tax, but not salaries tax, as they are treated as self-employed persons. They are independently responsible for paying income tax. The tax liability is based on the taxable annual income. If this exceeds 11,000 Euro the income from a freelance relationship must be taxed.
Independent contractors are entrepreneurs for the purposes of the Umsatzsteuergesetz (UStG - Federal Turnover Tax Act) and are subject to value added tax. For VAT-exempt small enterprises without credit, this has practically no or only a marginal impact, unless they opt for standard tax treatment (→BMF)German text.
The following taxes must be paid by the employer for independent contractors:
- Municipal tax
- Employer contribution
- Surcharge to the employer contribution
The following taxes do not need to be paid by the employer for independent contractors:
- Employer levy
- Tax assessment of income and value added tax based on a freelance contract (→BMF)German text
- "Social safeguards for independent contractors" brochure (→BMSGPK)German text
- Health insurance providers (→SV)German text
- → IEF-Service GmbHGerman text
- Allgemeines Bürgerliches Gesetzbuch (ABGB)
- Allgemeines Sozialversicherungsgesetz (ASVG)
- Dienstleistungsscheckgesetz (DLSG)
- Federal Ministry of Finance
- Federal Ministry of Labour