Types of self-employment

Types of self-employment

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 as a “new self-employed” (Neue Selbständige), “liberal professional” (Freiberufler), a self-employed with a “free” or “regulated” business licence (Freie/ Reglementierte Gewerbe), and as an independent contractor (Freie Dienstnehmer).  

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 are not members of the Chamber of Commerce (WKO) and no membership fee applies - new self-employed have no advocacy group to whom they can turn. They are professionals who are registered 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. The possibility of exclusion from insurance costs is a “trademark” of this type of self-employment and probably a very attractive factor for those who want to start working on their own. Besides all that, new self-employed can issue invoices and register for VAT as well, although this is also not obligatory under a gross income of 35,000€/year, as businesses with this amount of annual revenue fall under the “small business regulation” category. There is also a possibility of cooperating with other self-employed.

Examples of new self-employed in Austria are:

  • artists,

  • writers,

  • journalists,

  • lecturers,

  • self-employed nurses,

  • midwives,

  • scientists,

  • self-employed psychologists

  • psycho- and physiotherapists

Other characteristics and groups of new self-employed are :

  • self-employed who mostly use their own operating resources,

  • persons with work contracts who are not members of the Chamber of Commerce (a service has been agreed for work contracts),

  • limited working partners,

  • personally liable partners of partnerships,

  • managing partners of a GmbH (a limited liability company) if they are not insured as employees.

Business licence owners

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 fulfill 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 to pass an exam. Both types have a yearly fee. (NOTE: In 2020, for a certain amount of time some licences might be free due to corona-related economic situation in Austria.) Whether you need a business licence or not depends on the nature of your job, not on the income. Most of the 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 licence:

List of free licence professions: HERE

List of regulated licence professions: HERE

Liberal professionals

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:

  • pharmacists

  • architects and engineering consultants

  • doctors

  • notaries

  • lawyers

  • veterinarians

  • accountants

  • dentists

Independent contractors

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 at the 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.

Hungry for more?

Learn how to register as a new self-employed

Check out our self-evaluation test that will help you judge whether you've got enough to start the journey of self-employment.

Read about the differences between employment and self-employment

Get our Guide that covers all topics related to new self-employment in Austria!

Share On: