D. Income from employment

What constitutes income from employment?

Income from employment comprises the following remunerations:

• Remunerations and benefits from an existing or earlier contract of employment Rz 645–669b; 930 ff
  These include wages and salaries, as well as company pensions, but also remunerations in kind provided by the employer. These also include remunerations for a marginal employment and income from service vouchers. Service vouchers can be obtained at post offices, tobacconist shops and online at dienstleistungsscheck-online.at. They can be used to pay for simple services in private households, as are typical of households (e.g. cleaning jobs, babysitting, simple jobs in connection with running a household, or simple gardening jobs). Incomes from service vouchers are not subject to wage tax in the course of a year. In the context of the employee tax assessment, your income from service vouchers is also included in the taxation of your annual income.

• Pensions under the statutory social security system Rz 684 ff
  These include, inter alia, pensions from pension-insurance institutions for employees, farmers or trade or business establishments. Increases deriving from voluntary additional insurance are taxable only at one quarter of their value.

• Rehabilitation and reintegration benefit Rz 669c, sickness benefits Rz 671 ff

• Benefits paid by pension funds Rz 680 ff
  Benefits and pension benefits which derive from employers’ contributions are fully subject to wage tax. Remunerations and pension benefits that derive from employee contributions are taxable only at 25%. Pensions from a premium-aided pension scheme (see page 182), a premium-aided provident scheme (see page 180) or a company pension fund are tax-exempt.

• Remunerations under the Austrian Remunerations Act (Bezügegesetz), as well as emoluments paid to members of a provincial government or a provincial diet, to mayors, town councillors or municipal councillors.

Note
Work provided in the framework of a contract for independent services or a contract for work and labour is generally deemed to yield business income. Therefore there is no wage tax deduction. Such income is income from self-employment or from trade or business. In many instances, a “Disclosure pursuant to Section 109a of the Austrian Income Tax Act” must be filed with the tax office (see page 173).

When must tax be paid on income from employment?

Income tax is always calculated on the basis of the total income within a calendar year. As a rule, income (wages, salaries and pensions) is attributed to the calendar year in which the employees receive it.

For an employee tax assessment, the tax is re-calculated on the basis of the actual income realised during a calendar year.

If no income liable to wage tax was received throughout a year, or at differing levels, the calculation covering the entire year for the assessment usually results in a credit.

Please refer to the comments in chapter “The procedure at the tax office” (see page 159) if the result is a subsequent claim for tax payment.