|GH 2017 Austria|
Since every activity or project arising from an employer-employee relationship can also be the subject of an independent service contract, the question of whether a true economic relationship is best described as an employment contract or as an independent service contract can only be judged in individual cases and according to the true economic content of that relationship. Independent contractors have reduced protection under labour law. For example, independent contractors are entitled neither to collective bargaining agreement wages nor (unless otherwise agreed between the employer and the independent contractor) to special payments or paid holidays.
As independent contractors are treated like self-employed people for tax purposes, they are subject to income tax, but not to earnings tax. They are liable for the payment of the income tax. The income tax liability is settled by the contractor’s annual taxable income. If his or her income exceeds the sum of 11.000 Euro, he or she must pay tax for them.
A re-characterization (changing the status of a contractor into an employee) is not made automatically but can be done by Court decision. However, the Austrian government’s intended project for 2017 is to create an external authority to check hidden employment relationships on a case-by-case basis.