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WORKING IN AUSTRIA

Reader question: Can I work in Austria while I wait for my work residence permit?

Non-Austrian citizens living in the country must have either a residence registration or permit, which can take weeks to several months. Can they work while waiting?

Published: 16 March 2023 09:47 CET
Updated: 14 September 2023 14:42 CEST
Pictured are office workers.
Why movers to Switzerland always ask about wages. Photo by Scott Graham on Unsplash)

Reader question: I’m an EU citizen and recently moved to Austria. I know I have four months to make the Anmeldebescheiningung registration, but can I work in the meantime?

EU/EEA citizens enjoy the freedom of movement in the bloc, which means they are generally free to move and work in other countries, including Austria.

As a citizen of an EU country, Iceland, Norway or Switzerland, you have the right to live in Austria for more than three months as long as you meet one of the following criteria: being employed or self-employed in Austria, studying at a recognised Austrian institution, or having sufficient financial means to support yourself (including if your partner earns enough to support both of you).

As well as fulfilling one of these conditions, you need valid health insurance for Austria.

READ ALSO: Anmeldebescheinigung: How to get Austria’s crucial residence document

This means that not only are you allowed to work before you get your registration certificate (Anmeldebescheinugung), but you might actually need to in order to prove you can support yourself during your stay – however long – in Austria.

But what about third-country citizens?

For citizens that do not hold an EU/EEA nationality, though, rules are pretty different. They won’t need a registration or residence certificate. Instead, they’ll need a residence permit for stays longer than six months, and in most cases, they won’t be allowed to work while in the processing period.

A rare exception is if you currently hold a Student visa and may be waiting to swap it for a “Rot-Weiss-Rot” (RWR) work permit. 

If you are a third-country national who has pursued and successfully completed a higher degree study at an Austrian public university, university of applied sciences (Fachhochschule) or accredited private university, you may renew your residence permit “Students” for a period of twelve months to search for employment or start a business in Austria. 

In that case, you are granted an employment permit for jobs of up to 20 hours per week. If you get a job offer that fulfils the criteria for an RWR permit, you may change your Student visa for a working permit.

READ ALSO: EXPLAINED: How to apply for a residency permit in Austria

Things are more complicated when it comes to other types of permits. For example, if you are on a Job Seeker Visa, which allows very highly qualified workers to search for a job within six months in Austria, you generally cannot take up a position not matching your qualifications.

“All applicants who apply for the first time for an RWR card need to match the job they apply for with their professional qualifications. And a person with a job seeker visa is not allowed to work while searching for a job in Austria.”, explains Kornelia Epping, a specialist in immigration and relocation and CEO of MOVES consulting in Vienna. 

When third-country citizens move to Austria, a common permit is the RWR card, a work permit. Since it is connected to a concrete employment offer, people are allowed to work for the company that sponsored their RWR card – changing companies means they’ll have to apply for a new RWR card.

READ ALSO: How long do I have to work for in Austria to get unemployment benefits?

However, spouses and family members of RWR holders will get a different permit, the RWR Plus, which allows them to work for any company, but only once they get the document. 

“All third-nationals waiting for the approval of their permit – first-time application – need to wait for the approval and handout of the permit until they are allowed to start working”, said Epping. Unfortunately, this means that spouses of RWR cardholders may need to wait for weeks and months until they can find a job in Austria. 

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WORKING IN AUSTRIA

Why are people in Austria paying more taxes despite federal reforms?

Workers in Austria are still among those with the highest tax burdens in the world, with the taxes and contributions taking more than 40 percent of wages even as the country introduced sweeping tax reforms.

Published: 26 April 2024 12:21 CEST
Why are people in Austria paying more taxes despite federal reforms?

It’s often said that Austria is a country with high quality of living and high taxes, but a new OECD study shows just how high the tax burden is here compared to other OECD countries.

According to the report, Austria has the third-highest tax burden on workers and the so-called “tax wedge”, how much of a worker’s wage is taken by the government,  increased as well.

According to the OECD, in most countries, the increase in labour taxation was primarily driven by increases in personal income tax.

This is because nominal wages increased in 37 out of 38 OECD countries as inflation remained above historic levels. However, since most of these countries do not have automatic indexation of tax systems, high inflation tends to increase workers’ tax liabilities by pushing them into higher tax brackets. 

However, Austria’s federal tax reforms removed this in the country in 2023. This means that once inflation rises, the tax brackets that define how much taxes you will pay on your income will also rise – and they have risen in 2023 and in 2024 since the change. 

The measure was known as the “end of the cold progression” in Austria and should have protected workers’ incomes from inflation losses.

READ ALSO: The tax benefits that parents and families receive in Austria

What is the tax ‘wedge’?

The OECD defines a tax wedge as “income tax plus employee and employer social security contributions, minus cash benefits.” 

In other words, if an employer has a labour cost of €100, how much will they actually see in their pockets, and how much of this goes to the state? According to the organisation, the percentage is the tax wedge.

In Austria, €100 earned by a single employee without children was taxed at an average of €47.2 last year. The amount was only smaller than in Germany (47.9 percent) and Belgium (52.7 percent) and it rose compared to the previous year when it was still at 46.9 percent.

The average of the 38 OECD countries was 34.8 percent.

Married single-earner couples with two children also have high tax burdens, with a tax wedge of 32.8 percent (OECD average: 25.7 percent), which is the eleventh-highest tax and contribution burden within the OECD for this group (2022: 13th place). For married dual-earner couples, the wedge was 40.6 percent.

The tax wedge for individuals or households with children is generally lower than those without children, as many OECD countries grant households with children a tax advantage or cash benefits.

READ ALSO: Why it’s worth filling in your annual tax return in Austria

Why is Austria’s tax burden higher this year?

Despite the tax reform presented by the government, Austria’s tax wedge has increased compared to the year before. 

The reason is the relief granted in Austria in 2022 in the form of one-off state payments. With the rising cost of living, the federal government released several temporary measures to help people in the country cushion the effects, including the popular €500 Klimabonus payment every person who had been a resident of Austria for at least six months was entitled to. 

These payments and increases in family allowances reduced the tax burden in 2022 – but they no longer exist or were drastically cut in 2023. Because of that, the tax burden is rising again. 

“The abolition of cold progression and the other measures have merely prevented the tax burden from rising more sharply,” Wifo economist Margit Schratzenstaller told Der Standard.

The report said the increased tax issues show that there is still a need for action. Compared to other industrialised countries, Austria’s tax burden on work for a single person without children is ten percentage points higher. Of course, the expert noted, the fact that many industrialised countries have a different social system with fewer publicly funded benefits also plays a role here. However, labour is also expensive in Austria compared to the EU average.

READ ALSO: What foreign residents in Austria should know about taxes

“The fact that the tax burden on the middle classes has increased is due to the government’s failure. Instead of structural relief, there have been one-off payments that have evaporated,” said Lukas Sustala, head of Neos-Lab, the think tank of the liberal opposition party.

NEOS representatives have urgently called for a ‘comprehensive tax reform’ to alleviate the heavy labour burden, with a significant reduction in non-wage labour costs, according to an ORF report.

In addition, NEOS proposes the creation of ‘tax incentives for full-time work’ – including a full-time bonus and tax exemption for overtime pay. Simultaneously, NEOS aims to eliminate ‘part-time incentives of any kind’, offering a potential boost to the economy and workers’ incomes.

Economist Schratzenstaller also recommends action: She suggests reducing social insurance contributions, for example, for health insurance companies. However, it’s important to note that intervening in this area could affect the largely autonomous financing of Austria’s healthcare system, which is funded mainly through workers’ and companies’ payments via social insurance contributions. 

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