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Full Time Job + Freelance Projects

Posted: Wed Sep 25, 2013 11:00 pm
by sonticus
Hello To all Members,

i need some help if anyone knows something about this. I'm a holder of a RWR+ card in Austria. I work full time as a Software Developer in Vienna. Since i work full time
i have a monthly salary.

Thanks!

Re: Full Time Job + Freelance Projects

Posted: Thu Sep 26, 2013 8:27 am
by morgenhund
September 2013's Gewinn did a feature on this kind of model - i.e. Angestellter and then a Nebenjob. From looking at the article it seems to almost disincentivise this approach if you are wanting to make serious money - I got the impression the article was based on ways of making supplementary income if you were relatively low-paid, otherwise you would end up more or less working to pay the taxman or the SVA.

The article implies that unless one limits the Nebenjob earnings to EUR 730 in the calendar year that your Steuererklärung should reflect earnings from both sources of income - in which case it would be worth checking this out with a Steuerberater - especially if the additional earnings push you in the next tax bracket. As far as social insurance is concerned the article reports that if you go over the Geringfügigkeitsgrenze (EUR 386,80 per month) you'll have to contend with social insurance. They quote about 27.7% percent of your Überschuss (i.e. revenue minus all costs) and then deductions for Einkommensteuer for your freelance activities. It seems that the only thing that could mitigate this would be if you are earning over EUR 5.180 gross from the main job per month and then you don't have the SVA payments on top, but would be obviously paying a higher level of tax.

From the reading of it, it almost seems worth reining in your spending rather than looking to earn more - sorry this seems quite a negative answer, but the Gewinn article is not very positive in this regard.

Re: Full Time Job + Freelance Projects

Posted: Mon Oct 21, 2013 3:03 pm
by ueberfood
If you work full time you can only earn 720€ on top of that in a year. Any more and you are really just paying taxes unless it is such a significant amount that you can take the tax hit.
I would suggest talking to an accountant and calculating it out.
Software developer is a high earning job- have you looked into switching companies?
Becoming a freelancer altogether is another option- with enough contracts you can earn significantly more even with the taxes of being self employed but do not that health care and such does not have such a cozy setup as being a registered employee does. 

Re: Full Time Job + Freelance Projects

Posted: Sun Jan 19, 2014 12:47 am
by sonticus
I got the information also that 720 EUR i can earn on top for a single year.

Re: Full Time Job + Freelance Projects

Posted: Mon Jan 20, 2014 10:46 am
by Tatt
sonticus wrote:...I could earn about 600 EUR for one month basically on the offer i have. So in the end i would have to arrange a tax payment for that amount. But as far as i have calculated half of that money would go on taxes which is a quite a small amount for a lot's of work... Not good...
Income tax in Austria is universal and progressive, it applies the same to everyone and at 600 EUR per month you would not pay more than €100 in tax and social contributions. After you earn more than €60.000 you pay half your income in tax, but below €10.000 you pay no tax and 17% social contributions (for that you get good services, pension, medical and unemployment insurance).

Re: Full Time Job + Freelance Projects

Posted: Mon Jan 20, 2014 1:35 pm
by morgenhund
Tatt wrote:
sonticus wrote:...I could earn about 600 EUR for one month basically on the offer i have. So in the end i would have to arrange a tax payment for that amount. But as far as i have calculated half of that money would go on taxes which is a quite a small amount for a lot's of work... Not good...
Income tax in Austria is universal and progressive, it applies the same to everyone and at 600 EUR per month you would not pay more than €100 in tax and social contributions. After you earn more than €60.000 you pay half your income in tax, but below €10.000 you pay no tax and 17% social contributions (for that you get good services, pension, medical and unemployment insurance).
Not sure that applies on second income in addition to income on a full-time job. Think the problem is likely to be more the combination of social security and income tax on the second (freelance) income over and above the tax paid on the full-time job.

Re: Full Time Job + Freelance Projects

Posted: Mon Jan 20, 2014 4:57 pm
by Tatt
morgenhund wrote:
Tatt wrote:
sonticus wrote:...I could earn about 600 EUR for one month basically on the offer i have. So in the end i would have to arrange a tax payment for that amount. But as far as i have calculated half of that money would go on taxes which is a quite a small amount for a lot's of work... Not good...
Income tax in Austria is universal and progressive, it applies the same to everyone and at 600 EUR per month you would not pay more than €100 in tax and social contributions. After you earn more than €60.000 you pay half your income in tax, but below €10.000 you pay no tax and 17% social contributions (for that you get good services, pension, medical and unemployment insurance).
Not sure that applies on second income in addition to income on a full-time job. Think the problem is likely to be more the combination of social security and income tax on the second (freelance) income over and above the tax paid on the full-time job.
Yes I think you are correct on second income.

Just a thought however; as a contractor you could incorporate a limited company in another EU country, say the UK, and employ yourself through that country to a customer in Austria. The UK business would invoice the customers here and pay corporation tax in the UK.
You would be employed there on a low salary and liable for the second income tax in Austria, however at the end of each year you could pay out a dividend on your shares in this company which are taxed at capital gains of 25% flat rate.

At least I have heard people talk of this model.

Of course this is not a complete information - I would suggest to speak to a tax consultant at KPMG if you are interested.

Re: Full Time Job + Freelance Projects

Posted: Wed Jan 22, 2014 10:41 pm
by developer
In a suggested way through a UK LTD company would be fully illegal to avoid paying corporation taxes in Austria since the company pays taxes from where it's managed and where it's incorporated. Based on that you would still be paying corporation taxes in Austria since it would be considered as a local GmbH since the fact is you would be doing the business in Austria and your clients are from Austria. If it would happen that one of your clients during the audit says that's your company you would get a huge tax bill since your residence is in Austria. But if you would register a Ltd. & Co KG that would be a good solution as a one person company and it will reduce the corporation taxes. The only to the company house in UK you would be sending that you paid all taxes in Austria where you are doing the business.

But it's a good recommendation to take some consultations about how to do that... It's important to do it in a legal way.

Re: Full Time Job + Freelance Projects

Posted: Tue Jun 23, 2020 6:38 pm
by uhippargi
Hello everyone,
I have a question regarding doing a freelance job in Vienna.
I am doing a full time right now (red white red card), how is the rule about doing a freelance with a fulltime, is VAT ID enough for doing both ?
also how do I get my VAT ID here ?

Re: Full Time Job + Freelance Projects

Posted: Thu Jul 02, 2020 5:11 pm
by morgenhund
uhippargi wrote:
Tue Jun 23, 2020 6:38 pm
Hello everyone,
I have a question regarding doing a freelance job in Vienna.
I am doing a full time right now (red white red card), how is the rule about doing a freelance with a fulltime, is VAT ID enough for doing both ?
also how do I get my VAT ID here ?
You are likely to have to also pay social insurance contributions for the extra activity, unless you are already paying the maximum. An USt ID is unlikely to be sufficient, as it doesn't kick in from the outset.

Also if you are in full-time employment, you may need your employer's permission to do other work (check your employment contract).