Social insurance under the General Social Insurance Act (ASVG)
In principle, the following groups of persons are subject to (full or partial) compulsory insurance under the ASVG:
- Marginally employed persons (accident insurance only)
- Free service contractors (freie Dienstnehmer)
- Household workers
- Persons employed at their parents’ (grand-parents‘, adoptive parents’ or step-parents’) business even if they do not receive any remuneration for their work,
- Management board members and managing shareholders of companies limited by shares (AG)
- Managing partners in limited liability companies (GesmbH)
Service contracts and employment contracts for salaried employees or for wage-earners are subject to compulsory insurance under the General Social Insurance Act (ASVG) provided that the monthly pay exceeds the applicable marginal earnings threshold.
In 2023, the marginal earnings threshold is EUR 500.91 per month.
The employer has to register the employee with the competent social insurance institution. In most cases, these are the Austrian Health Insurance (ÖGKK), in some cases the Austrian Insurance Institution for Public-Sector Employees (BVAeb) is in charge. The employer has to maintain a payroll account, calculate the social insurance contribution on a monthly basis, and pay them to the social insurance fund. Insurance under the ASVG includes health, pension and accident insurance as well as access to unemployment insurance.
Good to know
The Austrian employment system provides for twelve monthly salaries per year plus two bonus payments, each amounting to another monthly salary (13th and 14th monthly salary). As these bonus payments, which in most cases are paid in June and November, are subject to a lower tax rate, the net amount received is higher than the ‘regular’ salary. In the case of temporary employment, these bonus payments are paid on a pro rata basis.
Social insurance for free service contractors
Free service contractors (freie Dienstnehmer) are also subject to compulsory ASVG insurance if their monthly remuneration exceeds the applicable marginal earnings threshold.
In 2023, the marginal earnings threshold is EUR 500.91 per month .
Free service contractors are covered by pension, health and accident insurance. Since 2008, they have been entitled to cash benefits under the health insurance scheme (maternity leave allowance, sick pay benefits) under the same rules as employees. Free service contractors have also been included in the unemployment insurance scheme and have been entitled to insolvency payments since 2008.
The employer is obliged to register each free service contract with the respective regional insurance fund as soon as the contractor begins work. The duty to register also applies to marginally employed free service contractors.
Free service contractors are neither entitled to sick pay nor to a holiday bonus!
Social insurance for marginally employed persons
Marginally employed persons are persons whose pay as employees or free service contractors is below the lower earnings limit. Up to that threshold, the income of employees and free service contractors is not subject to compulsory insurance provided that the employee/contractor does not have any additional employment.
Whether an employment is marginal is assessed differently from the employee and the employer’s perspective.
For the employee, the following applies
If an employee receives income from several employers which, in total, exceeds the marginal earnings threshold, then the employee is subject to compulsory health and pension insurance. In such case, the Austrian Health Insurance will charge employee for the respective social insurance contributions retrospectively at the end of the year.
Compulsory social insurance also applies if an employee subject to full compulsory insurance is also marginally employed and earns an additional income, let’s say, of EUR 200. In such case, full compulsory insurance has to be paid for the EUR 200 as well.
A dancer is employed with a company throughout the year and earns a monthly gross salary of EUR 2,500. In addition, she teaches dance for children at an ongoing education and training centre and earns EUR 250 a month for these classes. This additional income is subject to full compulsory insurance.
Employees whose income falls short of the marginal earnings threshold may opt for voluntary self-insurance. In such case, an application has to be filed.
Legal basis: section 19a ASVG
In 2023, the monthly contribution to health and pension insurance for self-insured persons under section 19a ASVG is EUR 70.72 for students it is EUR 66.79
A singer has savings from a larger project. For one semester, she teaches one three hour voice course per week at a music school. She is marginally employed and earns EUR 330 per month. She is entitled to take out voluntary health and pension insurance at the favourable terms and conditions described above. Her children, as her dependants, are also covered by this voluntary insurance.
For the employer, the following applies
Regardless of the amount of pay, all employees (including marginally employed ) must be registered with the competent social insurance institution. Payroll accounts must be maintained for all of them. For marginally employed staff, the employers pay only accident insurance contributions. If, however, the aggregate wages/salaries of all marginally employed persons is more than 1 ½ times higher than the marginal earnings threshold, over EUR 751,37 monthly in 2023, the employer must pay a lump-sum of 17 % of the sum total, which still does not afford them insurance coverage.
Exemption from medical prescription fees
An exemption from the payment of medical prescription fees is also available to those insured with the Austrian Health Insurance (ÖGK) provided their income is low enough. To be granted an exemption you must file a request with Austrian Health Insurance.