Payroll accounting for employees (Personalverrechnung) in Austria is a very important, demanding and at the same time very complex area of financial accounting. Suffice it to say that the annually published Manual for the Calculation of Practical Salaries consists of 1,483 pages, not counting the
innovations after each tax reform. The salary an employee receives on hand (Netto) is only a part of what the employer spends. Monthly deductions for social security (Sozialversicherung) and income tax (Lohnsteuer) are made from the salary stated in the contract (Brutto) – the higher the salary, the more progressive the tax rate. In addition to the salary, the employer also pays a contribution of at least 30 % to the social security authorities, the Finance Department and the Magistrate’s Office on behalf of the employee. The form of employment (full-time or part-time) and the type of
employment relationship (permanent or freelance, fee-based) are taken into account. But it is not only the calculation of salaries and deductions on the part of the employee and employer that are part of the tasks of specialists in this field. Here it is important to mention the timely registration of new employees before they start their employment and their correct de-registration at the end of their activity, as well as all the nuances of calculating other regular or one-off payments, calculating termination payments based on time worked, holiday pay and sick pay. In addition, the payroll specialists, together with lawyers and tax lawyers, check the employment contract for compliance with Austrian law and are the contact persons for employees and employers in questions of employment law. As a rule, small and medium-sized businesses, due to the complexity and time-consuming nature of this function, prefer to outsource the calculation of employee salaries, taxes and obligatory deductions. For this purpose, they turn to the services of experts.
