Reduction of employer contribution as of 2023

The requirement for the application of the reduced rate as of 1.1.2023 is either

a wage regulation (e.g. collective agreement or company agreement) or 

• an internal regulation for all employees or
• certain groups of employees.

All employers who employ staff in Austria must pay an employer's contribution to the Family Burden Equalization Fund (DB). The contribution basis is all wages paid to employees in a calendar month. If the contribution base in a calendar month does not exceed the amount of € 1,460, it is reduced by € 1,095. The employer's contribution is a self-calculating levy and is therefore not prescribed, but must be determined by the employer and paid to the tax office by the 15th of the following month.

Early reduction of employer contributions

With effect from 2023, it was decided to reduce the employer's contribution in advance, provided that the reduction is explicitly based on a wage-forming measure. If the reduction is not explicitly anchored in a supra-company agreement (e.g. in a collective bargaining agreement), it can also be implemented internally. According to information provided by the responsible Federal Ministry, a corresponding wage-forming measure is, for example, an internal company memo, which must be prepared and kept for possible inspections by the tax authorities. Additional information to employees is not required.

The reduction must be determined for all employees or for certain groups, which may also include freelancers and shareholders/managing directors with significant shareholdings. It is recommended to ensure that the reduction is applied to all employees and that a corresponding note is made.