Contract for work (Werkvertrag)

Definition

In a Werkvertrag (contract for work, § 1151 ABGB) the contractor owes a result, a defined piece of work, not their labour over time. They work free of instruction, with their own means and at their own entrepreneurial risk. They are therefore genuinely self-employed and insure themselves under GSVG via the SVS, outside the ASVG system.

What the client pays

No payroll levies. Because the contractor is not an employee, there is no employer social insurance, no municipal tax, no employer contribution and no occupational provision. The client's cost is simply the agreed fee. Above the small-business turnover limit of €55,000 gross per year, 20.00 % VAT is added, but a VAT-registered business reclaims it, so it is not a real cost.

Caution: bogus self-employment

A Werkvertrag on paper does not by itself create self-employment. If the authorities find that work was actually done in personal dependence (fixed hours, instructions, integration), the relationship is reclassified retroactively as employment, with back-payment of social insurance (up to five years, both employee and employer shares), payroll levies and wage tax plus default interest. The cost advantage then reverses sharply.

See also

• Free service contract, the middle ground: more independent than an employee, yet still ASVG-liable.
• New self-employed, how the contractor insures themselves.
• Employment, free service or work contract, what each contract type costs the client.