CONTRIBUTIONS ASSESSMENT BASED ON VALUE ADDED

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AUSTRIA
CONTRIBUTIONS ASSESSMENT BASED ON VALUE ADDED
WERTSCHÖPFUNGSABGABE

Mechanism whereby gross value added (net value added plus depreciation) is used as the sum on which social insurance contributions are charged, rather than the total wages bill. The intention is to broaden the assessment basis and reduce the size effect, by making a company's contribution to the financing of social insurance dependent on its productive efficiency and not purely on its payroll. With the growth in unemployment and the decline in the wage ratio, this change from wages to value added as the basis for calculating social charges is increasingly becoming the focus of debate, since the demographically related growth in future entitlements precludes any increased burden on the labour factor.


Please note: the European industrial relations glossaries were compiled between 1991 and 2003 and are not updated. For current material see the European industrial relations dictionary.