DEDUCTIONS FROM PAY
|DEDUCTIONS FROM PAY
LOHN- UND GEHALTSABZÜGE
Since in Austria, as in other Central European countries, social insurance and hence a large part of the welfare state is financed through employers' and employees' contributions, deductions from gross pay are relatively high. In the case of a manual worker, monthly deductions for social charges (up to the earnings limit for chargeable contributions) amount to 18.2%: employee's contribution of 10.25% for pensions insurance, 3.95% for health insurance, 3.0% for unemployment insurance, 0.5% for the Housing Fund and 0.5% for the Chamber of Labour levy; in the case of white-collar workers, the health insurance contribution is 0.45% lower. Tax deductions vary with income: in the case of a manual worker in manufacturing industry with average earnings, 9.2% of gross pay is deducted as earnings tax; this drops to 4.1% where earnings are one third lower than average, and rises to 14.5% where they are two thirds higher than average.
Total deductions from pay borne by the employee therefore amount, correspondingly, to 27.2%, 22.2% or 32.6%. When these deductions are combined with the social insurance contributions paid by the employer (tax wedge), the corresponding figures are 41.5%, 37.4% or 45.8%.