Can I Claim Personalkosten (Staff and Payroll Costs) as a Business Expense in Austria?
Staff costs are fully deductible business expenses. The full employer cost includes gross salary plus approximately 28–30% in employer social contributions (ASVG ~21%, DB 3.7%, DZ ~0.4%, Kommunalsteuer 3%). Pensionskasse contributions are also deductible.
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What Finanzamt Österreich / BMF says
§4 Abs 4 EStG (deductible business expenses); ASVG employer contribution schedules; Kommunalsteuergesetz §7. WKO gives the 2026 rates: the Dienstgeberbeitrag (DB) is 3.7% of the monthly gross payroll, and the Zuschlag zum DB (DZ) is set by Bundesland. It is 0.40% in Burgenland, 0.37% in Kärnten, 0.33% in Niederösterreich, 0.31% in Oberösterreich, 0.35% in Salzburg, 0.34% in Steiermark, 0.39% in Tirol, 0.33% in Vorarlberg and 0.36% in Wien. The DB and DZ are not due for employees over 60. Kommunalsteuer is 3%, and the DB, DZ and Kommunalsteuer all have a monthly Freigrenze of €1,460 and Freibetrag of €1,095.
When you can claim
- Gross salaries paid to employees: fully deductible
- Employer ASVG contributions (~21% of gross): fully deductible
- DB 3.7% and DZ 0.31% to 0.40% by Bundesland: fully deductible as Lohnnebenkosten
- Kommunalsteuer 3% on gross salary: fully deductible
- 13th and 14th month Sonderzahlungen (Christmas and holiday bonuses): fully deductible as a business expense even though taxed at preferential 6% rate for the employee
- Pensionskasse (occupational pension scheme) contributions: fully deductible up to 10% of qualifying payroll
- Staff training, uniforms, and tools provided to employees: fully deductible
When you cannot claim
- Excessive salaries to shareholder-directors that exceed arm's length rates: reclassified as a hidden profit distribution (verdeckte Gewinnausschüttung) and not deductible
- Private expenses of the owner reimbursed via payroll without genuine employment activity
- Salaries paid to family members for work not actually performed at market rates
Good to know
Pro tip: The 13th/14th month Sonderzahlungen are taxed at only 6% Lohnsteuer for the employee (on qualifying amounts) but fully deductible for the employer at 23% KSt. This asymmetry makes Sonderzahlungen a tax-efficient compensation structure.
Important: GmbH directors who own more than 25% of the company are NOT employees for ASVG purposes: their remuneration is subject to SVS contributions, not employer ASVG. The company cannot claim employer ASVG on SVS-classified director income.
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