Everything you need to know about additional income as a retiree

By Daniel Eberharter

Are you retired and want to continue working but you’re not sure about all the legal issues? Are you even allowed to earn money at all? What are the tax effects if you do?

Find out everything you need to know about additional income as a retiree depending on your pension type because it makes a big difference whether you receive e.g. a retirement pension, an early retirement pension, or a disability pension.

Once you have all your information, you can check your situation using our exclusive tax calculator and find out how any extra income will affect you: WisR Additional Income Calculator (in German)

A small tip: What follows is general information. Please check what your personal requirements are with a tax advisor and with the information offices of the Chamber of Labour, WKO and SVA.

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Income on top of your pension and its effects:

The main factor affecting how your additional income is treated is the type of pension you have.

When working while receiving a pension, pay attention to these two points: The type of pension you have and the resulting effects of additional income on the amount of your pension, social security contributions, and income tax. Depending on the type of pension, there are different effects on the amount of your pension and taxes.

WisR Infografik Pensionszuverdienst
WisR Infographic (in German): What are the effects of working while receiving a pension?

Generally:

Every source of income is added up at the end of the year and is usually subject to tax and insurance payments. Anyone who receives a pension and also starts a job must combine both incomes at the end of the year. The total income is then used for annual tax calculation and also determines the amount of social security contributions you may be liable for.

There are exceptions where you can work and have no tax consequences:

Exception 1: Income under the low income threshold (Geringfügigkeitsgrenze): The big exception that affects neither income tax nor social security is the so-called low income threshold . This amount is regulated by law and changes every calendar year. In 2019, the low income threshold is EUR 446.81 per month.

Exception 2: If your total annual income (e.g. pension and gainful employment) does not exceed EUR 12,000, you do not have to deal with any additional taxes. In the case of traditionally self-employed people, this amount is EUR 11,000.

If this amount is exceeded, you will likely need to pay additional taxes. Further information can be found here (in German).

Influence of additional income on the amount of pension you receive

The earning of additional income while receiving a pension can also influence the amount of pension you get. In most cases, this influence is negative but in one case it is positive.

We’ve compiled the main types of pension and how they may affect you!

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Old-age pension “Alterspension”

The standard retirement age is 65 for men and 60 for women. In 2024, the retirement age for women will be gradually raised and adjusted to the retirement age for men. By 2033, the standard retirement age for everyone will be 65.

Effect of additional income on your old-age pension

If you receive an old-age pension, we have good news for you:

“You can continue to work in addition to your pension without restrictions and the amount of your pension will not be reduced. On the contrary - the additional income you earn can even increase your pension.”
(Source (in German): arbeiterkammer.at)

Effect of additional income on income tax and social security contributions

Annual income above EUR 12,000 is taxable and subject to social security contributions.

Early retirement pension

Effect of additional income on your early retirement pension

Whoever receives the so-called early retirement pension is in fact only advised to earn a small additional amount no more than the low income threshold of EUR 446.81. Anything you earn in excess of this (even if it is only one euro) will automatically lead to the loss of your pension!

Tip: Upon reaching the age of 60 (women) or 65 (men), the pension is converted into a old-age pension.

Effect of additional income on income tax and social security contributions

Annual income above EUR 12,000 is taxable and subject to social security contributions. Income below the low income threshold has no effect on your pension, taxes or social security.

Exceptions

There are some exceptions to be aware of such as agricultural and forestry enterprises & pensions as well as income from a political function of a public representative. For more details (in German) see wko.at.

Disability pension

Those who retire early for health reasons give up gainful employment upon retirement. This makes it more difficult to earn additional income.

If you do have an additional job, only a small additional income of up to EUR 446.81 is recommended. But more is also possible. However beware: An additional income above the low income threshold (even if it is only one euro) leads to a reduction of your pension.

Effect of additional earnings on your disability pension

The following applies here: In the case of monthly low income employment and monthly pension income amounting to a combined total of EUR 1,220.01, there are no effects on the amount of pension you receive.

Income above this amount does not lead to a total loss of your pension, but it does lead to a reduction of the amount of your pension For more information (in German), see help.gv.at.

Effect on income tax and social security contributions

Annual income above EUR 12,000 is taxable and subject to social security contributions. Income below the low income threshold has no effect on your pension, taxes or social security.

Other types of pensions

For other types of pensions, we recommend that you have a meeting with a tax advisor or a respective insurance company.

Be careful! You are obligated to declare any additional gainful activity

Don’t forget: “The start and end of gainful activity as well as the amount and any change in earned income must be reported to the proper pension insurance institution within 7 days. If the notification is not made in time, excessive pension payments will be reclaimed”.
(Source (in German): help.gv.at)

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All information is provided without a guarantee concerning its validity, correctness, or accuracy and is subject to change without notice.