Explore our EOR & PEO services in AUSTRIA

As your EOR in Austria, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.

Your candidate is hired by a PEO in AustriaÂ provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.

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Country Overview

Austria is a federal republic located in Central Europe, bordered by Germany to the northwest, the Czech Republic to the north, Slovakia to the northeast, Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the west. It has a population of approximately 8.9 million people, with the capital city being Vienna.

Austria has a strong and diversified economy, with a GDP of $459.4 billion in 2021. It is known for its high standard of living and is consistently ranked as one of the wealthiest countries in the world.

It’s Europe’s land of wide, fertile agricultural plains, with large pockets of heavy industry in the east.

General Information

Population: ~9.000.000

Capital City:Â Vienna (population: ~2.000.000)

GDP:Â ~$582 billions

GDP per capita:Â ~$64.000

Currency: Euro (EUR)

Unemployment:Â ~6.3%

Employer Taxes: 21.08%

Employee Taxes:Â 0% – 55%

AUSTRIA EOR SPECIFICS

Employment Contracts in Austria

An employment contract can be either fixed-term (befristeter Arbeitsvertrag) or of indefinite duration (unbefristeter Arbeitsvertrag).

Probation Period in Austria

The probationary period typically lasts for one month, although some collective agreements may specify a shorter period. Apprentices typically have a probationary period of three months. These details should be available at the workplace.

Working Hours in Austria

In Austria, the typical work week starts on Monday and ends on Friday. Most people have Saturday and Sunday off. The standard working hours are 8 hours per day or 40 hours per week, usually between the hours of 8 AM and 6 PM. However, some collective agreements may specify a shorter standard working week (e.g. 38.5 hours per week). There are exceptions to this, such as a daily working time of 9 hours being allowed if it results in a longer weekend rest (called a “short Friday”). The weekly standard working hours can be more than 40 hours under certain conditions. Overtime is defined as working more than the statutory 40-hour standard working week or the 8-hour standard daily working time. You will receive at least a 50% surcharge for every hour of overtime worked. If you have agreed to time compensation, you will receive 1.5 hours of compensation for every hour of overtime worked.

Many collective agreements, such as those for night, holiday, and Sunday work, provide for higher surcharges for overtime. It is prohibited to agree to pay overtime at a 1:1 ratio. A maximum of 5 overtime hours per week is allowed, with an additional 5 hours allowed on a weekly basis (for a total of 10 overtime hours per week) but only for a maximum of 60 hours per year. The daily working hours, including overtime, may not exceed 10 hours. Collective agreements may allow for even higher levels of overtime, and additional overtime may also be permitted by company agreement.

Vacation Days in Austria

Employees are entitled to some of the most generous annual leave entitlements in the world. They are entitled to 25 days of paid vacation per year, which increases to 30 days after 25 years of service.

Sick Leave in Austria

The amount of sickness cash benefit is based on your last salary. The assessment ceiling is set at EUR 5,550 per month, meaning that any income above this amount will not be taken into account. If you are sick for 42 days or less, the sickness cash benefit is 50% of your salary. If you are sick for a longer period, the benefit increases to 60% from the 43rd day. In some cases, the sickness insurance fund may provide for an increased benefit for those with a spouse and/or dependent family members, but this increase may not exceed 75% of earnings. For those in marginal employment who are voluntarily insured, the sickness cash benefit is set at EUR 170.90 per month. As a rule, sickness cash benefit is paid for up to 52 weeks (one year). The rules of the relevant sickness insurance fund may extend this duration to a maximum of 78 weeks (one and a half years).

Wages and Salary Payment in Austria

In Austria, there is no national minimum wage law. Instead, the wages of most workers are determined by collective agreements negotiated by the social partnership, a system of cooperation between unions and employer associations. The current agreement stipulates that workers must earn a minimum of 1500 € per month. Wages are usually paid into a salary account on the last day of the month or the first day of the following working month. However, some workers may receive their wages in cash on a weekly basis.

Public Holidays in Austria

The following days are recognized as public holidays in Austria:

January 1: New Year’s Day
January 6: Epiphany
April 18: Easter Monday
May 1: Labor Day (also known as May Day)
May 26: Ascension Day
June 6: Whit Monday
June 16: Corpus Christi
August 15: Assumption of Mary
October 26: National Day
November 1: All Saints’ Day
December 8: Immaculate Conception
December 24: Christmas Eve bank holiday
December 25: Christmas Day
December 26: St. Stephen’s Day

Employer Taxes in Austria

Social contributions are based on a maximum assessment basis (gross salary) of EUR 5,550 per month for current payments and apply to both employers and employees. In addition, employers are liable for the Family Burdens Equalization Levy at a rate of 3.9%, a municipal tax on payroll at a rate of 3% of monthly gross salaries and wages in the city of Vienna, and a public transportation levy of EUR 2 per week per employee in Vienna. There is also a contribution to the Chamber of Commerce of approximately 0.38% (between 0.34% and 0.42%) of monthly gross salaries paid (depending on the province). For employment subject to Austrian employment law, a contribution to the mandatory employee pension fund at a rate of 1.53% on monthly gross salaries is also payable.

Employee Taxes in Austria

Residents of Austria are subject to Austrian income tax on all worldwide income, including income from trades, businesses, professions, employment, investments, and property. Non-residents are only subject to Austrian income tax on Austrian-source income, and the tax rates for this income are as follows:

Income (EUR) | Tax Rate (%):

11000 and below | 0%
11001 to 18000 | 20%
18001 to 31000 | 35%
31001 to 60000 | 42%
60001 to 90000 | 48%
90001 to 1,000,000 | 50%
Above 1,000,000 | 55%

Social security contributions:

Pensions: 10.25%
Sickness: 3.78%
Unemployment: 3.00%
Miscellaneous: 1%

These contributions are based on a maximum assessment basis (gross salary) of EUR 5,550 per month for current payments and apply to both employers and employees.

Notice Period in Austria

Notice of termination of employment can be given by either the employer or the employee, and it can be communicated verbally, in writing, or implicitly through the handover of employment papers. No reason for the termination needs to be given.

The periods of notice and deadlines for termination by the employer are as follows:

For white-collar workers: a minimum of six weeks (to the end of the calendar quarter unless otherwise specified in employment contracts and collective agreements).
For blue-collar workers: two weeks. Collective agreements and works agreements may specify longer periods of notice.

The periods of notice and deadlines for termination by the employee are as follows:

For white-collar workers: one month (to the last day of the month).
For blue-collar workers: two weeks, unless otherwise agreed upon. Notice can be given in writing, and no reason needs to be provided.

Termination / Severance in Austria

A company may include provisions in a contract stating that either party can terminate the agreement on the 15th or last day of any month. However, the company must follow any required notice periods and adhere to designated termination dates when ending the contract without cause. In accordance with the severance pay scheme, the employer is required to contribute 1.53% of the employee’s monthly salary to a severance fund called the Betriebliche Vorsorgekasse. Upon the end of employment, the employee has the option to request disbursement of the accumulated funds or leave them in the fund for further investment.

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