The Definitive Manual for Employee Recruitment in Austria

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Quick facts

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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.

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Austria has a strong and diversified economy, with a GDP of $582 billion. 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.

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Employment Contracts

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

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Probation Period

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.

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Working Hours

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.

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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. If there is an increased work requirement, 20 hours of overtime per week are permitted. Daily working hours may not exceed 12 hours and weekly working hours may not exceed 60 hours, including overtime. Collective agreements may allow for even higher levels of overtime, and additional overtime may also be permitted by company agreement.

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Vacation Days

Employees are entitled to some of the most generous annual leave entitlements in the world. They are entitled to 25 working days of paid vacation per year, which increases to 36 days after 25 years of service.

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Sick Leave

In Austria, sick employees are entitled to full salary for up to 12 weeks, depending on their length of employment. After that, they receive half pay for 4 more weeks. If sick leave is prolonged, social security pays benefits. Sick pay starts from the 4th day of illness and lasts for 26 weeks, up to a maximum of 52 weeks under certain conditions. The amount of sick pay is based on the employee’s salary and is 50% for the first 42 days of illness, then increases to 60%. There is a maximum limit on the amount of income considered for calculating benefits. Employees must inform their employer immediately about any absence and the employer can request a doctor’s note.

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Wages and Salary Payment

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. As per the current IT sector collective agreement in 2025, employees must earn for entry level positions 2.169 EUR gross per month or more.

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In Austria, the 13th and 14th salaries are additional payments known as "holiday" and "Christmas" bonuses, typically paid in June and November, respectively. These payments are taxed at a lower rate, providing employees with extra income to cover summer holidays and year-end expenses.

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Public Holidays

The following days are recognized as public holidays in Austria:
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• 1 January: New Year’s Day;
• 6 January: Epiphany;
• 21 April: Easter Monday;
• 1 May: Labor Day ;
• 29 May: Ascension Day; 
• 9 June: Pentecost; 
• 19 June: Corpus Christi;
• 15 August: Assumption of Mary;
• 26 October: National Day;
• 1 November: All Saints’ Day;
• 8 December: Immaculate Conception;
• 24 December: Christmas Eve bank holiday;
• 25 December: Christmas Day;
• 26 December: St. Stephen’s Day.

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Employer Taxes

In Austria, employer taxes are divided into two main categories: social security contributions and other contributions. The final amount of taxes paid will vary depending on many factors.

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The social security contribution covers health insurance, pension insurance, accident insurance, and unemployment insurance. Additionally, in Vienna, employers pay a public transportation levy of EUR 2 per week per employee. Both the employer and employee contributions must be transferred to the health insurance provider (ÖGK) by the 15th of the following month. In 2025, the monthly marginal income limit is EUR 551.10.

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Employee Taxes

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:

Annual Income (EUR) | Tax Rate (%):

13,308  and below - 0 %

over 13,308   to 21,617  - 20 %

over 21,617 to 35,836   - 30  %

over 35,836  to 69,166  - 40  %

over 69,166 to 103,072  - 48  %

over 103,072 to 1,000,000 - 50  %

over 1,000,000  - 55  %

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These contributions are based on a maximum assessment basis (gross salary) of EUR 6,450 per month for current payments and apply to both employers and employees.

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Health insurance: 3.87%

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Notice Period

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.

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In Austria, notice periods for ending employment depend on your job type and how long you’ve been working. White-collar employees get at least 6 weeks notice from the employer, increasing with tenure (up to 5 months). Blue-collar workers get at least 2 weeks (potentially more from collective agreements). Employees give one month notice (white-collar) or two weeks (blue-collar). The notice period can’t be shortened below the legal minimum, and during that time, white-collar employees get extra free time to search for a new job.

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Termination and Severance Pay

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.