Austria PEO & Employer of Record

For businesses seeking to enter the Albanian market or engage local or foreign workers there, WeHG offers international PEO and global employer-of-record services.

The traditional approach requires establishing a subsidiary in Austria.  However, our solution allows you to start the operations in Austria within days saving time and money.  WeHG hires candidates on your behalf leaving you the right to maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but working on your behalf. 

Austria fast facts

Population: 9,003,000 (2022)

GDP per capita:  US$ 48,593

Capital: Vienna

Currency: Leke (ALL)

Land Area: 83,878 Km2

Language: German (official)

Austria is a federal republic made up of nine independent federal states or provinces with a parliamentary representative democracy. Austria is a country in Central Europe that borders countries which include the Czech Republic, Germany, Hungary, Slovakia, Slovenia, Italy, Switzerland, and Liechtenstein.

Hiring, Negotiating and Doing Business in Austria

The necessity of a written employment contract

As soon as an employee starts working for the company, the employer is required to provide them with a written record (Dienstzettel) of their fundamental rights and obligations under the employment contract. However, even in the absence of this written document, the employment contract is still enforceable. The mandatory rights and obligations of employment must be mentioned in the employment contract if there is no written record of them.

Different forms of engagement: employment, contracting, work with a private entrepreneur

Generally, it is for the parties of the contract to define the category of employment for the position. Once the parties have agreed, they are required to comply with the applicable legal regulations.

Depending on the contract, the different categories of workers are as follows:

• Employee
• Freelancer
• Contractor

Austria Employment Contract

Employment agreements

An employer must give a written record (Dienstzettel) of the essential rights and obligations under the employment contract to the employee immediately after their employment begins. However, the employment contract is still binding if this written record is not provided. If there is no written record, the employment contract must mention the mandatory rights and obligations of employment.

Austria working hours

The maximum working day is eight hours, and the maximum working week is forty hours, or fifty hours if overtime is taken into account (section 3, Working Hours Act 1969). There are a few exceptions, such as flexible work schedules, and different work-hour distributions enacted by a CBA or a works agreement (four-day workweek, for example, and so on).

Employees are free to refuse overtime without stating any reasons if the overtime hours exceed the ten-hour working day or 50-hour working week. However, the typical weekly maximum has been reduced in several CBAs to, say, 38.5 hours.

Vacation leave in Austria

The minimum holiday entitlement is 25 working days paid holiday a year. After 25 years of service, the employee is entitled to 30 working days.

Austria Maternity Leave

Mothers and pregnant employees are exempt from disciplinary action from the start of their pregnancies until at least four months after giving birth. They can only be dismissed during this time with a judge’s approval. Employee protection from termination often expires four weeks after the conclusion of the maternity leave or part-time employment if the employee has given birth and is legally permitted to return to work.

Austria Severance Laws

Notice periods

In the absence of any other agreement, all white-collar employees must give one month’s notice by the end of the month, regardless of their length of service. Blue-collar employees and their employers must give 14 days’ notice.

The notice period that the employer must give to white-collar employees depends on the white-collar employee’s length of service:

• Less than or equal to two years’ service requires six weeks’ notice.
• More than two years’ service requires two months’ notice.
• More than five years service requires three months’ notice.
• More than 15 years of service requires four months’ notice.
• More than 25 years’ of service requires five months’ notice.

Severance payments

If the employment contract began before 1 January 2003, employees must receive the severance payment to which they have a claim when their employment ends. A severance payment is due only if one of the following applies:

• The employer gives ordinary notice to the employee.
• The employer dismisses the employee without good cause.
• The termination is by mutual agreement.
• The termination is a favoured termination on the employee’s part. This applies when employees are entitled to severance payments even though they terminated the contract, for example, if they want to retire or end the employment relationship following a business transfer.

Severance payments depend on the length of continuous service, as follows:

• Three years’ service requires twice the last monthly salary.
• Five years’ service requires three times the last monthly salary.
• Ten years’ service requires four times the last monthly salary.
• 15 years’ service requires six times the last monthly salary.
• 20 years’ service requires nine times the last monthly salary.
• 25 years’ service requires 12 times the last monthly salary

Austria Tax

Income taxation

All individuals resident in Austria are subject to Austria’s income tax on their worldwide income, including income from trade or business, profession, employment, investment, and property. Non-residents are taxed on income from certain sources in Austria only. Non-residents are subject to income tax on Austrian-source income at normal rates (including a fictitious income increase of EUR 9,000).

Social security contributions

Employers and employees both contribute to these funds at various rates:

• Pension insurance: Employers contribute 12.55%, employees contribute 10.25%
• Accident insurance: Employers contribute 1.3%
• Health insurance: Employers contribute 3.78%, employees contribute 3.87%
• Unemployment insurance: 6% split equally among employers and employees

Others: Employers contribute 0.85%, employees contribute 1%

Health Insurance Benefits in Austria

Entitlement to time off

The employee and the employer can agree on unpaid time off. In this case, the employment relationship continues, but the duty to perform work and the payment of the salary are suspended.

Entitlement to paid time off

Employees who fall ill, or are injured unintentionally or without gross negligence, are entitled to paid sick leave for:

• A minimum of six weeks and a maximum of 12 weeks.
• A further four weeks (after the 12-week period has elapsed) on half-pay.

However, these allowances can vary depending on:

• The employee’s length of service.
• Whether the employee was ill within the last six months of employment.

If an accident takes place at work, the paid sick leave entitlement is:

• Eight weeks for white-collar employees (non-manual employees).
• Ten weeks for blue-collar employees (manual workers).

After the period of paid sick leave expires, employees can claim social security benefits from the state.

If the employer requests it, the employee must provide written medical confirmation of the illness or injury (but not of the diagnosis).

Additional Benefits in Austria

Some companies provide senior-level executives with company cars. Should this benefit be required, we recommend providing an employee with an allowance to cover his/her own car expenses.

Austria Holidays

There are 13 mandatory paid public holidays that are not included in the required number of vacation days. Employees who work on public holidays (which is only permitted in instances specified by law) will be paid for the hours that they really put in on top of their regular ongoing compensation (for working on Sundays and public holidays). Numerous collective bargaining agreements have provisions for overtime compensation for public holidays.

• New Year’s Day
• Epiphany
• Easter Monday
• Labor Day
• Ascension Day
• Whit Monday
• Corpus Christi
• Assumption Day
• Austrian National Day
• All Saints Day
• Immaculate Conception Day
• Christmas Day
• Boxing Day / St. Stephen’s Day

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.