Austria

Austria PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Austria to companies willing to enter the Austrian market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Austria.  However our solution allows you to start the operations in Austria within days hence save time and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. .

Austria fast facts

Population, million: 8.9
Land area: 83,879 km²
Capital: Vienna
Local currency: EUR

Austria is a federal republic and a landlocked country of over 8.8 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Hungary and Slovakia to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the west.  The terrain is highly mountainous, lying within the Alps.

Hiring, Negotiating and Doing Business in Austria

Necessity of written employment contract

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.

Different forms of engagement: employment, contracting, work with 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 (or ten hours including overtime), and the maximum working week is 40 hours (or 50 hours including overtime) (section 3, Working Hours Act 1969). There are a number of exceptions (for example, flexible work time, other distribution of working hours implemented by a CBA or a works agreement (four-day-week, 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.

Some CBAs have decreased the standard weekly maximum to, for example, 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

Pregnant employees and mothers are protected from dismissal from the date of pregnancy until at least four months after giving birth. During this time, they can only be dismissed with judicial consent. If employees who have given birth, and are legally allowed to return to work, claim maternity leave or part-time employment, protection from dismissal usually ends four weeks after the maternity leave or part-time employment ends.

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’ service requires four months’ notice.
  • More than 25 years’ 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

Grossed income

Tax Rate (%)

1-11,000

0

11,001-25,000

36.5

25,001-60,000

43.21

60,001 and over

50

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, 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 paid public holidays, which have to be provided and are not included in the minimum holiday entitlement. If employees work on public holidays (which is only allowed in the cases permitted by law) they will receive salary for the working hours actually provided in addition to their regular continued remuneration (for work on Sundays and public holidays). Many collective bargaining agreements provide for extra pay for overtime on 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.

 

FAQ Austria

  • Austria working hours

    The maximum working day is eight hours (or ten hours including overtime), and the maximum working week is 40 hours (or 50 hours including overtime)

  • Austria 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
  • Severance payments in Austria

    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
  • Hannah Kohl
    Author:
    Hannah Kohl. Head of Customer Success. Has extensive experience in the HR and IT industries. Helped 100+ international clients to achieve their global goals.

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