Guide to employment, payroll and benefits in

Austria

Rivermate offers complete payroll, benefits and compliance services for

Austria

01. Overview

Last updated: 

August 19, 2021

Currency
Euro
Capital
Vienna
Ease of doing business
78.7
Language
German
Population
9006398
GDP growth
3.04%

02. Grow your team in

Austria

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Austria

, particularly if you don't have established local relationships. You can hire employees in

Austria

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Austria is a landlocked East Alpine country in the southern part of Central Europe, officially known as the Republic of Austria. Vienna, Austria's capital and largest city, is one of nine federated states that make up the country. It is bordered on the northwest by Germany, on the north by the Czech Republic, on the northeast by Slovakia, on the east by Hungary, on the south by Slovenia and Italy, and on the west by Switzerland and Liechtenstein. Austria has a population of nearly 9 million people and covers an area of 83,879 km2. While German is the official language of Austria, many Austrians speak a variety of Bavarian dialects informally. Austria began as a margraviate in 976 and grew into a duchy and archduchy. Austria became the heart of the Habsburg Monarchy and the junior branch of the House of Habsburg – one of history's most powerful royal dynasties – in the 16th century. It was a major component and administrative center of the Holy Roman Empire as an archduchy. Following its defeat in the Austro-Prussian War in 1866, Austria formed its own empire, which grew into a great power and the leading force of the German Confederation, but followed its own course independently of the other German states. The Austria-Hungary Dual Monarchy was created in 1867 as a result of a compromise with Hungary. Following the assassination of Archduke Ferdinand, the presumptive heir to the Austro-Hungarian throne, Austria entered World War I under Emperor Franz Joseph. Following the Monarchy's defeat and dissolution, the Republic of German-Austria was formed with the intention of uniting with Germany, but the Allied Powers refused to acknowledge the new state, and it remained unrecognized. In 1919, the First Austrian Republic took over as Austria's official successor. Adolf Hitler, an Austrian-born Chancellor of the German Reich, obtained the Anschluss, or annexation, of Austria in 1938. Austria was re-established as a independent and self-governing democratic nation known as the Second Republic after the defeat of Nazi Germany in 1945 and an prolonged period of Allied occupation. Austria is a parliamentary representative democracy with a Federal President who is directly elected by the people and a Chancellor who leads the federal government. Vienna, Graz, Linz, Salzburg, and Innsbruck are among Austria's major cities. Austria is regularly ranked among the world's top 20 wealthiest countries in terms of GDP per capita. The nation has a high standard of living, and its Human Development Index ranked it 20th in the world in 2018. In international quality-of-life rankings, Vienna consistently ranks first. In 1955, the Second Republic declared its everlasting neutrality in foreign political relations. Since 1955, Austria has been a member of the United Nations, and in 1995, it entered the European Union.

04. Public holidays

05. Types of leave

Paid time off

Employees are entitled to 25 days of paid voluntary leave after six months of work. For 25 years with the same company, employees are entitled to 30 days of paid regular leave.

Public holidays

There are thirteen public holidays in Austria.

Sick days

The amount of sick leave you're entitled to depends on how long you've been working:Employees with one year of employment have six weeks of sick leave. Employees who have been employed for two to fifteen years have eight weeks of sick leave. Employees with 16 to 25 years of employment have 12 weeks of sick leave. Employees with more than 26 years of employment have 12 weeks of sick leave. Any sick leave taken in excess of the above is provided by social security.

Maternity leave

In Austria, maternity leave lasts 16 weeks and can begin as early as 8 weeks before the anticipated due date. Leave after the birth is extended to 12 weeks for high-risk births.Maternity leave is funded by social security and is calculated using the total wages of the three months preceding the start of the maternity leave.

Paternity leave

Fathers are entitled to one month of unpaid paternity leave, which they will use before their child is 24 months old.

Parental leave

Parents should choose from two options:One parent can take anywhere from 12 to 28 months.It can take 15 to 35 months for both parents.Parental leave is available before the infant turns 24 months old. Parents are entitled to insurance from social security after parental leave under the Child Care Payment Act.

Other leave

06. Employment termination

Termination process

There are several types of termination in Austria. If a fixed-term contract is expiring, no action is needed. When employment ends by mutual consent, no notice period is required and can be in writing or verbally, however, termination in writing is recommended. Unilateral termination can be verbal or in writing and no reason for the termination needs to be provided. Dismissal terminates the employment agreement with immediate effect and a reason must be given. If the employee deems the dismissal unjustified, they are able to make a claim with the labor and social security courts. If the employee chooses to resign, this terminated the employment relationship with immediate effect.

Notice period

The notice period is calculated based on the length of employment. Six weeks' notice will be given to employees who have worked with the organization for less than two years. For employees who have worked for the organization for between two and five years, the notice period will be two months. Three months' notice is required of employees who have worked for the company for five to fifteen years. Four months' notice will be given to employees with a tenure of fifteen to twenty-five years. Employees having a cumulative service of more than twenty-five years are entitled to a five-month notice period.

Severance pay

Employers are required to contribute 1.53 percent of payroll to a provision fund beginning with the second month of employment. When an employment relationship ends, the employee is entitled to severance pay unless the employee initiated the termination or the employer terminated the employment agreement due to the employee's misconduct. To request payment from the provision fund, the employee must submit a written request within six months of termination.

Probation period

The probation period is fixed at one month.

07. Working hours

General

The usual workday and week are eight hours long and 40 hours long, respectively, however collective bargaining agreements might lower these durations. Employees can work up to 12 hours per day and 60 hours per week, with an average of 48 hours per week over the course of 17 weeks. Employees who have been on long-term sick absence or who are nearing retirement may be eligible for reduced hours.

Overtime

Overtime is either compensated with more time off or paid at a 150% rate. For night and weekend work, this rate rises to 200%, however, many collective bargaining agreements provide higher extras in general.

08. Minimum wage

General

Austria does not have a statutory minimum wage. Salaries are regulated by legislation, collective bargaining agreements, and work agreements, which are agreements between employers and labor unions. The actual salary paid will also vary according to the employee's position, responsibilities, education, qualifications, work hours, age, and length of service, among other factors.


In Austria, the average salary increase is 5% every 2.5 years. The magnitude and timing of increases vary by industry.


Bonuses are common, with employees frequently receiving a thirteenth and fourteenth payment equal to one month's salary each. Summer and end-of-year bonuses are generally referred to as holiday and Christmas bonuses.

09. Employee benefits

General

Adequate insurance coverage is usually supplied by the national system, which is funded by social insurance contributions paid by both employers and workers. Supplementary coverage may be given to employees as an extra benefit, although it is not as often negotiated as it is in the United States.

If people are obliged to travel for business outside of Europe, we highly advise that they be protected by a travel insurance plan.

Some businesses also offer corporate vehicles to top executives.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Austria

to hire a team takes time, money, and effort. The labor law in

Austria

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Austria

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Austria

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Austria

via our Employer of Record / PEO solution.

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