Austria

Employer of Record (EOR) in Austria

Only 399 EUR per employee per month

Rivermate's Employer of Record (EOR) solution helps companies hire remote employees in Austria . We take care of global payroll, taxes, benefits, compliance and HR activities. So you can focus on growing your business. Our Employer of Record (EOR) solution is beneficial to companies that want to hire remote employees in a breeze. On this page you will find employment information for Austria.

Employer of Record people
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Currency
Euro
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Capital
Vienna
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Region
Europe
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Language
German
Hire remote employees
Population
9006398
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GDP
$417 billion
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GDP growth
0.0304
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Ease of doing business
78.7
Planet earth
World GDP share
0.0052

1. Grow your team in Austria with Rivermate as your Employer of Record (EOR) / PEO

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 Employer of Record (EOR) solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

2. Summary

Austria, formally the Republic of Austria, is a nation in Central Europe's southernmost region. It is a federation of nine states, one of which is the capital Vienna, the most populous city and state. The nation is bounded to the northwest by Germany, to the north by the Czech Republic, to the northeast by Slovakia, to the east by Hungary, to the south by Slovenia and Italy, and to the west by Switzerland and Liechtenstein. It has a population of 9 million people and a landlocked area of 83,879 km2 (32,386 sq mi).

At the end of the first millennium, Austria arose from the ruins of the Eastern and Hungarian March. Originally a Bavarian margraviate, it became a duchy of the Holy Roman Empire in 1156, and then an archduchy in 1453. Vienna started functioning as the administrative imperial seat in the 16th century, and Austria, therefore, became the stronghold of the House of Habsburg. Following the breakup of the Empire in 1806, Austria founded its own empire, which grew to become a major power and the dominating member of the German Confederation. The loss of the Austrian Empire in the Austro-Prussian War of 1866 ended the Confederation and cleared the ground for the foundation of Austria-Hungary a year later.

Following Archduke Franz Ferdinand's murder in 1914, Emperor Franz Joseph declared war on Serbia, beginning World War I. Following the Empire's defeat and subsequent collapse, the Republic of German-Austria was established in 1918, followed by the First Austrian Republic in 1919. Anti-parliamentary attitudes resulted in the creation of an Austrofascist dictatorship under Engelbert Dollfuss in 1934 during the interwar era. Adolf Hitler incorporated Austria into Nazi Germany a year before World War II began, and it became a sub-national entity. Following its liberation in 1945 and a lengthy period of Allied occupation, the nation regained sovereignty in 1955 and proclaimed everlasting neutrality.

Austria is a parliamentary representative democracy with a president who is chosen by the people and a chancellor who is the head of government and chief executive. Vienna, Graz, Linz, Salzburg, and Innsbruck are among the major cities. Austria is routinely recognized as one of the world's wealthiest nations by GDP per capita, as well as one of the countries with the greatest quality of life, and was placed 18th in the world for its Human Development Index in 2020.

Austria has been a UN member since 1955 and a member of the European Union since 1995. It is a founding member of the OECD and Interpol, as well as the OSCE and OPEC. In addition, it ratified the Schengen Agreement in 1995 and embraced the euro in 1999.

Hiring talented employees in a short span is not an easy task. Partnering with an Employer of Record (EOR) like Rivermate in Austria is your best option, giving your organization enough time to focus on other aspects of international expansions like project management and inventory management. The EOR takes care of all the compliance and legal issues while helping you speed up hiring using their knowledge of domestic employment practices and virtual onboarding tools. Top EORs also have provisions for the e-signing of documents to enable faster onboarding.

3. Public holidays

4. Types of leave

There is no information about the types of leave for this country.

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

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.

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

5. Employment termination

There is no information about employment information for this country.

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.

Probation period

The probation period is fixed at one month.

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.

6. Working hours

There is no information about the working hours for this country.

General working schedule

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.

7. Minimum wage

There is no information about the minimum wage for this country.

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.

8. Employee benefits

There is no information about the employee benefits for this country.

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.

9. Taxes

There is no information about the taxes for this country.

Corporate tax

Corporations with their legal seat or location of effective administration in Austria are liable to unrestricted taxes on their whole revenue.

Corporations are considered separate tax subjects; nevertheless, a difference must always be made between tax implications at the business level and those at the shareholder level. Profits are taxed at the corporation level at the normal corporate income tax rate of 25%. Profit distributions are typically subject to a withholding tax of 25% for companies and 27.5 percent for other beneficiaries at the shareholder level.

A minimum tax (Mindestkörperschaftssteuer) of 5% of registered capital is also levied on both limited liability corporations (LLC) and joint-stock firms. Specifically, €1,750 and €3,500 each year. Banks and insurance firms face a separate penalty - €5,452. In the first year of operation, new businesses pay a reduced tax of €1,092.

Individual income tax

Individuals with a permanent or habitual residency in Austria are subject to unrestricted taxes. Because every money (whether earned within or outside of Austria) must be taxed, the possibilities are endless. Furthermore, even if a person does not have a home or habitual abode in Austria, certain income may be taxed.

Austria's income tax was gradually phased in beginning in 1988. Since then, there have been many modifications.


For individuals whose salary belongs to the salary range 0 to €11,000, the marginal tax rate is 0.

For individuals whose salary belongs to the salary range €11,001 to €18,000, the marginal tax rate is 25 percent.

For individuals whose salary belongs to the salary range €18,001 to €31,000, the marginal tax rate is 35 percent.

For individuals whose salary belongs to the salary range €31,001 to €60,000, the marginal tax rate is 42 percent.

For individuals whose salary belongs to the salary range €60,001 to €90,000, the marginal tax rate is 48 percent.

For individuals whose salary belongs to the salary range €90,001 to €1,000,000 the marginal tax rate is 50 percent.

For individuals whose salary is over €1,000,000, the marginal tax rate is 55 percent.

VAT, GST and sales tax

An Austrian customer must pay the net sales amount + 20% VAT, which is separately stated on the supplier's invoice. In essence, the client bears the supplier's tax burden. Following that, the sum is deducted from the customer's personal value added tax burden.

The final burden is borne by the end retail customer. Exports and some services for overseas consumers, for example, are free from value added tax. Imports from non-EU nations are subject to an import turnover tax, which is levied at the same rate as sales tax.

On some goods, such as basic meals and printed materials, the value added tax is lowered to 10%. In addition, hostel accommodations are subject to a 13% VAT.

10. VISA and work permits

There is no information about VISA and work permits for this country.

Foreign visitors who intend to visit this country should first become acquainted with the travel restrictions in Europe. They must also confirm whether they require a visa or travel authorization.

The visa requirements for entering Austria vary depending on nationality, but as previously stated, they are the same as for the rest of the Schengen countries. These requirements vary depending on the purpose of the visit and the length of stay.

According to the Austria Visa Policy, all third-country citizens are either visa-free or require a consular visa, which is a Schengen Visa used not only to visit Austria but also the other Schengen countries.

The good news is that the European Commission will officially launch ETIAS, an electronic visa waiver system, by 2022. This document will be required for visitors to Austria and the other Schengen countries, and it will be available for current visa-free countries that are not part of the Schengen Agreement.

This does not mean that consular visas for entry into Austria will no longer be available; they will still be available to certain travelers.

11. Employer Of Record service terms

There is no information about the Employer of Record (EoR) service terms for this country.

Employment contracts

In Austria, it is best practice to have a robust employment contract in place that specifies out the conditions of the employee's remuneration, benefits, and termination criteria. In Austria, an employment contract shall always indicate the salary and any other remuneration amounts in Euro rather than a foreign currency.

With Rivermate being your Employer of Record (EoR) in Austria, you do not have to worry about the employment contracts, as we take care of that.

Minimum assignment length

There is no set length for assignments. This is usually indicated in the employment contract for fixed-term employments.

Payment currency

Euro (EUR)

13.Opening a subsidiary in Austria

There is no information about the working hours for this country.

How to set up a subsidiary

How to establish an Austrian subsidiary should begin with some thought about how and where you want to operate. Austria's subsidiary regulations differ by city or area, making incorporation either simple or complicated. If you're unsure about the appropriate location for your business, we suggest consulting a consultant or lawyer who can propose a suitable physical office space.

The procedure for establishing an Austria subsidiary is also dependent on the kind of organization you choose to create. You may form a limited liability company (LLC), a public corporation, a partnership, or a foreign branch. Whichever entity you pick will have an effect on the kind of activity you may conduct in Austria. The majority of businesses form an LLC since the structure benefits both the subsidiary and the parent company.

Establishing an Austrian subsidiary as an LLC entails the following steps:

1. Confirmation from the Economic Chamber that your start-up business is, in fact, a new enterprise

2. Notarizing your corporation's bylaws and articles of incorporation, as well as the declaration of formation

3. Depositing the required minimum capital at a bank

4. Registering your business with the appropriate court

5. Obtaining a VAT identification number

6. Obtaining a trading license from the appropriate authorities

7. Obtaining social security numbers for your staff

8. Registration with the local government

Subsidiary laws

Austria's subsidiary rules require you to get a business license before paying resident personnel. Locally, you may get a trade license via the municipal court or through a district management team. Additionally, LLCs need an Austrian bank account in order to pay workers – this process normally takes four weeks.

Bear in mind that Austria's subsidiary regulations differ according to the kind of organization chosen. Registration may take many weeks to months, and you'll also need to recruit personnel that understand human resources, taxes, and employment compliance, among other things.

13. Why choose Rivermate as your Employer of Record / PEO in Austria

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 (EOR) 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 (EOR) / PEO solution.

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