Employer of Record in Austria

How an Employer of Record works in Austria

An Employer of Record (EOR) simplifies hiring in Austria by serving as a legal employer, managing local compliance, payroll, taxes, and benefits, without requiring foreign companies to establish a local entity.

Partnering with an EOR like Rivermate provides international employers with an efficient and practical way to hire. Unlike setting up a local legal entity which can take months, Rivermate can offer the benefit of onboarding an employee in Austria within one week.

Austria labor market: At a glance

The hiring market
Greatest hiring activity:	Increase in recent years, strong activity in Vienna as well as in Graz.
Hiring timelines:	About one week once all documentation is available. Foreign new hires must already be in possession of a work permit.
In-demand sectors:	Automotive, sales, IT (highest salaries).
Sectors with skills shortages:	Healthcare, engineering, crafts, construction, tourism.

The salary market
Employer tax contributions:	20.38% social security contributions 3.7% (DB) + surcharge (DZ) 3% municipal tax 1.53% BV ~ 0.5% WF (depends on federal state) 0.1% Insolvency Fund (IESG)
Monthly minimum wage:	No statutory nation-wide minimum; minimum wages are regulated by sector-specific Collective Bargaining Agreements.
Median gross annual salary:	€38,043 (2024) - including part-time/part-year employees.
€55,678 (2024) - only full-time/full year employees.
Income tax rates:	Progressive marginal tax rates, per total annual chargeable income schedule as follows (zero-rated up to €13,539):

€13,540 - €21,992: 20% tax €21,993 - €36,458: 30% tax €36,459 - €70,365: 40% tax €70,366 - €104,859: 48% tax €104,860 - €1,000,000: 50% tax Above €1,000,000: 55% tax |

Statistics Austria has estimated that the national median annual gross salary stood at €55,678 (2024-data) across all employees working full time and having been employed for the full year.

What will it cost to hire in Austria?

Austria does not have a single federal statutory minimum wage; instead, base salaries are governed by sector-specific Collective Bargaining Agreements (Kollektivverträge or KVs). The KVs mandate gross monthly salary minimums based on job functions, qualifications and years of experience.

Base salary

If no KV can be selected based on employee-specific job position and qualifications, the Personnel Leasing/EOR KV will be applicable. In that KV, the following minimum monthly gross salaries apply (on a 14th-salary schedule):

• Entry level: gross €2,327 / month
• Skilled Worker: gross €2,931 / month
• Technician: gross €4,157 / month

By contrast, the following minimums apply under the Information Technology KV:

• Entry level IT support: gross €2,236 / month
• Junior Developer: gross €3,104 / month
• Experienced level (LT): gross €6,781 / month

And some indicative minimum salaries for Industrial sector KV (Metalworking):

• Entry level: gross €2,572 / month
• Standard level: gross €2,949 / month
• Advanced: gross €3,809 / month

Employer taxes and contributions

Both employers and employees contribute to Austria’s social security system. Taxes and contributions are reported via an electronic system (ELDA) and remitted monthly.

Social security contributions are capped at a monthly maximum base of €6,930. The total social security contribution paid by the employee is set at 17.57% while the employer’s share equals 20.38%, split into the following contributions (before the Housing Promotion Fund contribution and the Insolvency Remuneration Fund surcharge):

Fund	Employer	Employee
Health	3.78%	3.87%
Pension	12.55%	10.25%
Unemployment	2.95%	2.95%
Accident	1.10%	0%
Labor Chamber	-	0.5%
TOTAL	20.38%	17.57%

In addition to the above, employers also contribute to a Family Burden Equalization Fund (FLAF) at a rate of approximately 3.7% plus a surcharge; a Housing Promotion Fund (WF) at a rate of approximately 0.5% (depending on location, 0.75% in Vienna), as well 0.1% to the Insolvency Remuneration Fund surcharge (IESG). Employers also contribute to the Severance Fund (Abfertigung Neu) at a rate of 1.53%. A 3.0% Municipal Tax (Kommunalsteuer) is also payable.

As a general budgeting rule, employers should expect payroll-related employer costs of around 30% on top of gross salary, although the actual cost varies depending on the employee, location and applicable charges.

Statutory benefits

Austrian employees are typically paid 14 times per year: in addition to 12 general monthly payroll cycles, an additional holiday pay (Urlaubsgeld) is usually paid in June or July, as well as a Christmas bonus (Weihnachtsgeld), usually paid in November. These two payments are regulated by applicable CBAs and are taxed at lower rates than regular monthly salaries, so employees end up receiving higher net amounts from them. New hires and departing employees receive a pro-rated amount of these 2 additional payments based on the duration of their employment in the year in question.

In terms of working hours, the standard workload in Austria is 40 hours per week (8 hours per day) even though some CBAs may reduce it to 38.5 hours. Average weekly hours may not exceed 48 hours over a reference period (including any overtimes worked) or 60 hours in any single week.

Our Austrian expert warns against lax timekeeping. Accurate working time records and tracking of any overtime, holiday work or annual leave taken is paramount to safeguarding against any future disagreements or disputes.

Below is an overview of premiums and benefits typically paid to employees in Austria.

• Overtime is paid at least at a 50% premium or in time off in lieu (1:1.5 ratio).
• Employees receive a statutory annual paid leave of at least 25 working days per year. This figure is increased to 30 days per year for workers with more than 25 years of service at the same employer. Unused leave can carry over for up to two years (under conditions) and any remaining balance must be paid out upon termination.
• Sick leave is usually paid by the employer for an initial period depending on their years of service (eg. 6 weeks full pay + 4 weeks half-pay for any sickness during the first year). After that period ends, the health insurance fund takes over.
• Maternity leave is paid (via “maternity allowance”) by social security for a total of 16 weeks (8 weeks before birth and 8 after, may be extended in cases of complications). Paternity leave is allowed for up to a month, and is unpaid, though a social security benefit may be applicable.
• Care for a sick household member of up to 1 week per year is also statutorily granted. A separate Parental Leave can also be taken until the child turns two.

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What hiring in Austria really looks like

Market condition	Current reality	Comments
Hiring momentum	🟢 Active	Strong demand in sales, tech and automotive.
Talent availability	🟡 Moderate	Large pool overall, but concentrated in major hubs.
Salary pressure	🟡 Moderate	Base salary floors adjusted upwards under CBA (KV) reviews.
Employer cost	🔴 Significant	Employers should expect to pay around 30% on top of gross pay.
Work permit procedures	🔴 Restrictive	EOR providers cannot sponsor work permits.
Candidate expectations	🔴 High	Strict alignment to local labor laws is expected; Chamber of Labor advising workers.

As our local expert highlights, onboarding documentation requirements in Austria are pretty standard, with a passport, bank details, social security number and a CV required. The CV (along with a job description/job role) is essential for purposes of determining which CBA the employee will fall under. Employees automatically move up salary bands based on the years of professional relevant experience stated on their CV.

Registration of employment must be done ahead of the start date, so backdating contracts is not possible. If employment registration is delayed, penalties may apply. The Chamber of Labor in Austria (Arbeiterkammer) is the body which actively protects employee rights and provides advice and legal support to employees.

What you should know when hiring expats in Austria

EEA and Swiss citizens do not require work permits to work in Austria. However, third-country nationals need a combined work and residence permit (Red-White-Red Card) or an EU Blue Card. Both permits are tied to a specific employer and employers must fulfil a number of criteria, including having its own operational location/workplace. As Rivermate cannot act as the legal entity sponsoring the work permit, only foreign nationals who are already in possession of authorization to work can be hired through the EOR model (such as the Red-White-Red Plus Card or other valid permit)

Other work permit routes (such as a Job Seeker Visa or an Intra-Company Transfer) may also be possible.

Compliance risks employers must know about

Fixed-term contracts

The default option for contracting in Austria is an indefinite employment agreement as fixed-term agreements must be based on a genuine temporary need. Consecutive fixed-term contracts (“chained contracts”) are subject to restrictions and may require objective justification.

Probationary period

The maximum duration is one month (three months for apprentices). During the probationary period, either party may terminate without notice.

Notice periods and terminations

Employer-initiated notice periods vary by length of service and range from 6 weeks and up to 5 months for employers; always one month for employees. Employers may terminate contracts in Austria without citing a specific cause but must not do so in a discriminatory or retaliatory manner. Severance is handled through the Severance Fund (Abfertigung Neu) and not as direct payment from the employer during separation. Termination exemptions include some categories or workers which are protected (eg. during pregnancy or maternity) as well as any other breaches of anti-discrimination laws.

Benefits of hiring employees through an EOR in Austria

Employment in Austria comes with its own challenges, but there is a faster, more affordable and easier way to hire in Austria. Rivermate has the infrastructure and local resources to support your hiring needs. With the help of local HR and legal experts who understand the intricacies of Austrian laws, whether you want to hire a single employee or a small team, Rivermate can support your hiring strategy while you can focus on building your business.

Ready to hire in Austria?

Already found the person you want to hire in Austria? Talk to an Austrian hiring Expert now.

Sources:

WKO CBA repository
Statistics Austria: Annual Personal Income 2024
PwC Tax Summaries Austria
Migration FAQ
Austria-wide shortage occupations