How to hire and pay employees in Austria
With Instahirin, your business can easily hire employees in Austria. No more worrying about local laws, complex tax systems, or managing international payroll.
Before hiring
EMPLOYEES IN The Austria
Before hiring employees in Austria, one key thing employers should be aware of is the country’s strict compliance with the EU General Data Protection Regulation (GDPR). Employers must ensure that employee personal data is collected, processed, and transferred securely, with explicit consent and transparency, especially for any cross-border data transfers.
Another important consideration is Austria’s labor laws and mandatory benefits. Employers are required to contribute to the social security system, which covers health insurance, pension insurance, unemployment insurance, and accident insurance. Employees are entitled to paid annual leave (typically five weeks), public holidays, sick leave, and parental leave. Collective bargaining agreements often shape employment terms, including wages and working hours. Employment contracts should be clear and follow the Austrian Employment Law and Working Time Act.
At a glance
CURRENCY
EUR
OFFICIAL LANGUAGE
German
PAYROLL FREQUENCY
Monthly
EMPLOYER TAXES
22.51%
of gross salary
13th / 14th SALARY
N/A
Good to know
Austria provides universal healthcare through a comprehensive social insurance system, funded by employer and employee contributions. This covers medical care, hospitalization, and prescriptions. Employers contribute around 21% to 22% of gross salary toward social security, including healthcare, pension, and unemployment insurance.
The standard workweek is 38.5 to 40 hours, depending on the sector. Overtime must be compensated with extra pay or time off, generally at 125% of the normal rate. Employees are entitled to 25 days of paid annual leave, plus public holidays, which vary by region.
Labor laws in Austria
Working hours and overtime
Regular working hours in Austria include an eight-hour workday and a 40-hour workweek.
Many industries have collective agreements which shorten the regular workweek to 38 hours. Other collective agreements extend the regular workday to 10 hours over four days, enabling a long weekend.
Collective agreements in specific industries, such as tourism and service, stipulate that certain weeks may include more or less than normal working hours as long as the yearly average is 40 hours per week.
Employees log overtime hours for any time worked past the regular eight-hour workday or 40-hour workweek. Employers must pay an additional 50% in money or time balance for employees that work overtime.
Employers can only ask employees to work overtime if the excess work does not interfere with the employer’s personal interests, such as childcare or personal appointments.
Employment contracts
Contracts must be in German or English and can be bilingual. They must be in writing and signed by both parties.
A contract must include:
- Name
- Address
- Start date
- Length of the employment
- Place of work
- Termination period and date
Probationary period
Austrian law mandates that probationary periods in employment relationships be limited to one month.
In the case of apprenticeships, however, probationary periods span the first three months
Calculate costs to hire internationally
Benefits and leave in Austria
Annual leave in Austria
In Austria, employees are entitled to 25 working days (5 weeks) of paid annual leave each year. This leave increases to 30 days for those working six days a week and can be carried over for up to two years. Public holidays are separate and do not count toward annual leave.
Sick leave
Employers must continue to pay employees suffering from sickness, an industrial accident, or an occupational illness, as well as employees going through rest cure or convalescence leave. The length of paid leave depends primarily on the employee’s seniority and whether the employee is a white-collar or blue-collar worker.
Once an employer has fulfilled its sick-pay obligations, the health insurance provider is responsible for paying an employee.
Parental leave
Employees are entitled to 2 months of parental leave (Karenz) until the child turns 24 months old. Both parents can decide how to distribute the time off. Either parent can take parental leave. Parents are entitled to payment under the Child Care Payment Act. Parents may choose from two childcare allowance systems:
- Childcare allowance account (flat-rate system)
- Income-related childcare allowance
Parental leave can be extended. It is unpaid.
Holidays
Austria has 13 national public holidays each year, which are separate from annual leave. These holidays apply across the country, though some regional holidays may also be observed in certain provinces.
Employer tax
In Austria, employers typically contribute around 21% to 22.8% of an employee’s gross salary to mandatory social security schemes, covering pension insurance, health insurance, unemployment insurance, accident insurance, and other employee benefits, with exact rates depending on income thresholds and collective agreements.
Individual tax
In Austria, individuals pay progressive income tax ranging from 0% to 55% based on annual income. The tax system includes several brackets, with no tax on income up to a certain threshold. In addition to income tax, employees also contribute approximately 18% of their gross salary to social security, which covers pension, health, unemployment, and accident insurance. The overall tax burden varies depending on income level and deductions.
Termination in The Austria
In general indefinite contracts may be terminated without cause as long as regulatory notice periods are followed.
Fixed-term contracts have additional restrictions and conditions.
Compliant terminations include:
- Voluntarily by the employee
- By mutual agreement
- By the expiration of the contract
Notice period
The minimum notice period is 6 weeks and the maximum notice period is 5 months. Notice periods will be increased according to the length of the employment.
- Less than 2 years 6 weeks
- Between 2 to 5 years 2 months
- Between 5 to 15 years 3 months
- Between 15 to 20 years 4 months
- Over 25 years 5 months
Start hiring employees in
Austria
Setting up a business entity in every country where you want to hire isn’t scalable it’s time-consuming, expensive, and legally demanding. In Austria, navigating labor laws, tax requirements, social insurance contributions, and collective bargaining agreements can be complex. Handling contracts, payroll, and compliance manually through emails and spreadsheets increases the risk of errors and inefficiencies.
With InstaHirin, you can easily manage HR, payroll, and automate compliance in Austria and 180+ countries all from one user-friendly platform so you can hire quickly and confidently without setting up a local entity.
Disclaimer: The information provided in this resource is for general educational purposes only and shall not be construed as legal advice. While InstaHirin yster strives to provide current and accurate information, InstaHirin makes no warranties or representations as to the correctness of the content provided and accepts no liability or responsibility for any errors or omissions in the content provided. By using this resource you acknowledge and agree that you do so at your own risk. The content of this resource is subject to change without notice.
