Hiring guide in Austria

Austria is known for having an excellent quality of life thanks to its robust social safety system, first-rate medical care, and favorable work-life balance. With several new businesses and well-established corporations functioning there, Austria boasts a vibrant technology industry. 

It follows that Austrian remote workers are more accustomed to the most recent technology and remote work tools. Also, Austria’s well-developed education system produces a highly skilled workforce with advanced degrees and training. 

And lastly, Austria has a high degree of English proficiency, making it simpler to communicate with remote workers. Therefore, Austrian remote workers are likely to be highly educated, motivated, and effective.

How can Native Teams help you hire in Austria

Native Teams can help you hire in Austria by providing expert knowledge of the local employment regulations and requirements. Native Teams will work closely with you to understand your hiring needs and preferences and provide a tailored solution that meets your requirements. Our employer of record services in Austria can assist you in finding competent people, integrating them into your team, and adhering to all applicable tax, benefit, and compensation laws and regulations.

 Hire your first Austrian employee with Native Teams.

Legal requirements for hiring in Austria

Contributions & taxes

Employer tax

Companies are typically taxed at a flat rate of 25% in Austria.

Corporate tax

The regular monthly contribution for optional insurance is EUR 440.32. The contribution rate as of January 2020 is 7.5% of the contribution basis. You may be able to lower your monthly self-insurance contributions in specific circumstances. Students may also co-insure their partners and kids.

Employee tax

Compared to the OECD average of 24.8%, Austria’s net average tax rate for a single worker in 2020 was 32.6%. To put it another way, the average single worker in Austria received 67.4% of their gross salary as take-home pays after taxes and benefits, compared to 75.2% for the OECD.

Income tax

The tax rate in Austria is progressive, meaning it varies according to an individual’s yearly income. Jobs, investments, commercial activities, and handmade goods sales are subject to income tax. Earnings from leasing out assets are included as well. All fees are reviewed and adjusted annually. Currently, they might be anywhere from 20% to 45%.

To calculate the salary and taxes in Austria please click here.

Payroll cycle

Salary payments are typically made on the last business day of the month, but this date can vary depending on the collective bargaining agreement or individual contract terms.

Is there a 13th salary in Austria?

In Austria, paying 13th and 14th-month salaries is common practice. Regular employees receive their annual income in 14 installments. In this case, payments 13 and 14 are made in June and November.

Labor rules

Probation period

Employment contracts in Austria frequently include probationary periods. White-collar workers in Austria are protected under the Salaried Workers Act, which states that a maximum one-month probationary term might be agreed upon.

Notice period 

• A 2-month notice period is required if the employee was employed for 2 to 5 years;
• A 3-month notice period is required if the employee was employed for 5 to 15 years;
• A 4-month notice period is required if the employee was employed for 15 to 25 years;
• A 5-month notice period is required if the employee has been employed for over 25 years.

Severance period

After 3 years of employment, the employee is entitled to 2 months’ salary as severance pay if the employment relationship is terminated. A year’s salaries are due to the employee after 25 years.

Working hours

Austria’s typical maximum work week is 60 hours, with a daily maximum of 12 hours (Arbeitszeitgesetz, AZG 9 (1)). More importantly, over a 17-week benchmark period, a weekly average of 48 hours must be maintained.

Leave and benefits

Public holidays

There are 14 official holidays in Austria:

Sick leave

Depending on the tenure of employment, different employees are entitled to different amounts of sick time:

• 1 year of employment: 6 weeks
• 2-15 years of employment: 8 weeks
• 16-25 years of employment: 10 weeks
• 26+ years of employment: 12 weeks

Social security will cover any additional sick time an employee takes beyond the threshold. The submission of a doctor’s note is required.

Maternity leave & paternity leave

The standard time spent on maternity leave in Austria is 16 weeks. Mothers are not permitted to return to work until after their maternity leave ends, typically 8 weeks after the baby is born and 12 weeks following a Cesarean section or high-risk delivery.

The Social Security Administration provides a weekly stipend to qualifying mothers during their time off to have a baby. This payment is calculated using the salary average of the last three months before starting Maternity Leave. The mother is eligible for unpaid Maternity Leave after 16 weeks, up until the child’s second birthday.

One month of unpaid paternity leave is available to all fathers, to be taken at any time between the child’s birth and the child’s second birthday. To be eligible for paternity leave, the father must tell his employer at least three months before the due date.

Other leave

Bereavement leave

1–3 days of paid time off are available for bereavement; the number of days off is specified in the employee’s employment contract or collective bargaining agreement.

Parental leave

The Child Care Payment Act guarantees parents benefit from social security when they are on parental leave for children younger than 24 months old. Fathers can take time off work while mom is on leave. Mother and father cannot take parental leave simultaneously but can switch “leave periods” twice during the leave duration, with each separation being at least two months. 

Family care leave

An employee has the right to request up to 6 months of unpaid leave to care for a member of their immediate family.

What are the minimum vacation days?

An employee in Austria who has been with the company for at least six months is entitled to 5 weeks’ worth of paid vacation time annually. There is an increase to 6 weeks of paid time off for employees who have been with their company for 25 years or more. The minimum number of years an employee must have worked for one company is lowered from 15 to 13 when the person’s previous work experience and educational periods are considered. In addition, separate collective agreements may provide exceptions to this general rule.

Insurance

Health security & private insurance

Anyone who has worked for an employer for at least three months within the previous fifteen months is entitled to free medical and dental care through the Social Security Administration.

*Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices.*

Visa

Relocation and work permits 

Native Teams will apply for your work visa in the nation on your behalf and serve as your Employer of Record. All the required documents can be uploaded using our app. Until you have your work and residency visa, Native Teams will support you by providing you with frequent information on the progress.

How long is the visa/work permit process?

2 to 4 weeks, depending on the authorities and provided documents.

Which documents do you need?

To apply for a visa/work permit in Austria, upload the documents from our onboarding list (relocation to log in/pricing).

Why use Native Teams for hiring in Austria?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.