Establish your presence globally with Neeyamo as we help you go beyond borders to manage your international payroll and hire new talent in Austria.
Overview
While croissants have become predominantly associated with France, their origins can be traced back to Austria, where they were initially referred to as "kipferl." Austria, a landlocked nation surrounded by the Czech Republic, Slovakia, Hungary, Slovenia, Italy, Switzerland, Liechtenstein, and Germany, is the birthplace of Red Bull as well. The genesis of Red Bull transpired when an Austrian entrepreneur discovered a beverage with jetlag-alleviating properties during a trip in Thailand. Fueled by the ambition to import this formulation to Austria, he subsequently established the groundwork for what would later become Red Bull.
Austria prides itself on its status as a cutting-edge industrialized country, attributing this reputation to its remarkable economic achievements, widespread prosperity, and exceptional quality of life within its borders. If your organization’s expansion plans require you to hire employees in Austria and you lack a physical entity in the country – a key requisite to hiring local talent, look no further. Neeyamo assists organizations worldwide with onboarding and managing employees in Austria - processing payroll, managing local compliance requirements, benefits, and more.
Facts And Stats
Capital
Vienna
Currency
Euro (EUR)
Official Language
Austrian German
Fiscal Year
January 1 - December 31
Date Format
DD/MM/YYYY
Country Calling Code
+43
Other Languages
Croatian, Hungarian, Slovenian, Turkish
Time Zone
UTC +02:00
Global Payroll
Overview
How does Payroll work?
Payroll is the list of compensation to be paid to employees of a company or organization for a set period or date.
Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can make things worse. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity.
Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform - Neeyamo Payroll. Neeyamo's global payroll services ease the process for companies looking to outsource their global payroll requirements and aid them in maneuvering the tricky payroll system in Austria.
Payroll Taxes
Neeyamo handles all your global payroll management needs, including your payroll tax. Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees.
What is Payroll register?
The record of payroll information for each employee for each pay cycle is known as a payroll register.
Employee Taxes
The employee payroll contributions are as follows:
Health Insurance - 3.87%
Old-Age Pension Insurance - 10.25%
Unemployment Insurance - 3.00%
Total Employee cost - 17.12%
New income tax brackets for 2024:
The government has published new tax brackets for 2024 with the following rates:
- 0% tax rate for earnings up to €12,816
- 20% tax rate for earnings between €12,816 and €20,818
- 30% tax rate for earnings between €20,819 and €34,513
- 40% tax rate for earnings between €34,514 and €66,612
- 48% tax rate for earnings between €66,613 and €99,266
- 50% tax rate for earnings above €99,266
Employer Taxes
The employer payroll contributions are as follows:
Health Insurance - 3.78%
Accident Insurance - 1.20%
Old-Age Pension Insurance - 12.55%
Unemployment Insurance - 3.00%
Insolvency Guarantee Funds Contribution - 0.55%
Total employment cost - 21.08%
Payroll Cycle
Overview
Undoubtedly, payroll is a critical process for any organization. Pay cycle in Austria refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.
Frequency
In Austria, salaries are paid monthly, and wages must be paid by the end of the month.
13th Month Cycle
It is customary to pay 13th and 14th salaries in Austria. The 13th and 14th payments are paid out in June and November.
Global Work
Overview
An Employer of Record (EOR) service provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a local registered entity and a local bank account, prior to making a job offer to an international hire.
An EOR service provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, and employee benefits ensuring compliance with local tax laws and regulations.
This allows organizations to focus on collaborating with the employee in Austria for operational tasks, with the knowledge that they have a cost-effective solution support their global payroll & HR requirements, as they continue their global expansion.
HR Mandates and Practices
Minimum Wage
As of 2022, Austria has a minimum wage of 1,700 EUR per month for a full-time employee.
Overtime
In Austria, anything over 40 hours per week is paid at a rate of 150% of the regular pay.
Data Retention Policy
- Employers should maintain immigration checks, visas, work permits, and other similar documents issued under the Employment of Foreign Workers Act for three years after termination of employment.
- Employers should retain social security documents for at least five years after they have paid the applicable social security contributions.
- Employers should retain documents related to the rejection of an employee’s application or promotion for six months.
- Employers should retain employment-related documentation, such as employment agreements, bonus arrangements, and pay slips, for three years after an employee’s termination unless a longer retention period applies.
Tax free treatment of employer-provided public transport tickets:
With effect from January 1, 2023, the employer-provided public transportation ticket is not taxable income for a commuting employee.
Tax credit to Full-time employees:
With effect from March 1, 2023, employees will get a tax credit of 100 Euros for each month of full-time employment.
Increment to tax free surcharge for employment income:
With effect from March 1, 2023, the time frame for the monthly tax-free overtime pays to 50% of the basic wage is increased to the first 20 overtime hours.
Hiring and Onboarding Requirements
Hiring
Austria employment compliance laws allow employment contracts to be concluded in writing, verbally, or implicitly. If a contract is not in writing, employers must provide their employee with a Dienstzettel, a statement of terms and conditions including workplace, duties, and wages, upon hire. Employment contract should be written these contracts will spell out benefits, compensation, termination requirements, and more. All salary and compensation amounts should be in Euro instead of another currency, and it must be ensured that the contract is in the local language.
Onboarding
The steps involved for onboarding in Austria is as follows:
- Onboard multiple employees together to save time and encourage bonding
- Provide on-the-job training
- Review the employment contract and any other important company documents
- Travel to Austria to be there in-person for the on boarding process
Probation
The standard probation period in Austria must not exceed 1 month, except for apprenticeships where probation period is typically three months.
Leave
Public Holiday
National Holidays
There are 13 public holidays.
- January 1: New Year's Day
- January 6: Epiphany
- April 2: Good Friday
- April 3: Easter Saturday
- April 4: Easter Sunday
- April 5: Easter Monday
- May 1: Staatsfeiertag
- May 9: Mother's Day
- May 13: Ascension Day
- May 23: Pentecost
- May 24: Whit Monday
- June 3: Corpus Christi
- August 15: Assumption
- October 26: National Holiday
- November 1: All Saints' Day
- December 8: Immaculate Conception
- December 24: Christmas Eve
- December 25: Christmas Day
- December 26: Boxing Day
- December 31: New Year's Eve
Annual Leave
The statutory holiday entitlement in Austria is five weeks, 25 days per year for an employee who has completed six months of employment. Once an employee completes 25 years or longer for the same employer the entitlement increases to six weeks which is 30 days.
Sick Leave
Sick leave entitlement varies based on the length of employment:
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
Any sick leave beyond the above entitlement is covered by social security.
Providing a medical certificate is a necessity. Failure to comply with it will result in the revoking of an employee’s right to sick pay.
Maternity Leave
In Austria, maternity leave is for 16 weeks and can begin as early as 8 weeks before the expected due date. For high-risk births, leave after the birth is extended to 12 weeks.
Maternity leave is paid by social security and is calculated using the average earnings of the 3 months preceding the start of the maternity leave.
Paternity Leave
Fathers are entitled to 2 month of unpaid paternity leave, which they can take until their child turns 22 months old.
Parental Leave
The total parental leave entitlement in Austria is 22 months, but each parent has a non-transferable entitlement of two months. And parents can transfer up to two months of parental leave between each other.
Other Leave
Employees are also entitled to other additional leave periods such as:
- 2 weeks of paid leave to care for a sick child under the age of 12.
- An employee can also request up to 6 months of unpaid leave to care for an immediate family member.
- 1 – 3 days paid leave for marriage or bereavement the exact days leave will be outlined in the employee’s collective bargaining agreement or employment contract.
Termination
Overview
The termination of an employee's services in Austria by an employer requires advance notice. The legal minimum term of notice for salaried employees is calculated per the duration the employee has served in the company.
- Less than two years, then the period of notice to terminate employment will be six weeks.
- Less than 3 – 5 years, then the period of notice to terminate employment will be 60 days.
- Less than 6-15 years, then the period of notice to terminate employment will be 90 days.
- Less than 16-25 years, then the period of notice to terminate employment will be 120 days.
- 26 years and above, then the period of notice to terminate employment will be 150 days.
Notice Period
The notice period is distributed in the following way:
- An employee serves two months’ notice if the employment lasted 2 to 5 years.
- An employee serves three months’ notice if the employment lasts 5 to 15 years.
- An employee serves four months’ notice if the employment lasts 15 to 25 years.
- An employee serves five months’ notice if the employment lasts more than 25 years.
Severance Pay
The severance pay is made in the following manner:
- Less than five years of employment, then the severance pay is two times the regular salary payment.
- 5-10 years of employment, then the severance pay is three times the regular salary payment.
- 10-15 years of employment, then the severance pay is four times the regular salary payment.
- 15-20 years of employment, then the severance pay is five times the regular salary payment.
- 20-25 years of employment, then the severance pay is nine times the regular salary payment.
- 25+ years of employment, then the severance pay is 12 times the regular salary payment.
Visa
Overview
In Austria, the right to work and live is unrestricted for citizens of EEA nations and Switzerland. An EEA citizen must submit a certificate of registration to the relevant local authorities if they want to stay in Austria for longer than three months.
All non-EEA nationals are required to abide by immigration rules and submit all necessary visa and permit applications. To reside in Austria, nationals of Bulgaria and Romania need special licences. All international employees must have employment and/or residency permits.
Employee Background Checks
Legal and Background Checks
In Austria, professional background checks are not very widespread (specialists and key individuals being the exceptions).
An employer's investigation and use of information during the application process constitutes data processing under the terms of GDPR Article 4 Z 2.
According to Article 5 of the GDPR, such data processing is only permitted if it is carried out legally, in good faith, and for specific, explicit, and legal objectives.
As a result, information on job seekers may only be utilised if it is required and appropriate for making decisions regarding the creation, performance, or termination of an employment relationship.
Internet research might be allowed if the information sought is generally and publicly available without the requirement for a password or something similar, or if the data subject has made the information public. Under data privacy law, it is crucial to use expert, outside background check services, and this is only legal with the applicant's legitimate consent.
Last updated on August 24, 2023.
If you have any queries or suggestions, reach out to us at irene.jones@neeyamo.com
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