G-P’s Employer of Record (EOR) model allows your company to start hiring talent in minutes via our global entity infrastructure. Unlike a Professional Employer Organization (PEO), G-P allows your company to expand your global footprint without the hassle of entity setup and management.
Our global employment products, including G-P Meridian Prime™ and G-P Meridian Core™, are backed by the largest team of HR and legal experts in the industry. We handle the growing complexities of compliant global expansion — so you can focus on opportunities ahead.
As a global EOR expert, we manage payroll, employment contract best practices, statutory and market norm benefits, employee expenses, as well as severance and termination. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. G-P allows you to harness the talent of the brightest people in 180+ countries around the world, quickly and easily.
Hiring in Austria
Employees hired by companies with 5 or more employees have the right to set up a work council through election. The council size is dependent on the number of employees in the company. Employers must provide at least 1 weeks’ notice to the work council before giving an employee notice of dismissal. If the work council requests, the employer must consult the council before the dismissal can take place.
Employees in Austria have free access to government and labor support if they believe they have been treated unfairly, so filing complaints with the labor tribunal are common. We highly recommend taking professional advice when hiring employees in Austria, whether through our services or via one of your own companies.
When negotiating terms of an employment contract with an employee in Austria, it may be useful to keep the following in mind.
Employment contracts in Austria
It’s best practice to put a strong employment contract in place in Austria which spells out the terms of the employee’s compensation, benefits, and termination requirements. An employment contract in Austria should always state the salary and any compensation amounts in Euro rather than another currency.
Working hours in Austria
Austrians generally work an 8-hour day and a 40-hour week although many industries have Collective Bargaining Agreements (CBAs) which may set different standards.
Overtime is compensated by additional time off or paid at an additional 50% rate. This rate increases to 100% for night and weekend shifts, and many CBAs grant higher supplements in general.
Holidays in Austria
The following public holidays or bank holidays are days when employees in Austria are not obligated to work:
- New Year’s Day
- Epiphany
- Easter Monday
- Labor Day
- Ascension Day
- Whit Monday
- Corpus Christi
- Assumption Day
- Austrian National Day
- All Saints Day
- Immaculate Conception Day
- Christmas Day
- Boxing Day / St. Stephen’s Day
Vacation days in Austria
Statutory minimum and market norm is 5 weeks (25 days) of vacation per year in Austria, for all employees that have worked 6 continuous months.
Starting with the 26th year of employment, the vacation entitlement increases to 6 weeks (30 days) of paid vacation per year.
Austria sick leave
Workers in Austria are generally entitled to pay when unable to work due to sickness, industrial accident, or occupational illness. The length of time for which an employee will receive pay depends on seniority and type of employment. A medical certificate may be required.
Maternity and paternity leave in Austria
Generally, pregnant employees are prohibited from working during a protection period of 16 weeks of leave, split evenly before and after the birth. During this time, the expecting employee is entitled to wages equal to the average of their salary over the 13 weeks prior to the leave.
Fathers are entitled to paternity leave of 10 working days for the birth of a child. Mothers and fathers are entitled to parental leave (release from work in return for the suspension of wages/salary) until the child’s 8 birthday. The maximum period of parental leave is 24 months, and the minimum period of parental leave is 2 months. The dismissal and termination protection ends 4 weeks after the conclusion of the parental leave.
Additionally, parents are entitled to flexible working time arrangements up to the child’s 8 birthday.
Health insurance in Austria
Adequate insurance coverage is generally provided through the national system which is paid via social insurances by both employers and employees. Supplementary coverage may be provided to employees as an additional benefit.
If individuals are required to travel for work outside Europe, we strongly recommend ensuring that the employee is covered under a travel insurance plan.
Austria supplementary benefits
In general, social security adds approximately 32% on top of the total cost of employment for an employer hiring an employee in Austria. This allocation accounts for statutory benefits for salaried employees and does not account for CBAs or other benefits in Austria.
Some companies provide senior-level executives with company cars.
Bonuses
A 13th-month or 14th-month bonus in Austria, equal to 1 month’s salary, is a market-norm benefit typically paid at Christmas and upon the employee’s vacation time (in the summer).
Most CBAs include the 13th and 14th bonus. When negotiating terms of employment with a candidate in Austria, we strongly recommend clarifying the monthly payment amount as well as whether the annualized salary will be paid over 12, 13, or 14-month salary payments.
Termination and severance in Austria
A probation period of up to 1 month may generally be agreed to in the employment contract in Austria, during which either party can terminate the employment contract without explanation.
For termination outside the probationary period:
- Employees: Workers may terminate the employment relationship on the last day of a calendar month by providing a notice period of 1 month. The agreement may extend this notice period up to 6 months; however, the notice period to be observed by the employer may not be shorter than the notice period agreed with the employee.
- Employers: The termination of employment in Austria by an employer requires advance notification. For salaried employees, the legal term of notice amounts are based on the years of service provided by the employee to the employer:
| Years of Service | Period of Notice to Terminate Employment |
| Less than 2 years | 6 weeks |
| 3-5 years | 2 months |
| 6-15 years | 3 months |
| 16-25 years | 4 months |
| 26+ years | 5 months |
In addition to the notice period required to terminate an employment contract in Austria, employers are required to disburse severance pay. Provided that the employment relationship lasts longer than 1 month, the employer is required to pay 1.53% of the employee’s monthly salary into an employee provision fund. When terminated, the employee can choose to either have the amount paid out as severance pay (given a minimum of 3 years of service and the employee did not give notice or was dismissed by cause) or leave the amount in the employee provision fund, in which a subsequent employer continuous to contribute.
Paying taxes in Austria
Insurance is compulsory for individuals who are either self-employed or in paid employment, and contributions have to be made by both employees and employers at the following rates:
- Pension insurance:
22.80% (employer contribution: 12.55%; employee contribution: 10.25%) - Accident insurance:
1.20%, to be paid by the employer - Health insurance:
7.65% (employer contribution: 3.78%; employee contribution: 3.87%) - Unemployment insurance:
6.00%, to be split equally between the employer and the employee - Others:
1.85% (employer contribution: 0.85%; employee contribution: 1%) - Severance fund:
(solely employer contribution: 1.53%)
Where applicable, employees pay trade union contributions and contributions to religious communities (e.g. church tax), which are deducted directly from pay.
Why G-P?
At G-P, we help companies unlock the power of the everywhere workforce through our industry-leading global employment platform. Let us handle the complex and costly tasks involved in finding, hiring, onboarding, and paying your team members, anywhere in the world, with the speed and guaranteed global compliance your business needs.
Contact us today to learn more.