Employing in Austria

An employer of record, sometimes known as an international PEO can help you quickly hire and onboard workers in Austria – often with just two weeks’ notice. Establishing your own local entity without risk and saving costs, this type of service makes an EOR in Austria worth checking out!

We handle all the details to support your employees and hiring processes in Austria – from benefits and payroll to risk mitigation and compliance – while you retain complete control of your supported employees. We make operating in Austria hassle-free giving you the ability to focus on running and growing your business.

Statutory Benefits


In Austria, there is a legal requirement to pay two additional months’ salary.

  • Month 13 is paid out in June.
  • Month 14 is paid out in December.

Please be mindful of this when negotiating terms with new candidates. Clients can determine that the salary on offer includes these statutory payments which will be reflected in the contract of employment but this should be made known to your candidate in the pre-hiring stage.

We invoice for these additional salaries monthly and funds are accrued to be paid out at the appropriate time.

Accident insurance

Accident insurance covers accidents at work and occupational disease. AUVA (Allgemeine Unfallversicherungsanstalt — the Austrian Workers’ Compensation Board) is the social insurance for occupational risks. Financed mainly by contributions paid by employers, its legal duties are:

  • Prevention of occupational accidents and diseases.
  • Occupational medical care.
  • First aid for occupational accidents, post-traumatic treatment, rehabilitation, financial compensation and research.

The accident insurance scheme covers employees while at work or travelling to or from work. Cover includes measures to prevent accidents as well as benefits in the event of injury. All persons employed under an employment contract are subject to compulsory accident insurance.

Social security

Social insurance in Austria is composed of health, pension and accident insurance and typically covers:

  • Health (sickness and long-term care).
  • Incapacity (benefits in respect of accidents at work and invalidity).
  • Family benefits (maternity/paternity).
  • Unemployment.
  • Pension (old-age pension and benefits/survivor’s benefits).
  • Social need.

Employers are responsible for registering their employees with the relevant social insurance office and may be registered with different insurance institutions depending on their profession and the province they are working in. Social insurance contributions are deducted by the employer and paid over to the local tax office.

Other Provisions

Working hours

According to the Austrian Working Time Act (Arbeitszeitgesetz), the regular working hours are eight hours per day (40 hours per week).


It should be noted that, in principle, overtime is payable in Austria when the regular working hours are exceeded (per day or per week).

The right to overtime in Austria is stipulated by law as mandatory and cannot be altered or waived. It is possible to include an all-encompassing salary (included as gross pay element) to compensate for overtime. It is important to note, however, that such all-in clauses may not deteriorate the employee’s position as compared to a situation in which a basic salary plus additional payments for overtime are paid.

Based on the employee’s job role and proposed salary, our Austrian legal team can determine the extent of any additional gross overpay required to be stipulated in the employment contract.

Severance Pay Fund (Mitarbeiterervorsorgekasse)

New severance pay provisions were introduced from 1 January 2003 in accordance with the Company Employees Provision Act (BMSVG) for new employment relationships. The fund does not pay out if the employee terminates the contract.

An employee is entitled to freely dispose of any accrued severance pay if certain provisions are met:

  • At least three year’s funds have been invested into NEW severance pay.
  • The most recent employment contract has been terminated by the employer, by mutual consent, by dismissal through no fault of the employee, by legitimate premature resignation by the employee or by notice given by the employee during part-time employment according to Maternity Protection Act or Father’s Leave Act.

From the second month of employment onwards, an employer pays 1.53 % of the gross salary in contributions to the health insurance fund, which in turn passes the contributions onto a staff provision fund (Vorsorgekasse).

The staff provision fund invests the contributions and credits them including the returns on investment (after deduction of administration costs) to the individual’s personal severance pay account. Once a year, the fund should send a statement to the employee about the current status of the fund. A legally prescribed capital guarantee ensures that, regardless of the results of the investment, the final severance pay sum cannot be lower than the amount paid in by the employer.

TopSource Worldwide works with the staff provision fund BONUS VORSORGEKASSE.

Holiday Entitlement

Paid time off

Employees are entitled to a minimum of five weeks in each year of work (25 days).

When calculating leave according to working days (incl. Saturdays), the entitlement is 30 days leave each year.

After 25 years of service this entitlement increases to six weeks.

Public holidays

1 January
New Year’s Day (Neujahr)
6 January
Epiphany (Heilige Drei Könige)
17 April
Easter Monday (Ostermontag)
1 May
National Holiday (Staatsfeiertag)
26 May
Ascension Day (Christi Himmelfahrt)
5 June
White Monday (Pfingstmontag)
6 June
Corpus Christi (Fronleichnam)
16 June
Assumption Day (Mariä Himmelfahrt)
26 October
National Day (Nationalfeiertag)
1 November
All Saints’ Day (Allerheiligen)
8 December
Immaculate Conception Day (Mariä Empfängnis)
25 December
Christmas Day (Christtag)
26 December
St. Stephen’s Day/Boxing Day (Stefanitag)

Notice periods

Notice periods are governed by statute according to the length of service.

  • One to two years’ service — six weeks
  • Two to five years’ service — two months
  • Five to 15 years’ service — three months
  • 15 to 25 years’ service — four months
  • From 25 years’ service — five months

Sick leave

Employers in Austria 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 on the employee’s seniority and whether the employee is a white-collar or blue-collar worker. A medical certificate may be required.

Once an employer has fulfilled its sick-pay obligations, health insurance providers are responsible for paying an employee.

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Keen to engage an EOR in Austria?

At TopSource Worldwide, we work with local experts to help you navigate the various admin and cost obstacles you may come across along your expansion journey

To find out how we can help your business with our employment solutions, contact us today.