End-to-end Employer of Record Services for Austria

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 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 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.

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.