Employer Payroll Contributions
Employee Payroll Contributions
Employee Income Tax
Austria does not have a statutory minimum wage. However, the Austrian law against wage and social dumping (Lohnund Sozialdumping-Bekämpfungsgesetz) regulates that similar wage conditions must apply to those working in Austria in the same branch. This is currently 1,500 EUR per month for a full-time employee.
The payroll cycle is monthly, and the employer must pay wages by the last working day of each month unless stipulated otherwise in a collective bargaining agreement or employment contract.
It is customary to pay 13th and 14th salaries in Austria. The annual salary is paid in 14 equal payments. The 13th and 14th payments are paid out in June and November.
Working hours are regulated by the Austrian Working Hours Act, the Working Hours Rest Act, and collective bargaining agreements. The standard workweek is 8 hours per day and 40 hours per week, with a maximum of 12 hours per day (including overtime). In addition, the average weekly working hours must not exceed 48 hours for 17 consecutive weeks.
Work in excess of 40 hours per week is paid at the rate of 150% of the regular pay. Overtime can also be given as time off in lieu at a ratio of 1 to 1.5 days. However, collective bargaining agreements often present higher figures for overtime payment or time off in lieu.
The statutory holiday entitlement in Austria is five weeks (25 days) per year for an employee who has completed six months of employment. This entitlement is increased to 6 weeks (30 days) after 25 years at the company.
There are 13 public holidays.
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.
A medical certificate must be provided.
Maternity leave in Austria is 16 weeks. Expectant mothers are prohibited from working 8 weeks before the child’s expected due date and for 8 weeks (12 weeks in the case of a Caesarean section or high-risk delivery) after the child’s birth.
Maternity leave is paid by a weekly allowance through the Social Security provider. This allowance is based on the average earnings of the last three months before the Maternity Leave began. After 16 weeks, the mother is entitled to unpaid Maternity Leave until the child is two years old (during this period, the mother receives childcare pay under the Child Care Payment Act).
Fathers are entitled to one month of unpaid paternity leave which may begin any time after the child’s birth up until the child turns two years old. This month of leave is often referred to as ‘Daddy Month’. The new father must notify his employer three months before the estimated date of birth to be granted this leave.
In Austria, parental leave starts when maternity leave finishes.
Parents can take parental leave until the child reaches the age of 24 months and are entitled to payment under the Child Care Payment Act from social security during their parental leave.
Fathers can share maternity leave with mothers. They can switch ‘leave periods’ between the two parents twice throughout the parental leave period, although these must be at least two months apart, mother and father are prohibited from taking parental leave at the same time
There are various additional leave periods to which employees are entitled:
- 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)
Upon termination of employment and depending on the reason for termination, the employee may be entitled to severance pay. Austria has two schemes linked to the employment contract start date.
The notice period varies based on the length of employment:
- Up to 2 years of employment: 6 weeks’ notice
- 2-5 years of employment: 2 months’ notice
- 5-15 years of employment: 3 months’ notice
- 15-25 years of employment: 4 months’ notice
- 25+ years of employment: 5 months’ notice
The notice period can be increased by up to six months, subject to a contractual agreement or collective bargaining agreement.
If the employment commenced before January 1, 2003, and has lasted for at least three years, the severance payment is calculated as a multiple of the remuneration payable to the employee before termination:
- Less than 5 years of employment: 2 times the regular salary payment
- 5-10 years of employment: 3 times the regular salary payment
- 10-15 years of employment: 4 times the regular salary payment
- 15-20 years of employment: 5 times the regular salary payment
- 20-25 years of employment: 9 times the regular salary payment
- 25+ years of employment: 12 times the regular salary payment
Employees forfeit their claim to receive the “old” severance pay from their employer if they resign without cause or if they are summarily dismissed for a reason.
For employment that began after December 31, 2002, the new severance pay scheme applies. The new scheme is due to the regulated requirement for employers to pay monthly contributions amounting to 1.53% of the pre-tax salary to an outside severance fund provider who manages and invests the funds received from employers. These employees are entitled to this severance pay scheme regardless of how the employment relationship ended. There are exceptions and waiting periods to be considered.
The standard probation period in Austria must not exceed 1 month, except for apprenticeships whose probation period is typically three months.
Non-EU/EEA/Swiss citizens must apply for a Schengen visa to enter Austria. In contrast, citizens from the European Union (EU), European Economic Area (EEA), or Switzerland can work in Austria without a visa for up to 90 days as Austria is part of the Schengen Area of Europe.
Longer-term visas, work permits, and residence permits are approved based on a point criteria system.
In summary, the type of work visa one needs depends on the length of stay and the applicant’s qualifications.
For example, as a Highly Qualified Worker from a third country:
- One may either enter Austria under a Job Seeker Visa to look for employment.
- If one receives an employment offer during the visa’s validity period, one may apply for a Red-White-Red card at the appropriate residence authority in Austria.
- If one has received an employment offer, one may apply for a Red-White-Red card with the appropriate Austrian representation in one’s home country or country of residence.
An applicant must reach a minimum of 70 points according to the list of criteria as a prerequisite in both cases.
Alternatively, as a third-country citizen, one may be granted an EU Blue Card (for which there is no link to the points system), if one:
- has completed a course of study at a university or other tertiary educational institution with a minimum duration of three years,
- has received a binding job offer for at least one year in Austria, and the employment corresponds to the applicant’s education,
- will earn a gross annual income of at least one and a half times the average yearly gross income of full-time employees (in 2021: at least 65,579.00 EUR annual salary plus special payments),
- is qualified for the position and the labor market test (Arbeitsmarktprüfung) shows no equally qualified worker registered as a job seeker with the Public Employment Service (AMS) available for the job.
Individuals who are not EEA citizens or Swiss nationals may apply for a Red-White-Red Card (combined residence and work permit) as Skilled Workers in a Shortage Occupation valid for 24 months if they can:
- Provide proof of completed training in a shortage occupation under the regulation
- Show evidence of a binding job offer in Austria and the prospective employer is willing to pay the minimum stipulated by law, regulation, or collective agreement.
- Reach a minimum of 55 points
Once the initial term with the Red-White-Red or EU Blue Card has been completed (or is due to be completed), one may apply for a Red-White-Red Card Plus. The Red-White-Red Card entitles you as a non-EEA citizen or Swiss national to a fixed-term settlement and unlimited labor market access (as a self-employed or an employed person, not limited to a specific employer).
The standard VAT rate in Austria is 20%, however, there are several industry and product special concessions in 2021 due to COVID-19 special measures.