Employer of Record in Austria

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Austria if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Austria below, to avoid any compliance issues.

Employment Contract Requirements

Hiring in Austria involves adherence to the country's labor regulations, emphasizing transparency and detailed employment documentation.

• The date of employment commencement
• The employee's ordinary working days and hours
• The employee's wage rate and the method of wage calculation
• The company's disciplinary codes

Onboarding Process

We can help you get a new employee started in Austria quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Probation Period in Austria

The standard probation period in Austria must not exceed one month

In Austria, an employee whose age is 18 or older is allowed to work 8 hours per day and 40 hours per week. The standard 40-hour workweek can be extended to a maximum of 12 hours daily and 60 hours weekly, but with important safeguards including overtime premiums and employee consent requirements. Since September 2018, the exemption from maximum working hours and mandatory rest periods has been extended to include not only executive employees but also employees "having significant independent decision-making authority" as well as "close relatives of the employer". Employees working more than 6 hours in a day must receive a minimum 30-minute break.

Employees are entitled to a mandatory 50% bonus for overtime hours worked. This means for each overtime hour, you receive your regular hourly rate plus an additional 50% premium. Alternatively, employees may receive time off in lieu at a ratio of 1.5 days for each overtime day worked. It's important to note that collective bargaining agreements may stipulate higher rates for overtime pay or time off in lieu.

As of 2025, Austria does not have a statutory national minimum wage. Instead, minimum wages are determined by collective agreements negotiated sector-by-sector between employers' associations and trade unions. These collectively agreed wages vary widely depending on industry, region, and worker experience.

Typical minimum gross monthly wages range from approximately EUR 1,700 to EUR 2,000 for full-time workers in many sectors. These rates are regularly updated through collective bargaining processes, reflecting economic conditions and inflation. Employers must comply with the applicable sectoral collective agreement relevant to their industry. Austria's approach allows flexibility but requires employers to closely monitor the relevant agreements for compliance.

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Employment laws in Austria can be intricate, and even unintentional mistakes in contracts, benefits, or termination processes can carry legal and reputational consequences. With an Employer of Record, you gain a local partner that ensures every hire is compliant. The EOR takes care of drafting compliant contracts, processing accurate payroll, managing contributions to statutory benefits, and handling lawful terminations if needed, all according to local employment standards.

This level of protection is especially valuable when expanding into new or unfamiliar regions. Instead of using time and resources to build in-house legal knowledge, you gain immediate access to local expertise. The EOR keeps you ahead of regulatory updates and shields your company from potential compliance gaps, so you can confidently hire and manage employees while minimizing risk. For hiring managers and founders, it's the difference between hiring with uncertainty and building your team on a legally sound foundation.

In Austria, employers must carefully manage several payroll taxes, including income tax withholding, social security contributions, and municipal payroll taxes. The income tax rates are progressive, ranging from 0% to 55%, while both employers and employees contribute to social security. Municipalities also levy a 3% payroll tax on salaries.

It is essential for employers to accurately calculate these taxes and adhere to strict deadlines for submission. Utilizing payroll management software can streamline these processes, helping employers consolidate payroll data, ensure compliance, and avoid penalties under Austrian tax laws.

When you’re scaling quickly, setting up local payroll systems in each new country slows you down. In Austria, the administrative load can include government registration, benefits management, and accurate, on-time payment delivery. An EOR gives you a plug-and-play solution that handles all of this while your internal team stays focused on growth, not red tape.

Key Ways an EOR Supports Payroll in Austria:

• Rapid Payroll Setup: Onboards employees quickly with ready-to-go infrastructure.
• End Administration: Handles salary, tax, and benefits with no extra internal resources.
• Vendor Simplicity: Consolidates payroll across countries for centralized oversight.
• No Entity Required: Operates legally, saving your business the time and resources needed for local incorporation.

In Austria, work permits and visas are essential for employers hiring foreign workers. The process involves submitting applications, paying fees, and meeting specific eligibility criteria. The key visa types include the Red-White-Red Card, EU Blue Card, Job Seeker Visa, and Intra-Company Transfer Permit. Employers must ensure compliance with local labor regulations when sponsoring foreign employees.

Mandatory Leave Entitlement in Austria

The annual leave entitlement in Austria is 25 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Austria

Austria has 13 mandatory national public holidays in a year.

Paid Time Off in Austria

Employees in Austria are entitled to a statutory holiday allowance of five weeks (equivalent to 25 working days) per year once they have completed six months of employment.

• Employees with less than six months of service in Austria accrue two working days of holiday entitlement per month. After completing 25 years or more with the same employer, the entitlement increases to six weeks, equivalent to 30 working days.
• An employee in Austria can credit up to 12 years of prior employment in other jobs and periods of education. This reduces the required number of years of service with the same employer to 13 years.

Maternity Leave In Austria

Maternity leave in Austria is 16 weeks. Expectant mothers are prohibited from working eight weeks before the childs expected due date and for eight weeks (12 weeks in the case of a Caesarean section or high-risk delivery) after the childs birth.

Paternity Leave In Austria

Fathers in Austria have a legal right to paternity leave.

• Fathers in Austria are eligible for up to four weeks of paternity leave, commonly known as 'Daddy Month,' which can be taken after the birth of a child. Fathers receive a Family Time Bonus of EUR 22.60 per day (approximately EUR 700 total) during this period. They no longer need employer consent to take this leave but must fulfill notification requirements. During paternity leave, fathers are protected from dismissal.

Sick Leave In Austria

Sick leave entitlement varies based on the length of employment:

• One year of employment: Six weeks at full pay and four weeks at half pay covered by the employer
• Two-15 years of employment: Eight weeks at full pay and four weeks at half pay covered by the employer
• 16-25 years of employment: 10 weeks and four weeks at half pay covered by the employer
• 26+ years of employment: 12 weeks and four weeks at half pay covered by the employer

Parental Leave In Austria

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.

Childcare Leave

Two weeks of paid leave to care for a sick child under the age of 12

Leave To Care For Family Member

An employee can also request up to six months of unpaid leave to care for an immediate family member

For startups and small teams, managing global employee benefits isn’t just complex, it’s a full-time job. In Austria, understanding what benefits are required, how to deliver them, and how to stay compliant can be overwhelming, especially without local HR expertise. An Employer of Record removes that pressure by taking complete ownership of benefits administration, so you don't have to become an expert in local employment law.

Whether it’s healthcare contributions, pension enrollment, or statutory leave, the EOR ensures everything is delivered accurately and on time. They navigate any country-specific nuances, keep up with legal changes, and ensure each benefit is properly tracked and documented. For founders, that means fewer distractions and more time to focus on growth. Your employees get the security and support they expect from a local employer, and you get to scale your team in Austria without building complex infrastructure or worrying about compliance missteps.

Termination Process in Austria

Indefinite contracts in Austria can be terminated without cause, provided that the stipulated notice periods are observed. However, fixed-term contracts are subject to additional restrictions and conditions.

• Voluntarily by the employee
• By mutual agreement
• Incapacity to carry out job responsibilities
• Operates an independent commercial business or carries out commercial transactions within the employers business on their own account or that of a third party
• Dismissal (with a valid reason like persistent negligence at work)
• Resignation (for a valid reason like workplace discrimination or misconduct)

Notice Period in Austria

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

Severance in Austria

The severance pay system in Austria mandates employers to contribute 1.53% of the monthly salary to an employee severance fund. Upon the conclusion of the employment term, the employee has the option to either withdraw the accumulated amount or retain it in the fund for potential investment.