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Mercans CountryIntel ® Austria Payroll And HR Insights

Mercans offers complete payroll, PEO and HR services in Austria

The fourth richest country in the European Union, Austria offers excellent infrastructure, a modern and efficient administration and a high quality of life. It is politically stable with a low strike level and a high level of social peace. Location-wise, it connects both East and West which is why it is the coordination headquarters for approximately 1,000 foreign companies.

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Doing Business in Austria

Thanks to its dual education system and optimal cooperation between business and science, Austria provides a very business-oriented education system. Boosted by high labor productivity and low labor costs, Austria is uniquely positioned to attract business and investment opportunities. Government funding and financial support measures are in place for SMEs, company startups as well as new technologies. Priorities are in place to support business growth including improvements in regional infrastructure, strengthening the competitiveness of the SMEs as well as support for research and development activities.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Austria is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banking Hours: Monday, Tuesday, Wednesday and Friday from 08:00 a.m. to 12:30 p.m. and 01:30 p.m. to 03:00 p.m.; Thursday from 08:00 a.m. to 12:30 p.m. and 01:30 p.m. to 05:30 p.m.

Working Week

The standard working week is from Monday to Friday from 08:00 a.m. to 12:30 p.m. and 01:30 p.m. to 05:30 p.m.

Labor Law

As a rule, the Austrian laws that regulate the employment relationship apply to foreign nationals who work in Austria. Important labor legislation includes the Labor Constitution Act. Apart from a few exceptions, Austrian labor law applies only to workers (who typically perform manual work or skilled labor) and employees.

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Main Industries

Food and luxury commodities, mechanical engineering and steel construction, chemicals and vehicle manufacturing

GDP Growth

3.80%

Dates & Numbers

dd/mm/yyyy

Official State Name

The Republic of Austria

Population

8.917 million

Capital

Vienna

Major Languages

German

Currency

Euro €

Internet Domain

.at

International Dialing Code

+43

Austria
Vienna, AT
10:24 am, December 2, 2022
1°C
light snow

Payroll

There is no national or regional minimum wage in Austria. The minimum wage for employees is set out in the respective collective agreements, which depends on the industry in which the employee is employed. For companies who operate multi-country payroll, it is important to note that temporary workers are entitled to the same rights and benefits as permanent employees.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for five years

Reports

30 working days

Annual Leave

Six weeks

Sick Leave

16 weeks of paid maternity leave and one month of paid paternity leave

Maternity & Paternity Leave

Six weeks’ notice

Employee Termination

It is customary to pay the 13th and 14th month salaries in Austria. These are paid in June and November.

13th month salary

1,500 EUR per month for a full-time employee

Minimum Wage

50 percent premium for overtime work

Overtime

Twice the regular salary for employment of 5 years or less

Severance Pay

Tax and Social Security

Any individual resident in Austria is subject to Austrian income tax, which encompasses both domestic and foreign income. Austrian citizens working abroad are subject to Austrian income tax for their Austrian income and subject to applicable double tax treaties which may reduce their tax liability. The social security system covers sickness, incapacity for work, maternity, unemployment, old age and death.

Tax

Income tax rates are staggered progressively and charged against income.

25%

Corporate Income Tax

55%

Personal Income Tax

20%

Sales Tax

20%

VAT

Social Security

Insurance is compulsory for those who are self-employed or in paid employment. Insured individuals are legally entitled to some benefits for which they need to fulfill certain criteria for entitlement.

39.50%

Social Security Rate

21.38%

Social Security Rate for Employers

18.12%

Social Security Rate for Employees

Employment Law

Global companies that manage multi-country payroll should note the specific prerequisites for individual countries and consider the Employment of Foreign Nationals Act (which does not apply to employees from the European Union or EEA).

Employment Agreement

The conventional contract of employment which comes with all its rights (including leave, protection against dismissal and social insurance) is the most common form in a permanent employment relationship. Part-time employees are subject to the same labor legislation rules as full time employees.

Working condition

The Working Time Act applies to almost all private sector employees over the age of 18. Collective agreements in many industries have shortened the regular work week for many.

Leaves

Typically employees must agree with their employer as to when to take their leave. Minimally employed workers and part-time workers have the same entitlement as full-time employees.

Employment termination

Employment contracts may be terminated during the probationary period by either the employer or employee without giving reasons. Termination can also be done at the end of a fixed-term contract, unilaterally (with criteria for periods of notice) or by mutual agreement. Dismissal, on the other hand, terminates the employment with immediate effect but requires the provision of a reason.

6 weeks

Minimum notice period for terminating an employee

13 days

Total number of public holidays

40

Working hours per week

4 weeks

Total number of days for Compassionate and Bereavement Leave

Immigration

There are a few types of immigration categories which include the Red-White-Red Card. A combination of a residence permit and employment permit, it is valid for two years and entitles the individual to settlement and employment with a specific employer. The Red-White-Red Card plus entitles the holder to settlement and unrestricted employment

Residency permits

Other than the Red-White-Red Card and the Red-White-Red Card plus, the EU Blue Card is issued as a combination of residence permit and employment permit. The holder is entitled to temporary settlement and to employment with a specific employer.

Work Permit validity

Two years

Required Documents

Non-European Union (EU) / European Economic Area (EEA) /Swiss citizens must apply for a Schengen visa to enter Austria. In contrast, citizens from the EU/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

If an individual has received an employment offer, they 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 achieve a minimum of 70 points according to the list of criteria as a prerequisite in both cases.

Alternatively, as a third-country citizen, an individual may be granted an EU Blue Card (for which there is no link to the points system) if they:
have completed a course of study at a university or other tertiary institution with a minimum duration of three years

  • have 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.
Compliant, reliable, error-free and touchless payroll in Austria

Build the best team and hire top talent compliantly in Austria. Get in touch with Austria payroll outsourcing & PEO specialists for a free consultation!

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This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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