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Global Payroll Team
Written by Global Payroll Team
Last updated May 7, 2026
Expert Reviewed
Payroll in Austria
Tax in Austria
Immigration in Austria

Austria map

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Mercans offers complete payroll, PEO and HR services in Austria

Austria remains one of the wealthiest countries in the European Union and offers excellent infrastructure, efficient public administration, and a high quality of life. It is politically stable, has a high level of social partnership, and continues to serve as a regional coordination hub for international businesses operating across Central and Eastern Europe.

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Doing Business in Austria

Thanks to its dual education system and close cooperation between business and science, Austria provides a business-oriented environment for investors and employers. Government funding and financial support measures continue to be available for SMEs, startups, innovation, and research and development activities. Austria also benefits from a strong legal and regulatory framework and a skilled workforce.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Austria is generally straightforward. Choose how your company operates from a range of legal entity types which suit your individual circumstances and complete the required commercial, tax, and employment registrations.

Banking

Banking hours vary by institution and branch. Traditional branch opening hours often remain limited compared with retail business hours, so local confirmation is recommended.

Working Week

The standard working week in Austria is generally 40 hours, although many collective agreements provide for shorter normal weekly working time.

Labor Law

As a rule, Austrian laws regulating the employment relationship apply to foreign nationals who work in Austria. Important labor legislation includes the Labour Constitution Act, the Working Time Act, the Salaried Employees Act, the Vacation Act, and the Act Governing the Employment of Foreign Nationals. Collective agreements also play a major role in Austrian employment law.

Main Industries

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

GDP Growth

1.2%

Dates & Numbers

dd/mm/yyyy

Official State Name

Republic of Austria

Population

9.219 million

Capital

Vienna

Major Languages

German

Currency

Euro (EUR)

Internet Domain

.at

International Dialing Code

+43

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Austria
Vienna, AT
9:43 pm, May 16, 2026
10°C
broken clouds
87 %
Wind Gust: 35 mph
Clouds: 75%
Sunrise: 5:14 am
Sunset: 8:27 pm

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Payroll

There is no universal statutory national minimum wage in Austria. Minimum pay is generally determined by the applicable collective agreement or, where relevant, by minimum wage tariffs. For companies that operate multi-country payroll, it is important to note that temporary workers are generally entitled to the same core labor law protections as comparable permanent employees, while pay and other terms are strongly influenced by collective bargaining rules.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must generally be kept for seven years for tax purposes

Reports

25 working days in a five-day week, or 30 working days in a six-day week

Annual Leave

Six weeks of continued pay at full salary, increasing with length of service

Sick Leave

16 weeks of paid maternity protection and one month of paid family time for fathers subject to conditions

Maternity & Paternity Leave

Six weeks’ notice

Employee Termination

It is customary to pay the 13th and 14th month salaries in Austria, usually as holiday and Christmas pay

13th month salary

No statutory national minimum wage, pay is generally set by collective agreement

Minimum Wage

50 percent premium for overtime work is common, subject to collective agreement and working time rules

Overtime

Under the new severance system, the employer contributes 1.53% of monthly salary and special payments

Severance Pay

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Tax and Social Security

Any individual resident in Austria is subject to Austrian income tax on domestic and foreign income, subject to applicable exemptions and treaty relief. Austria’s social security system covers sickness, incapacity for work, maternity, unemployment, old age, and death. Insurance is generally compulsory for employees and many self-employed persons.

Tax

Income tax rates are progressive. Austria’s corporation tax rate is 23%. For 2026, the top personal income tax rate remains 55% for income above EUR 1 million, while the standard VAT rate remains 20%.

23%

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. For standard blue-collar and white-collar employees, combined social insurance contributions are commonly around 39.05%, with approximately 20.98% payable by the employer and 18.07% by the employee, subject to category-specific rules and thresholds.

39.05%

Social Security Rate

20.98%

Social Security Rate for Employers

18.07%

Social Security Rate for Employees

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Employment Law

Global companies that manage multi-country payroll should note the specific prerequisites for Austria, including the Employment of Foreign Nationals Act for third-country nationals and the strong role played by collective agreements in setting wages and employment conditions.

Employment Agreement

The conventional contract of employment with statutory leave, dismissal protection, and social insurance is the most common form in a permanent employment relationship. Part-time employees are generally subject to the same labor law protections as full-time employees.

Working condition

The Working Time Act applies to most private sector employees over the age of 18. The standard normal working week is generally 40 hours, although many collective agreements shorten the regular weekly working time.

Leaves

Typically, employees must agree with their employer when to take annual leave. Part-time workers and minimally employed workers generally have the same leave entitlement principles as full-time employees, calculated according to their working pattern.

Employment termination

Employment contracts may be terminated during the probationary period by either the employer or employee without giving reasons. Termination can also occur at the end of a fixed-term contract, unilaterally with notice, or by mutual agreement. Immediate dismissal ends the employment relationship without notice and requires legally valid grounds.

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6 weeks

Minimum notice period for terminating an employee

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13 days

Total number of public holidays

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40

Working hours per week

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2 days

Total number of days for Compassionate and Bereavement Leave

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Immigration

Austria offers several immigration categories for third-country nationals, including the Red-White-Red Card and the EU Blue Card. The Red-White-Red Card is a combined residence and employment permit for qualified workers and is generally issued for 24 months, entitling the holder to settlement and employment with the employer specified in the application.

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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, subject to the applicable immigration rules and salary thresholds.

Work Permit validity

Two years

Required Documents

Third-country nationals may require a visa for entry, depending on nationality and intended length of stay

If an individual has received an employment offer, they may apply for a Red-White-Red Card with the appropriate Austrian representation or competent authority

Applicants must meet the category-specific eligibility criteria, which may include a points-based assessment for certain Red-White-Red Card routes

For the EU Blue Card route, the applicant must generally have completed higher education or equivalent qualification requirements and hold a binding job offer meeting the applicable conditions

Applicants must also generally provide proof of health insurance coverage, adequate means of subsistence, and compliant accommodation where required under the residence rules

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!

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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    FAQs

    What is an Employer of Record (EOR) in Austria and how does it work?

    An Employer of Record (EOR) in Austria legally employs staff on behalf of foreign companies. It manages employment contracts, payroll, taxes, social security, and compliance with local labor laws, allowing companies to hire employees quickly without establishing a local legal entity.

    Why should international companies use an EOR instead of establishing a legal entity in Austria?

    Using an EOR avoids the time and costs of setting up a local company. It provides fast market entry, reduces administrative work, ensures legal and tax compliance, and is ideal for businesses testing the Austrian market or hiring a small team.

    How does payroll outsourcing in Austria ensure compliance with local tax and labor regulations?

    Payroll outsourcing ensures accurate salary processing, tax filings, and social security contributions according to Austrian law. It reduces compliance risks, avoids penalties, and provides expertise on local labor and tax regulations.

    Can an Employer of Record in Austria hire employees and manage work permits for foreign businesses?

    Yes, an EOR can legally hire employees for foreign companies and handle work permits. It manages HR operations, payroll, and compliance with local labor and immigration laws, enabling smooth operations without a local entity.

    What are the main benefits of using EOR and payroll services in Austria for global business expansion?

    EOR and payroll services enable faster hiring, local compliance, reduced legal and financial risk, and access to market expertise. They allow companies to expand into Austria efficiently while focusing on business growth.

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