Employment Laws in Austria

Contractual Agreements

Even though the employment laws in Austria do not mandate it, you can define and outline an employment relationship through a contractual agreement between you and your employee. 

Alternatively, you can provide a simple statement of terms, Dienstzettel, with key details like: 

• Your business info
• Employment start date
• Work location
• Job description
• Negotiated salary/wages
• Benefits (e.g., bonuses)
• Payday
• Vacation days
• Work hours
• Relevant agreement (collective or works)
• Notice period
• End date (fixed-term contracts)

Further, you can sign Data Processing Agreements alongside employment contracts to prevent any legal disputes in the future. 

Types of employment contracts in Austria

The employment laws in Austria favor the following types of employment agreements, namely: 

• Full-time contracts (Arbeitsvertrag) 
• Freelance contracts (freier Dienstvertrag) 
• Work contracts (Werkvertrag) 

Obligations and rights for both parties

Working Hours and Overtime

The Working Time Act, Arbeitszeitgesetz, lays out the following regulations regarding work hours and overtime for nearly all private-sector employees over the age of 18: 

Regular working hours

• Austria labor law prescribes an eight-hour workday or 40-hour workweek.
• The employment laws in Austria allow you to achieve the statutory working hours requirement based on the nature of your work.

• Further, labor law in Austria allows you to extend regular working hours to 12 hours.

Overtime regulations and compensation

Minimum Wage and Compensation

The minimum wage rate in 2024

There is no standard minimum wage in Austria. 

Instead of a single national minimum wage, the employment laws in Austria allow specific collective agreements in your sector to determine the minimum wage rate. In some cases, the labor laws of Austria may favor individual companies with a work council to set up minimum wage in addition to internal company rules.

Factors Affecting Wage Determination

Remuneration per employment laws in Austria can be through any financial means and benefits. Individual factors such as age, qualifications, working hours, job role, etc., may determine wages or salaries. 

Moreover, your obligations towards remote employees in Austria remain more or less the same. 

Employee Benefits and Social Security

The employment laws in Austria extend the following statutory employee benefits and social security contributions: 

Statutory benefits

• The employment laws in Austria require you to pay employees an annual salary in 14 equal installments instead of the typical 12 monthly payments. It may be a Christmas remuneration and a holiday bonus.
• Austria labor law ensures maternity allowance, Wochengeld, to cover the salary pay during maternity leave.
• The labor laws of Austria provide for a government-funded allowance, Kinderbetreuungsgeld, during childcare leave.
• The employment laws in Austria allow benefits from the unemployment scheme to be utilized as a training allowance, Weiterbildungsgeld, during study leave. 

Social Security contributions and requirements

The actual calculation of social security contributions takes into account the gross salary ("contribution base") and the above contribution rate for each relevant benefit program. All contributions must be transferred to the relevant health insurance provider no later than the 15th of the following month.

The actual calculation of social security contributions takes into account the gross salary ("contribution base") and the above contribution rate for each relevant benefit program. All contributions must be transferred to the relevant health insurance provider no later than the 15th of the following month.

Vacations and Paid Time Off

The employment laws in Austria regulate the following paid and unpaid leave agreed upon in the employment contract. 

Annual leave entitlement

• Austria labor law prescribes five weeks or up to 30 working days of paid annual leave in a year. It must be extended to six weeks for employees with 25 years of service. 
• You must extend the same to part-time employees.

Public holidays and special leaves

Termination and Severance

Here’s a brief overview of the termination of an employment contract and employer obligations that follow with it, as per the employment laws in Austria: 

Grounds for termination

Probationary period

• The labor law in Austria allows you to employ individuals on a probationary period not exceeding one month.  
• You can terminate the employment contract within the probationary period without giving a reason. 

Notice period 

Severance pay

• Austria labor law calls for a funded severance pay system called "Abfertigung neu."
• You must pay a monthly contribution of 1.53% of the employee's gross salary (including bonuses) into a severance fund. 
• The severance pay in Austria is not subject to income tax.
• The labor laws of Austria encourage you to include the same in freelance contracts.

Discrimination and Equal Opportunity

The following employment laws in Austria regulate the various aspects of discrimination and equal opportunity in the workplace: 

• Federal Equal Treatment Act (GIBG): Covers private sector employment.
• Federal Act on the Equal Treatment Commission and Ombudsperson: Provides support and investigation mechanisms.
• Other federal and provincial laws: Extend protection to specific groups and settings.

Prohibitions against workplace discrimination

The employment laws in Austria make you equally responsible for employee discrimination by third parties, such as colleagues or customers. 

Therefore, you must remain payroll and HR compliant to avoid getting penalized for workplace discrimination, for example: 

• You cannot mistreat employees throughout employment
• You must extend fair terms without discrimination
• You must offer equal access to support and opportunities
• You cannot discriminate based on gender or ethnicity when providing services

Health and Safety Regulations

The employment laws in Austria enforce comprehensive occupational health and safety (OHS) regulations, including: 

• Safe and sanitary workspaces, equipment, and facilities
• Reducing strain, noise, and exposure to dangerous substances
• Providing and using appropriate safety gear
• First aid, working hours, and conditions for specific needs

Stay Compliant with Skuad

You can easily navigate the complexities of employment laws in Austria with an Employer of Record (EOR) like Skuad.

Skuad simplifies everything for you - onboarding, payroll, taxes, compliance - across 160+ countries (including Austria) without setting up local entities. 

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FAQs

Q1. What are the payroll rules in Austria?

A1. The employment laws in Austria require you to deduct and withhold employee income taxes and mandatory social security contributions. While there is no national minimum wage, industry agreements often set them. You may offer 13th & 14th Salary (for Christmas and holiday bonus). Overtime requires extra pay or time off in lieu. Employees enjoy at least 25 paid vacation days, sick leave, and public holidays. 

Q2. What is the notice period in Austria?

A2. The notice period in Austria depends on the length of employment, the type of employment, and collective agreements. It is usually between six weeks to six months. 

Q3. What is the legal working age in Austria?

A3. You can employ anyone above 15 years old for apprenticeships. However, the legal working age in Austria is 18 years as a formal white-collar employee. 

Q4. Does Austria pay 14 months’ salary?

A4. The employment laws in Austria require you to pay employees an annual salary in 14 equal installments instead of the typical 12 monthly payments. These additional payments are not bonuses but proportions of their annual salary spread evenly throughout the year so employees can manage expenses smoothly during Christmas and holidays.