Table of Contents

Austria

Table of Contents

Currency

Euro (EUR)

Payroll Frequency

Monthly

Employer Taxes

22%

About Austria

Since the end of the World War II, Austria has achieved high economic growth facilitated by the growth of metallurgical, textiles, and machinery industries. Organic farming has also been on the rise in Austria with an overall share of 22% of its total economy. This makes Austria one of the leading countries for organic farming in Europe. Joining the EU in 1995 ensured that the country also benefited from the huge European market. There was a boom in tourism caused by favorable government policies. According to the World Bank, Austria’s GDP per capita was $386.4 billion making it one of the 14 richest countries in the world. On the other hand, the country has experienced challenges trying to assimilate migrants and strains on labor markets which are caused by the aging population.

The success of the country has been achieved by political stability which has created a positive investment climate. The judiciary is also considered independent, meaning it has the authority to protect individual properties and rights. Corruption in Austria is also relatively rare.

Employment Relationship

• Permanent Employment

In Austria, the regulations for permanent employment are defined as a full-time permanent employment contract by which two parties (a prospective employee and an employer) engage in an agreement with no specific duration or termination time. Permanent employment contracts can be terminated at any time by giving notice by either party.

• Fixed-Term or Specific-Purpose Contracts

There are no restrictions regarding maximum terms for fixed-term contracts or the renewals thereof. Nevertheless, successive fixed-term contracts automatically transform into indefinite duration contracts unless evidence can be provided to justify the renewal of a fixed-term contract.

• Temporary Employment Contratcs

In Austria, temporary work, also known as minimal employment, is defined as any work that provides monthly remuneration that does not exceed EUR 500.91 (euros). The Temporary Employment Act allows hiring temporary workers from third parties (temporary agencies) to perform work. For the duration of employment in the employee's company, the agency is considered an employer within the meaning of the employee protection regulations. The agency must inform the employee of all circumstances relevant to compliance with personal occupational safety, in particular working time protection and special personal protection. Employers are also considered to be the employer of the temporary workers within the meaning of the equal treatment regulations and prohibitions of discrimination that apply to comparable employees of the employer.

Probationary Period

During the probationary period in Austria, an employment contract may be terminated by either party at any time. The probationary period may not exceed 1 month with the exception of apprenticeships, which can have a probationary period that lasts up to 3 months.

Working Hours

In Austria, regular working hours, as stipulated in the Working Time Act, are 8 hours a day and 40 hours per week. There are a few exceptions where the normal working hours are reduced.

Holidays / PTO

• Statutory Holidays

New Year’s Day – January 1 Epiphany – January 6 Easter Monday – date subject to change every year  Labor Day – May 1 Ascension Day – date subject to change every year  Whit Monday – date subject to change every year Corpus Christi – May 31  Maria Ascension/Assumption Day – August 15  National Day – October 26  All Saints’ Day – November 1 Immaculate Conception – December 8  Christmas Day – December 25  Boxing Day – December 26

• Paid Annual Leave

All employees who have performed at least 6 months of service are entitled to annual paid leave of 5 weeks (25 days for those working 5 days a week and 30 days for those working 6 days a week). Those who have more than 25 years of service with an employer have an entitlement to 6 weeks for annual leave. Employees are entitled to their usual wages during annual leave. The holiday entitlement arises pro rata in the first 6 months of the first year of work. After 6 months of service, the holiday entitlement accrues in full in the first year of work. From the second year of work, the employee is entitled to the entire vacation at the beginning of the working year. Annual leave can be split into 2 parts to allow more flexibility but each part must have a duration of at least 6 working days. Employees cannot take compensation in place of their annual leave except when dealing with employment termination prior to exercising their annual leave. The entitlement to annual leave expires after 2 years of accrual.

• Sick Leave

In the event of illness, employees are obliged to inform their employer immediately of their inability to work. If the employee is unable to work after starting work due to illness or accident, without being responsible for this intentionally or through gross negligence, they are entitled to continued payment of wages for 6 weeks. Depending on the length of the employment relationship, the entitlement increases to up to 12 weeks. No sick pay is due for the first 3 days of incapacity to work. During this period, however, employees are generally entitled to continued payment of wages. From the fourth day of incapacity for work, sick pay is granted as a statutory minimum benefit of 50% of the assessment basis for the calendar day. From the 43rd day of an illness associated with incapacity for work, the sickness benefit increases to 60% of the assessment basis for the calendar day.  

• Maternity Leave

Generally, maternity leave lasts 16 weeks: 8 weeks can be prior to birth and 8 weeks after. Although the postnatal period is set at 8 weeks, it may be extended to 12 weeks in the case of premature, multiple, or cesarean births. Other than the 8-week prenatal leave, a pregnant emplpyee may receive leave from work if she provides a certificate from a Labor Inspectorate doctor or another medical officer that her (or her child’s) life and health are endangered if she continues to work. As soon as they become aware of their pregnancy, expectant mothers must notify the employer of this, stating the expected date of birth. In addition, they are obliged to draw the employer's attention to the beginning of the 8-week period within the fourth week before the beginning of the period. 

• Paternity Leave

Since March 2017, paternity leave and benefits for new fathers are applied to natural and adoptive fathers. Paternity leave is one month (28-31 days) and must be taken within 91 days of the birth of the child. To be eligible, fathers must be employed, have valid health and pension insurance for at least 182 days prior to applying for the bonus. The benefit is paid at EUR 47.82 per day, for a total of around EUR 1,450 from August 1, 2023.

Termination of Employment

• Notice Period

The length of termination notice periods that an employer must abide by prior to terminating an employee is generally proportionate to the length of employment and can range from 1 day (casual workers) to 5 months. The notice period also takes into account the status of the worker (blue-collar worker or white-collar employee). Employees can terminate their contracts by giving a month's notice. Employees with lifetime contracts or contracts with a fixed period greater than 5 years may terminate their contract by giving 6 months' notice after more than 5 years of service. 

• Severance Benefits

New severance pay was introduced for employees whose employment began after January 1, 2003. Employers must pay a severance allowance to workers when an employment contract is terminated. During the employment contract, the employer must pay 1.53% of each employee’s gross salary to a severance payment fund called BV-Kasse. Upon termination, the worker is able to decide to have these funds paid out as a severance (the employee must have worked for three years with this employer to have this option) or leave the pay in the fund. If the worker decides to leave it in the fund, then the employer will continue to contribute to the fund on a monthly basis and, at termination, the employer will have no liability for a severance payment. The employee has six months from the end of the employment relationship to notify the BV-Kasse as to how the severance will be disbursed.  For employees whose employment began before January 1, 2003, the amount of the severance pay depends on the length of the employment relationship and the remuneration due for the last month of employment. Employees are entitled to two monthly wages after three years of service, three monthly wages after five years of service, four monthly wages after ten years of service, six monthly wages after 15 years of service, nine monthly wages after 20 years of service and one annual salary after 25 years of service.  If the worker chooses to terminate the contract, is dismissed for reasonable cause, or resigns without just cause, then the capital remains in the fund and continues to be invested. The amount can then be drawn upon once the employee reaches the age of retirement.