Employer of Record in Austria

An Employer of Record, or EOR, is a company that legally hires employees on your behalf in another country. Think of it as a partner that handles all the local employment responsibilities. If you want to hire someone in Austria but don't have a legal entity there, an EOR is your solution. It manages everything from contracts and payroll to taxes and benefits, making sure you follow all of Austria's rules. This lets you build your team in Austria without the headache of setting up a local company. For a complete solution, check out what an Employer of Record like Rivermate can do for you.

How an Employer of Record (EOR) Works in Austria

Using an EOR is straightforward. You find the talent, and the EOR handles the rest. Here is how it typically works.

1. You Choose Your Candidate. You recruit and select the person you want to hire in Austria. You agree on their role, salary, and start date.
2. The EOR Creates a Compliant Contract. The EOR drafts an employment contract that follows Austrian labor law. This includes specific requirements set by authorities like the Federal Ministry of Labour and Economy (https://www.bmaw.gv.at/). The contract will cover all local standards, from vacation time to termination rules.
3. The EOR Onboards Your Employee. The EOR legally hires the employee. It adds them to its payroll and manages all the necessary paperwork to get them started.
4. You Manage Daily Work. Your new team member works for you, just like any other employee. You handle their day-to-day tasks, projects, and performance. The EOR remains the legal employer in the background.
5. The EOR Handles HR and Payroll. Each month, the EOR processes payroll, deducts taxes, and makes social security contributions. It also manages benefits and ensures you stay compliant with Austrian regulations.

Why use an Employer of Record in Austria

Expanding into a new country can be complex. An EOR simplifies the process, letting you focus on growing your business instead of getting stuck on administrative tasks. It's a practical way to hire internationally without the big commitment of setting up a foreign branch.

Here are some of the main benefits:

• Enter the Market Faster. Setting up a legal entity in Austria can take months and involves significant cost and paperwork through portals like the Austrian Business Service Portal (https://www.usp.gv.at/). An EOR allows you to hire employees in days or weeks, not months.
• Ensure Full Compliance. Austrian employment law is complicated, with specific rules on working hours, paid leave, and mandatory 13th and 14th-month salaries. An EOR is an expert in these local laws and ensures your business complies with all of them, reducing your legal risks.
• Reduce Administrative Burden. The EOR takes care of all HR tasks. This includes payroll processing, tax withholding, managing social security payments, and administering employee benefits. You don't have to become an expert in Austrian administration.
• Save Money. You avoid the high costs associated with establishing a company abroad. These can include legal fees, registration costs, and accounting expenses. An EOR offers a more cost-effective way to build a global team.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Austria includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Austria.

Hiring in Austria means tapping into a stable and highly skilled workforce. The country has a strong economy and a well-educated population, making it an attractive place to build a team. The relationship between employers and employees is generally very good. However, navigating Austrian employment law can be complex. There isn't a single labor code; instead, multiple laws and collective bargaining agreements govern employment relationships.

Employment contracts & must‑have clauses

While written employment contracts are common, they are not legally required in Austria; verbal agreements are also valid. However, you must provide employees with a written statement of their main rights and duties, known as a Dienstzettel. This document should be provided at the beginning of the working relationship.

Here are the essential clauses that must be included in the Dienstzettel:

• Employer and employee details: Full name and address of both parties.
• Start date: The date the employment begins.
• Job details: A clear description of the employee's duties and their job classification.
• Workplace: The primary location of work.
• Salary: The basic salary or wage, any additional pay, and the payment date.
• Working hours: The normal daily and weekly working hours.
• Leave entitlement: The amount of annual leave.
• Notice periods: The notice periods for termination.
• Collective agreements: Reference to any applicable collective bargaining or works council agreements.

Probation periods

You can agree to a probationary period at the start of employment. This period allows both you and the employee to assess the working relationship.

• Duration: The maximum probation period is one month. For apprentices, it can be up to three months.
• Termination: During the probation period, either you or the employee can terminate the contract at any time without giving a reason or a notice period.
• Agreement: A probation period is not automatic; it must be explicitly agreed upon in the employment contract.

Working hours & overtime

Austrian law sets clear limits on working hours to ensure a healthy work-life balance.

• Overtime: Hours worked beyond the standard 40-hour week are considered overtime. Overtime is generally compensated at 150% of the employee's regular hourly rate.
• Average Weekly Hours: Over a 17-week period, an employee's average weekly working time cannot exceed 48 hours.
• Refusing Overtime: Employees have the right to refuse overtime that would extend their workday beyond 10 hours or their workweek beyond 50 hours.

Public & regional holidays

Austria has 13 national public holidays. If a public holiday falls on a regular workday, employees are entitled to a paid day off. Some states also have additional regional holidays.

National Public Holidays in 2025:

• January 1: New Year's Day
• January 6: Epiphany
• April 21: Easter Monday
• May 1: Labour Day
• May 29: Ascension Day
• June 9: Whit Monday
• June 19: Corpus Christi
• August 15: Assumption of Mary
• October 26: Austrian National Day
• November 1: All Saints' Day
• December 8: Immaculate Conception
• December 25: Christmas Day
• December 26: St. Stephen's Day

Hiring contractors in Austria

Engaging independent contractors can be a flexible way to access specialized skills for project-based work. Contractors are responsible for their own taxes and social security contributions. However, it is crucial to classify workers correctly to avoid significant risks.

Independent Contractors vs. Employees

A key distinction is that independent contractors are self-employed and not subject to the same level of control and integration as employees. They typically have more autonomy in how they complete their work.

Misclassification Risks

Austrian authorities examine the actual working relationship, not just the contract, to determine a worker's status. If a worker is found to be misclassified as a contractor when they should be an employee, your company could face serious consequences, including:

• Back payment of social security contributions and wage taxes.
• Fines and other penalties.
• Legal disputes and potential reclassification of the worker as an employee, granting them full employee rights retroactively.

An Employer of Record (EOR) can help you mitigate these risks. By partnering with an EOR, you can ensure your contractors are classified correctly and that all local labor and tax laws are followed. This allows you to focus on your business goals without the administrative and legal burdens of international hiring.

Paying your team in Austria involves understanding a unique system of social security, collective agreements, and special payments. The country's strong economy and social framework mean payroll is more than just a monthly salary. It's a comprehensive structure that includes robust social security contributions from both you and your employees, along with special payments that are common practice.

Payroll cycles & wage structure

In Austria, you pay your employees monthly. You should ensure the payment reaches them by the last working day of the month.

A key feature of Austrian payroll is the 13th and 14th month salary. These are extra payments, often called holiday and Christmas bonuses, that you pay in addition to the regular monthly salary. These special payments are usually detailed in the relevant collective bargaining agreement (CBA).

You must provide a payslip for each payment. This can be in paper or electronic form. The payslip needs to clearly show:

• Gross salary
• Tax deductions
• Social security contributions
• Net pay

Overtime & minimums

Standard full-time work is typically 40 hours per week, but many collective bargaining agreements reduce this to 38.5 hours. Overtime is paid at a premium rate of 150% of the normal salary.

Austria does not have a national minimum wage set by law. Instead, minimum pay rates are established through collective bargaining agreements that cover most industries. These agreements ensure fair wages for almost all employees.

Employer taxes and contributions

As an employer, you are responsible for several contributions that fund Austria's social welfare system. These are calculated as a percentage of your employee's gross salary.

Employee taxes and deductions

Employees also contribute to the social security system. You withhold these amounts from their gross pay. The main deduction is for income tax, which is progressive.

Here are the employee social security contributions:

Income tax rates for 2025 are as follows:

In Austria, you'll find a strong system of employee benefits and leave entitlements. The country's labor laws focus on providing a healthy work-life balance for employees. This means you can expect generous paid time off and comprehensive social security coverage. Understanding these benefits is key to successfully managing your workforce in Austria.

Statutory leave

Austrian law provides several types of mandatory leave for employees.

• Annual Leave Employees are entitled to 25 paid leave days each year if they work a typical five-day week. After 25 years of service, this increases to 30 days. For those working a six-day week, the entitlement is 30 days, which increases to 36 days after 25 years of employment.
• Sick Leave If you get sick, you are entitled to paid sick leave. The duration of full pay depends on your length of service and ranges from six to 12 weeks. After this period, you may receive partial pay for an additional four weeks.
• Maternity Leave Expectant mothers receive 16 weeks of maternity leave, typically starting eight weeks before the due date and extending eight weeks after birth. This can be extended to 12 weeks after birth in certain situations like C-sections or premature births.
• Parental Leave Parents are entitled to take parental leave until their child's second birthday.
• Care Leave You can take up to one week of paid leave per year to care for a sick family member in your household. This can be extended by another week if the child is under 12 years old.

Public holidays & regional holidays

Austria has 13 national public holidays. Employees are entitled to a paid day off for these holidays.

Typical supplemental benefits

Beyond the legal requirements, many employers in Austria offer additional benefits to attract and retain talent.

How an EOR can help with setting up benefits

Navigating a new country's employment laws and benefit expectations can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR acts as the legal employer for your staff in Austria. They handle all the administrative tasks, including payroll, tax contributions, and benefits administration. This ensures you are fully compliant with Austrian labor laws from day one. An EOR can also help you create a competitive benefits package that aligns with local market standards. This allows you to attract top talent without needing to become an expert in Austrian employment regulations.

Letting an employee go in Austria involves a clear process. You can end an employment contract in a few ways, like through a mutual agreement or by giving notice. It's best to put everything in writing to avoid confusion. If your company has a works council, you need to inform them before giving notice to an employee.

Notice periods

When you let an employee go, you must give them notice. The length of this notice period depends on how long they have worked for you.

An employee who decides to leave must give you one month's notice. In some cases, like serious misconduct, you can dismiss an employee immediately without a notice period.

Severance pay

Austria has two systems for severance pay. The system that applies depends on when the employee started their job. For employees who started before 2003, the employer pays a lump sum based on their length of service. This can be up to twelve months' salary for very long-serving employees.

For employees who started after 2003, a different system is in place. In this system, employers pay a small percentage of the employee's monthly salary into a special fund. When the employee leaves, they can claim their severance from this fund.

How Rivermate handles compliant exits

Navigating employee exits in a different country can be tricky. We make sure every step of the offboarding process follows Austrian law.

Here’s how we help:

• Clear Communication: We handle all the necessary paperwork and communication in writing.
• Correct Notice Periods: We calculate the right notice period based on the employee's service time.
• Severance Management: We make sure severance pay is handled correctly according to the applicable system.
• Works Council: If you have a works council, we guide you through the consultation process.

We manage these details so you can focus on your business. Our goal is to make the process smooth and compliant for everyone involved.

Navigating visas and work permits in Austria can seem complex, but it's straightforward once you understand the system. For anyone outside the European Union (EU) or European Economic Area (EEA), securing the right to work involves a specific process. Austria uses a points-based system to attract qualified workers from around the world. The most common route is the Red-White-Red Card, which combines a residence and work permit. This permit is typically tied to a specific employer. Think of it as your key to living and working in the country.

Employment visas & sponsorship realities

An Employer of Record (EOR) can be your legal employer in Austria, making the process of hiring and sponsoring visas much simpler. Instead of setting up your own local entity, an EOR handles all the legal requirements for you. This means they can sponsor the necessary work permits for your employees, ensuring everything is done correctly and in compliance with Austrian law.

Here are the practical routes for employment:

• Red-White-Red Card: This is the main work permit for qualified non-EU citizens. It's valid for 24 months and is tied to the sponsoring employer.
• EU Blue Card: This permit is for highly skilled professionals with a university degree and a job offer that meets a minimum salary threshold.
• Jobseeker Visa: Highly qualified workers can apply for this visa to come to Austria for six months to find a job.

An EOR simplifies this by managing the entire application process, from documentation to renewals. This saves you time and reduces the risk of non-compliance.

Business travel compliance

For short-term business trips, you need to follow a different set of rules. You are not permitted to work while on a business visit. These trips are for activities like meetings, negotiations, or conferences.

Many nationalities can enter Austria and the Schengen Area for up to 90 days within a 180-day period without a visa. This includes citizens from countries like the US, Canada, and Australia. However, if you are from a country that requires a visa, you will need to apply for a Schengen C visa for business.

Here’s a list of typical documents needed for a business visa application:

• A valid passport
• A completed application form
• A recent passport-style photo
• Proof of travel health insurance with a minimum coverage of €30,000
• A letter of invitation from the company in Austria
• Proof of accommodation, like a hotel reservation
• Your flight itinerary
• Proof of financial means, such as a recent bank statement