Can I hire employees in Austria without setting up a local company?

Yes, by using an Employer of Record (EOR) or PEO in Austria, you can legally employ local staff without establishing an Austrian legal entity. The EOR becomes the formal employer while you manage the employee’s daily work.

What is the difference between an EOR and a PEO in Austria?

An EOR acts as the legal employer on your behalf and fully assumes responsibility for employment compliance, payroll, and registrations. A PEO typically supports companies that already have an Austrian entity and shares HR responsibilities rather than fully employing the worker.

Are permanent contracts mandatory in Austria?

Permanent (indefinite) contracts are the default and most common employment type in Austria. While fixed‑term contracts are permitted, they must be justified and are subject to more stringent regulation under Austrian labor law.

How much does it cost to employ someone in Austria?

Employer costs in Austria generally amount to approximately 21–22.5% on top of the gross salary, depending on the employment structure and municipal tax applicability. This includes social security and mandatory contributions.

Are 13th and 14th salary payments required in Austria?

They are not mandated by national law but are standard practice in Austria and often required under collective bargaining agreements or individual employment contracts. Most employees expect these additional payments.

How does severance work in Austria?

Austria uses a mandatory severance fund system. Employers contribute 1.53% of gross salary monthly into an employee‑specific fund, which can be accessed in cases of termination, resignation, or retirement.

What notice period applies when terminating an employee in Austria?

Statutory notice periods generally start at six weeks and increase with employee seniority. Longer notice periods may apply based on employment contracts or collective bargaining agreements.

How many vacation days do employees receive in Austria?

Employees are entitled to at least 25 paid vacation days per year, increasing to 30 days after longer service. Public holidays are granted in addition to annual leave.

Who handles payroll taxes and social security when using an EOR in Austria?

When hiring through EuroDev’s EOR service in Austria, all payroll calculations, tax withholdings, social security payments, and reporting obligations are handled by EuroDev.

How quickly can I hire someone in Austria through an EOR?

Hiring through an EOR is significantly faster than setting up a local entity. In most cases, employees can be onboarded within a few weeks, subject to contract finalization and registrations.

Hire Employees in Austria with an Employer of Record

Expanding your team in Austria does not require establishing a local Austrian legal entity.

With EuroDev’s Employer of Record (EOR) and HR outsourcing services in Austria, you can employ local talent in full compliance with Austrian employment law — without setting up a subsidiary. EuroDev formally employs your staff, while you remain in charge of their daily tasks and performance.

Our team takes care of:

Austrian‑compliant employment contracts
Payroll processing and wage tax filings
Social security registrations and contributions
Continuous HR administration and labor law compliance

Talk to our EOR experts today

Hiring Employees in Austria with an Employer of Record

An Employer of Record solution enables international companies to hire employees in Austria without establishing a local branch or legal entity. EuroDev acts as the legal employer on record, assuming responsibility for employment compliance, payroll, and statutory reporting, while you direct the employee’s operational work.

How EuroDev Supports Your Hiring in Austria

1. Employee selection

You identify and select the employee you wish to hire in Austria.

2. Employment contract setup

EuroDev prepares and signs an Austrian employment contract that aligns with national labor law and the relevant collective bargaining agreement (CBA), where applicable.

3. Payroll & tax administration

We run payroll on your behalf, calculate income tax and social charges, and submit all required declarations to Austrian authorities.

4. Ongoing compliance & HR support

Throughout the employment relationship, EuroDev manages HR administration, statutory benefits, paid leave, and compliance obligations.

Employer of Record vs Setting Up a Legal Entity in Austria

An EOR is typically suitable if:

Speed to hire is a priority
You want to explore the Austrian market before committing long-term
Your team will remain relatively small
You prefer to outsource compliance risk

A local entity may be preferable if:

You plan to employ a large workforce in Austria
A permanent business presence is required
Payroll and HR will be handled internally

Key differences at a glance

	Employer of Record	Local Entity
Setup time	Short (Weeks)	Long (months)
Legal responsibility	EuroDev	Your business
Payroll & Compliance	Managed by EuroDev	Managed in-house
Upfront costs	Lower	Higher
Risk exposure	Shared and reduced	Fully yours

Employment Contracts Through an Austrian EOR

Permanent Employment in Austria

Indefinite contracts are the most common employment arrangement and offer strong employee protection.

Key features include:

No predefined end date
Statutory notice periods for termination
Mandatory severance contributions through the Austrian severance fund system
Common entitlement to 13th and 14th salary payments under CBAs or contracts

All employment relationships in Austria are governed by strict labor regulations and widely applicable collective bargaining agreements.

Fixed‑Term Employment Rules

Temporary contracts may only be used for objectively justified, time‑limited needs.
Contracts must specify a clear end date
Repeated renewals may lead to permanent status
Fixed‑term employees generally receive the same statutory benefits as permanent staff

General contract principles:

Employment agreements are typically concluded in writing
Open‑ended (permanent) contracts are the standard form of employment
CBAs often determine salary levels, bonuses, and working time
Fixed‑term employment is allowed but subject to legal limits

EuroDev ensures each contract is legally valid and properly registered.

Termination, Notice Periods & Severance in Austria

Austrian labor law provides extensive protection against termination. Employment at will does not exist.

Probation Periods

In Austria, a probation period (Probezeit) is commonly used at the start of an employment relationship to assess suitability for the role. It must be explicitly agreed, either in the employment contract or written statement (Dienstzettel), and is subject to strict statutory limits. For most roles, the maximum probation period is one month, though applicable collective bargaining agreements may set specific conditions. During this time, either party may terminate the employment immediately and without notice, provided the termination is not discriminatory.

Notice period

Minimum statutory notice starts at six weeks (if employer initiated)
Longer notice applies with increased seniority
Contractual or CBA extensions are common
Salary continues during the notice period

Severance pay

Instead of lump‑sum severance payments, Austria applies a funded severance model:

Employers contribute 1.53% of gross salary each month
Funds are paid into an employee‑specific severance account
Applies to dismissals, resignations, and retirements

EuroDev oversees termination processes to ensure compliance and minimize exposure.

Payroll, Employer Costs & Working Hours in Austria

Employer payroll costs

Hiring through an EOR in Austria typically results in additional employer costs of around 29%-30% on top of gross salary, depending on tax exposure and employment setup.

Common cost components include:

Pension, health, and unemployment insurance
Accident insurance
Insolvency protection
Severance fund contributions
In many cases, 13th and 14th salaries are expected or contractually required.

Social Security & Employer Contributions in Austria

When hiring employees in Austria through an Employer of Record, EuroDev manages social security registrations, contribution calculation, payroll deductions and remittance.

Employer responsibilities handled by EuroDev

Registering employees
Wage tax withholding
Monthly payroll and contribution reporting
Withholding employee contributions
Paying employer social security contributions

Typical employer contribution structure

Social Security: ~21%
Components of social security:
- Health insurance: 3.78%
- Pension insurance: 12.55%
- Unemployment insurance: 2.95%
- Accident insurance: 1.10%

Family Burdens Equalisation Fund (FLAF): 3.70%
Municipal payroll tax: 3.00% (different depending on region)
Mandatory severance fund (Abfertigung neu): 1.53%
Insolvency Remuneration Fund (IEF): 0.55%
Chamber of Commerce Levy: 0.35%

Total estimated employer contribution: ~29%-30% (depending on province and contribution caps)

Working Hours & Overtime in Austria

Standard workweek: 40 hours (8 hours per day)
Many white-collar industries work under CBAs that reduce working hours to 38.5 hours a week
Maximum working hours: 60 hours (12 hours per day)
The average weekly working time cannot exceed 48 hours
Overtime is generally compensated at 150% of the regular hourly wage or time off in lieu (Zeitausgleich), if agreed
CBAs in Austria often override or supplement statutory rules

Paid Vacation Leave & Public Holidays

Employees hired through an EOR in Austria are entitled to statutory paid leave. EuroDev ensures all leave entitlements are tracked and administered correctly.

Annual leave

Minimum of 25 paid vacation days per year
Increases to 30 days after 25 years of service
Applies equally to part‑time employees

Public holidays

13 paid public holidays annually
Observed nationwide

Maternity & Paternity Leave in Austria

Austria provides statutory maternity, paternity, and parental leave entitlements. Benefit payments are largely funded through the social security system when handled correctly.

Maternity leave

16 weeks total
8 weeks before birth and 8 weeks after birth (8 weeks after birth is mandatory)
Leave is mandatory and protected by law
100% income replacement paid via Austrian social security (Wochengeld), subject to statutory calculation rules
Employer top‑up is not mandatory

Paternity leave

1 month ("Family Time Bonus" leave)
Must be taken shortly after the birth of the child
Employment protection applies during approved leave
Benefit is paid via statutory social security, not the employer

Why Companies Choose EuroDev for EOR in Austria

No need to establish an Austrian legal entity
Fully compliant employment, HR, and payroll execution
Local expertise in Austrian labor law and CBAs
One dedicated point of contact for HR, Payroll, and compliance
Flexible and scalable as your Austrian team grows

Hire Employees in Austria with Confidence

Austria has a highly regulated employment framework with strong employee protections. Employment "at will" does not apply when hiring employees in Austria.

EuroDev supports international companies in hiring employees in Austria quickly, compliantly, and without unnecessary legal or administrative risk through its Employer of Record (EOR) and PEO services.

Whether you are making your first hire in Austria or expanding an existing local team, our EOR solution allows you to grow while avoiding the complexity of entity setup, payroll administration, and ongoing compliance obligations.

Get in touch with our team today to discuss hiring in Austria.