An Employer of Record (EOR) or Professional Employer Organization (PEO) is a company or organization that is legally responsible for paying employees, including dealing with employee taxes, benefits & insurances. As the EOR/PEO of your European or Austrian employees, we provide you with tailored payroll, HR and compliance services. Through this construction, we decrease all the complications such as compliance issues, setting up a foreign establishment and setting up employment contracts in a different language.
Benefits of using an Austrian PEO & Employer of Record in Austria
Expand without an entity
Flexible and cost-effective solution to outsource payroll and HR functions for international expansion
In compliance with foreign local laws & regulations
Minimizes employment liabilities and risks
Reduced risk, as the risks of being an employer fall almost completely on the employer of record
Let's you focus on your core business
You manage your employees
EoR takes care of registration and contact with local authorities
Employment Contracts Austria
In Austria, the general rule is that employment contracts have an indefinite term (permanent employment contract). It is common that an employee is recruited or starts with an initial fixed-term contract before receiving a permanent contract even though there is no limit on the duration of a fixed-term contract or a time limit after which the employee is deemed to be a permanent employee.
Additionally, in Austria it is common for part-time workers to have access to the same employment regulations and the same insurance coverage as full-time employees. This also applied to fixed-term contracts even though there are no periods of notice considering that the contract ends on the date stated in the employment contract.
Curiously, in Austria in order to secure a job it is not necessary a written contract, but an oral agreement between the employer and the employee is accepted. A written employment contracts is recommended especially before the start of the employment relationship due to legal reasons.
Austrian PEO and EOR service providers will support you with the set-up of a local employment contract.
Employment Termination Austria - Notice Periods Austria
In Austria any unlimited employment contract can be terminated by mutual agreement on the termination or by unilateral decision. In the latter, the employer can decide to give a notice period to the employee or to terminate it immediately without mentioning a reason.
Termination with notice by the employer does not usually require a reason for dismissal but it has to respect the following notice periods based on the length of serviced provided by the employee. Being able to terminate a contract is not that common in Europe without a reason is not that common in Europe. Therefore Austria is relatively employer-friendly.
The notice periods in Austria are:
- 0-2 years of service - 6 weeks’ notice period
- 2-5 years of service - 2 months’ notice period
- 5-15 years of service - 3 month's notice period
- 15-25 years of service - 4 months’ notice period
- more than 25 years of service - 5 months’ notice period
All employees must give at least one month's notice, regardless of their length of service.
On the other hand, termination without notice can happen for valid reasons, which are:
- if the employee is disloyal to the employer
- if the employee is unable to perform the promised or appropriate (reasonable) services
- any breach of the prohibition of competition
- if the employee disobeys orders
- if the employee refuses to work for a period deemed reasonable under the circumstances without any legitimate excuse
- if he attempts to induce others to disobey the employers orders
In the case of fair summary dismissal, the employee receives his salary until the date of dismissal together with any pro rata share of special payments.
When working with a PEO or Employer of Record provider in Austria, the provider will assist you through the whole process.
Social Security Tax Austria
What are the primary social security contributions in Austria? And more importantly, what is the amount of the social security contribution that is accounted to the employer? The total primary contribution in Austria for the employer is 21.23% and 18.12% for the employee. Social contribution for the employer in Austria includes:
|(Work) Accident insurance||1.20%|
|Total Social Security Tax (Employment Costs in Austria)||21.23%|
Average Salary Austria & Average Employer Costs Austria
In 2019, the average annual wage in Austria was $53.902,95. This is lower than the average annual wage in the United States: $65.835,58. As an employer, the actual employer costs are 21.23% higher than the gross annual salary as we have seen in the social contribution in Austria. Based on $53.902,95 annual salary, the employment costs would be $65.346,55.
To learn more about the average salaries in Europe and the actual employment costs in Europe, we invite you to read this article on Costs of hiring European employees.
Austrian Payroll Period and Salary Instalments Austria
In Austria, it is common to have a 13th salary month, which is the equivalent to one month of salary. The 13th salary month is usually split in 2 installments which are paid near Christmas time (November/December) and the holiday period in the summer (June/July).
This is not mandatory and the employee is only entitled to it if mentioned in the employment contract.
Working Hours Austria
Austrians see themselves as modern, liberal, professional and cultured workers. They like working hard and at the same time they enjoy spending their free time with their families.
Austrians usually work from 8am to 5pm with an hour of lunch break from Monday to Thursday. On Friday, they're used to working from 8am to 3pm. Provisions for overtime, holiday, and weekend pay vary depending upon each contract. The law enforces a maximum of 48 hours of work per week.
Paid Vacation Leave Austria
In Austria, for all the employees that work 5 days a week, they are entitled to 25 working paid vacation days (5 weeks). However, if an employee has been working for more than 25 years in a specific company, he/she is entitled to 30 working days (6 weeks) of vacation leave.
Annual vacation can be taken in 2 parts but one of them has to be at least of 6 working days.
For more information on paid vacation days in Europe, please feel free to read our blog on paid vacation days in Europe 2021.
Public Holidays Austria
In Austria, Employees are entitled to the following 13 paid public holidays:
- 1: New Year’s Day
- 6: Epiphany
- Easter Monday
- May 1: International Workers’ Day
- Whit Monday
- Corpus Christi
- 15: Assumption Day
- 26: Austrian National Holiday
- 1: All Saints’ Day
- 8: Immaculate Conception
- 25: Christmas
- 26: St. Stephen’s Day
Maternity and Paternity Leave Austria
Working mothers in Austria are not allowed to work in the 8 weeks prior to the birth of the child, as well as for the 8 weeks following the birth. In the case of premature births, multiple births, or cesarean sections, this period is at least 12 weeks. Additionally, if the leave before the birth is shorter than 8 weeks, the remaining weeks can be added after the birth but not exceeding the maximum of 16 weeks.
The maternity pay is based on the average salary received in the prior 13 weeks of employment.
On the other hand, fathers are entitled to 1 month of paid leave. This can start on the day of the birth of the child until the end of the maternity leave period. To be eligible to paternity leave, the father must have worked for at least 182 days and is intended to go back to the work placement.
To read more about Paternity Leave in Europe, we invite you read this blog on Paternity Leave in Europe - A New Directive.
Learn more about PEO and EOR in Europe:
Get in contact or request a quote
Learn more about PEO and EOR in other European countries:
Monique Ramondt Sanders
Executive Vice President | HR Outsourcing