Expand your organization into Austria even without an Austrian entity
Austria is a popular destination for businesses looking to expand. The Central European country has a diverse history and culture, a strong economy, and strong ties to neighboring countries such as Germany and Italy.
However, expanding your organization to Austria can take longer than expected. The official language, German, presents a language barrier for many organizations, and the nation’s unique set of business and employment laws can be difficult to navigate. These factors and more can present delays, and the expansion process can take weeks or even months to get traction.
At Horizons, we specialize in helping businesses from all industries to expand abroad, including into Austria. Our professional employer organization (Austria PEO), employer of record, and payroll services can offer you everything you need to start your Austrian expansion rapidly, efficiently, and compliantly.
As the only global PEO with an in-house recruitment team, we can also take care of the sourcing, hiring, and onboarding of your Austrian workforce, along with any associated HR and legal compliance work. Our tailored services can save you thousands of Euros in expansion costs.
Our Austria PEO simplifies your expansion
Horizons enables your business to expand its operations into Austria, without setting up a legal subsidiary.
Rapid Market Entry
Horizons will enable you to source, hire, and onboard professionals across Austria in as little as 48 hours.
Cost-Effective Expansion
Our Austria PEO solution can help you benefit from cost savings of up to 85%, without the need to establish an Austrian entity.
Payroll Outsourcing
Accurate, on-time salary and payroll processing, individual income tax declaration, expense management, statutory benefits administration, and social benefits contribution.
Employee Onboarding
Utilize the relevant provision for all types of Austrian labor contracts, whether a fixed-term or open-ended contract.
Onsite Legal & HR Team
In-country legal guidance through employee acquisition, contract renewals and termination, benefits distribution, and HR compliance; as well as local tax, law, and financial expertise.
Ensure Full Compliance
We ensure that employment contracts are fully compliant and adhere to Austria labor laws and best practices.
Employment & Labor Laws in Austria
📝 Employment contracts in Austria
When hiring in Austria, we strongly recommend that you provide all employees with a written contract of employment. Each contract needs to have any relevant details of the employment arrangement, such as salary, vacation leave, and termination terms. It should be written in German and use the Euro currency for any references to money.
By partnering with our Austria PEO, Horizons’ team of local experts can provide assistance for drafting strong employment contracts that are compliant with local regulations.
⏰ Working hours in Austria
The majority of workers are limited to 40 hours per week and eight hours per day, although some employees may negotiate lower limits via collective bargaining agreements (CBAs) or individual negotiations. For work beyond these limits, employers will need to either offer the time as time off in the future, or pay overtime, which is at least 150% of normal pay (or 200% for nights and weekends).
📅 Public holidays in Austria
Employees in Austria commonly receive the following public holidays (but not necessarily all):
Date | Description | 1 Jan | New Year’s Day |
|---|---|
06 Jan | Epiphany |
13 Apr | Easter Monday |
01 May | Labour Day |
10 May | Mother’s Day |
21 May | Ascension Day |
01 Jun | Whit Monday |
11 Jun | Corpus Christi |
14 Jun | Father’s Day |
15 Aug | Assumption Day |
24 Sep | Saint Rupert’s Day |
26 Oct | National Day |
01 Nov | All Saints’ Day |
15 Nov | Saint Leopold’s Day |
08 Dec | Immaculate Conception Day |
25 Dec | Christmas Day |
26 Dec | St. Stephen’s Day |
🏖 Austria vacation leave
For employees that have worked at least six months with an organization, employers must provide at least 25 days of paid vacation leave. After 25 full years of employment, workers can take an extended allowance of 30 days of paid vacation leave each year.
Some employers may choose to offer more holiday, but these are the legal minimums and most commonly offered vacation allowances.
😷 Austria sick leave
Most employment contracts will offer paid sick leave to employees. The exact number of days and amount of compensation varies, however, and depends on the individual role, any negotiations and CBAs, and the length of employment, among other factors.
👶 Parental leave in Austria
Mothers in Austria are required to take 16 weeks of paid maternal leave, split as eight weeks prior to and eight weeks after the birth. Both parents can take unpaid leave until the child is two years old, and the minimum amount they are entitled to is two months. Employers must retain their positions until at least four weeks after they return to work.
💰 Terminations and severance in Austria
The mandatory notice periods required for terminations vary depending on an employee’s time with a company (once out of any probation period). For less than two years of employment, the notice period is six weeks. For three to five years of employment, the notice period is two months. Six to 15 years is three months, 16 to 25 years is four months, and 26 years or more is five months of notice.
Severance payments are common upon termination in Austria, and employers generally contribute a percentage of salary to a severance fund that is either paid or passed on to the next employer.
The exact terms of terminations and severance can vary significantly, so it is important that you fully understand the specifics of your situation and agreements when employing in Austria. Always get professional advice if you are unsure.
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Austria PEO can mitigate risk for foreign companies and provide guidance through this process.
🏦 Taxation in Austria
Employers and employees in Austria must both contribute a certain amount towards various funds to benefit employees. For example, they must contribute 12.55% and 10.25% of salary respectively to pension insurance, and 3.78% each for health insurance. Employers also need to cover accident insurance for the workplace, at a rate of 1.3%. In total, mandatory social benefit contributions are generally around 32% on top of salary for employers.
Income tax in Austria is progressively rated from 0% to 55% depending on employee income.
The corporate tax rate in Austria is 25%.
🏥 Health coverage in Austria
Austria has a comprehensive public health system, so it is not necessary or the norm for employers to offer private health insurance. However, some organizations may choose to offer it as part of their benefits packages, particularly for more senior-level roles.
💳 Austria compensations & benefits
Compensation laws in Austria
There is no legally determined minimum wage in Austria. However, most roles will have a negotiated minimum, so it is vital that you understand the CBAs and individual negotiations for each employee when hiring in Austria.
Benefit management in Austria
Setting up a benefits system for your Austrian employees can be difficult and complicated to navigate if you are unfamiliar with the country and its labor laws. If you want to tackle the setup independently, you can expect it to take several weeks and potentially present delays to your expansion process.
Horizons offers an alternative to simplify your benefits management through our Austria PEO. Our outsourcing services will cover your benefit setup and management, helping you focus on a faster and more successful expansion.
Request a Proposal
Horizons helps businesses expand into Austria faster
Horizons’ Austria PEO, employer of record, and payroll outsourcing can provide your business with everything needed to start trading in Austria quickly and compliantly. Our Austria experts will help you set up your operation and begin trading in Austria in as little as 48 hours, and could save you up to 85% in expansion costs, whether or not you’ve already registered an entity in the country.
We will take care of all of your expenses, payroll, legal compliance, and more in Austria, as well as all ongoing HR work. And as the only global PEO with a dedicated in-house recruitment team, we are also here to find and hire your local staff, using our Austrian subsidiary as employer of record for your hires so you don’t even need to register an Austrian entity.
Speak to our Austria experts today to find out how our custom outsourcing services can help you to seamlessly expand into Austria.
