Creating and managing your Austria payroll
Austria is an excellent destination for businesses looking to expand. The Central European country has a rich history and culture, a developed economy, and strong links with other European Union members, as well as the rest of the world.
If you are planning an expansion to Austria for your business, an important early step will probably be registering an Austrian entity, building an in-country payroll, and hiring locally. While this is possible to do independently, it can be a complicated process that could cause delays to your expansion efforts and even negatively impact your profits.
Horizons offers a flexible range of Austria payroll outsourcing services for organizations expanding into Austria. Our experts can handle all the legal compliance work, taxes, and payroll-related administration, even acting as your employer of record in the country, making the whole expansion process more efficient and helping you get up and running faster.
Why choose the Horizons payroll solution?
If you have an entity
If your organization has already established an entity in Austria, our Austria payroll outsourcing team can handle all the administration and payroll management so you don’t have to tackle the complicated process yourself.
This Austria payroll outsourcing service is perfect for any organization looking to simplify their Austria payroll and focus on the important work of expanding into Austria successfully.
If you don’t have an entity
If you haven’t established an entity in Austria, our dedicated Austrian subsidiary can work as your employees’ official employer of record. Our team will handle all of your Austria payroll outsourcing, contracts, associated legal work, and associated administration, helping you focus solely on a successful expansion.
This service is ideal for any organization aiming for full flexibility and low risk while expanding into Austria. You will remain autonomous and have full control over your Austrian workforce while not having to deal with any of the complex administration and compliance work.
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Austria payroll guide
What are the rules for payroll tax in Austria?
Employers and employees in Austria must both contribute a percentage of salary to social benefits funds, such as 12.55% and 10.25% of salary respectively to pension insurance, and 3.78% each towards healthcare. Employers in Austria, but not employees, also need to pay 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 progressive, with employees paying rates between 0% to 55% depending on income level
The corporate tax for businesses in Austria is 25% of taxable income.
|
Sickness
|
3.78%
|
|
Unemployment
|
3.00%
|
|
Pension
|
12.55%
|
|
Accident Insurance
|
1.2%
|
|
Miscellaneous
|
0.7%
|
|
Total Employment Cost
|
21.23% |
|
Health Insurance
|
3.87%
|
|
Unemployment
|
3%
|
|
Pension
|
10.25%
|
|
Miscellaneous
|
1.00% |
|
Total Employee Cost
|
17.12% |
|
Up to 11,000 EUR
|
0%
|
|
11,001 – 18,000 EUR
|
25%
|
|
18,001-31,000 EUR
|
35%
|
|
31,001 – 60,000 EUR
|
42%
|
|
60,001 – 90,000 EUR
|
48%
|
|
90,001-1,000,000 EUR
|
50%
|
|
1,000,000 EUR and above
|
55%
|
Rules for contracts and terminations
There are statutory minimum notice periods for employee terminations in Austria, but the exact length varies based on length of time in employment. For under two years of employment, the notice period is six weeks. For three to five years with a company, the mandatory minimum notice period is two months. For six to 15 years employment, the notice period is three months. For 16 to 25 years, notice is four months or more. For 26 years or more, the notice period must be at least five months.
Severance money upon termination is common in Austria, and employers usually need to contribute a fraction of salaries to a severance fund. This is then either paid out upon termination or passed on to the next employer.
The specific terminations terms for each employee can vary, so it is crucial to understand what agreements are in place when terminating employees in Austria.
How to establish Austria payroll outsourcing
Establishing an Austria payroll outsourcing system for local employment can be a long and confusing process. Initially, you will need to register an Austrian subsidiary to act as employer of record for any employees. You will then need to register with various official channels.
Alternatively, you can outsource the setup and management of your payroll to Horizons. We will ensure that your expansion into Austria is as simple as possible, helping you get started in the county faster and more efficiently. Additionally, we can offer our employer of record service, so even organizations without an in-country can benefit from our outsourcing services.
Manage payroll in Austria
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.
