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Austria has a comprehensive employment framework with mandatory social insurance contributions, generous leave entitlements, and collective bargaining agreements that apply across most industries. Rippling EOR handles the complexity.
Austria has a sophisticated professional market with deep talent pools in technology, consulting, financial services, engineering, tourism, and life sciences. Vienna is the primary business and technology hub, with Graz, Linz, and Salzburg as growing secondary centres. Austria's central European location, high quality of life, and multilingual (German + English) professional environment make it an attractive location for international employees and companies with Central European operations.
Austrian employment law (ABGB — General Civil Code; Angestelltengesetz — Salaried Employees Act; Arbeitszeitgesetz — Working Time Act) is employee-protective with mandatory Kollektivvertrag (KV) compliance, significant notice periods, and the Abfertigung Neu portable severance fund. EOR is particularly valuable for navigating KV compliance and ÖGK social insurance setup without establishing an Austrian entity.
Establishing an Austrian GmbH requires minimum €35,000 share capital (reduced from €35,000 in 2024 minimum cash contribution of €17,500), notarial deed, Firmenbuch (commercial register) entry, ÖGK ASVG registration, and WKO (Austrian Chamber of Commerce) registration — typically 3–5 weeks. EOR is the right choice for 1–5 employees, initial Austrian market entry, or where KV compliance complexity is a concern. At 10+ employees with long-term commitment, a local entity becomes cost-competitive.
ÖGK ASVG employee contributions (approximate 2024): health insurance (Krankenversicherung): 3.87%; pension insurance (Pensionsversicherung): 10.25%; unemployment insurance (Arbeitslosenversicherung): 3.0%; accident insurance (Unfallversicherung): 0% (employer-only); housing fund (Wohnbauförderungsbeitrag): 0.5%. Total employee ASVG contribution: approximately 18.12% of gross salary. Income tax (Lohnsteuer): withheld at progressive rates — 0% up to €12,756/year; 20% €12,757–20,818; 30% €20,819–34,192; 40% €34,193–66,612; 48% €66,613–€99,266; 50% above €99,267 (2024 rates). 13th/14th month pay taxed at flat 6% (privileged taxation rate).
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ÖGK ASVG employer contributions (approximate 2024): health insurance: 3.78%; pension insurance: 12.55%; unemployment insurance: 3.0%; accident insurance (Unfallversicherung — AUVA): 1.1%; Abfertigung Neu (MV Kasse): 1.53%; housing fund (Wohnbauförderungsbeitrag): 0.5%; insolvency fund (Insolvenz-Ausfallgeld-Fonds): 0.1%; miscellaneous levies: ~0.55%. Total employer ASVG + statutory contributions: approximately 21.7% of gross salary. KV 13th month (Urlaubsgeld): ~8.33% additional annual provision. KV 14th month (Weihnachtsgeld): ~8.33% additional annual provision. Total employer on-cost: approximately 38–42% of monthly salary.
Austrian income tax (Lohnsteuer) rates 2024: 0% up to €12,756/year; 20% €12,757–20,818; 30% €20,819–34,192; 40% €34,193–66,612; 48% €66,613–99,266; 50% above €99,267. 13th and 14th month pay taxed at privileged 6% flat rate. Annual wage tax adjustment (Lohnsteuerausgleich) by the employer in December or filed by employee by April 30. Rippling EOR manages Lohnsteuer withholding and monthly remittance to Finanzamt.
Annual leave: 5 weeks (25 working days) per year for the first 25 years of employment; 6 weeks (30 working days) from the 26th year. Leave entitlement accrues from the first day of employment. Public holidays: 13 national holidays (including Easter Monday, Whit Monday, Corpus Christi, National Day October 26, All Saints Day, Immaculate Conception). Sick leave: employer pays full salary for 6–12 weeks depending on seniority; subsequent sick leave paid by ÖGK (70% of daily rate for up to 52 weeks). Maternity leave: 8 weeks pre-birth (Mutterschutz) + 8 weeks post-birth — ÖGK pays Wochengeld (maternity allowance) at net income before leave. Paternity leave: no statutory paid paternity leave in Austria (parental leave — Elternkarenz — is available but unpaid by employer). Parental leave (Elternkarenz): up to 2 years per parent (Kinderbetreuungsgeld from the state).
Notice periods under Angestelltengesetz: employer must give notice of 6 weeks (1–2 years); 2 months (2–5 years); 3 months (5–15 years); 4 months (15–25 years); 5 months (25+ years). KV may specify longer notice. Employee notice: 1 month (standard for most employees). Notice must be given as of the end of a calendar quarter (Vierteljahresende) or, if agreed in the contract, end of calendar month. Abfertigung Neu: MV Kasse balance remains with the employee on any termination after 3 years of contribution. Wrongful dismissal: labour courts (Arbeits- und Sozialgericht) can order reinstatement or compensation. Rippling EOR manages the termination process including ÖGK deregistration.
EU/EEA nationals: free right to work in Austria — registration at Magistrat or Behörde within 3 months. Non-EU nationals: work permit (Beschäftigungsbewilligung) or Red-White-Red Card (for highly skilled workers — points-based system; salary threshold approximately €3,480/month gross for key worker category in 2024). EU Blue Card available. Processing: 4–8 weeks. Rippling EOR can support Red-White-Red Card applications through its Austrian entity.
Statutory benefits: ÖGK ASVG social insurance (health, pension, accident, unemployment — employer approximately 21.7% + employee approximately 18.3% of gross salary); mandatory accident insurance (ÖGK AUVA); and Abfertigung Neu (employer contributes 1.53% of gross salary monthly into the employee's MV Kasse — portable severance fund). The relevant Kollektivvertrag (KV — collective bargaining agreement) typically mandates 13th and 14th month pay (Urlaubs- and Weihnachtsgeld).
Market standard: supplemental health insurance (for access to private specialist care — increasingly common); sport/wellness benefit; public transport pass (Wiener Linien Jahreskarte — KES common in Vienna); home office allowance; and annual bonus. KV 13th/14th month pay is the most significant additional annual cost — effectively adding 16.7% to annualized salary costs.
Rippling EOR Austria operates through a local GmbH entity. Key configuration: ÖGK ASVG employer registration; MV Kasse (Abfertigung Neu) provider selection (Niederländische Pensionskasse or similar); KV identification per employee's role and employer sector; 13th/14th month payment provisioning and scheduling; and Lohnsteuer withholding. Typical onboarding: 2–3 weeks. KV identification is the most important setup step — the KV governs minimum salary, notice periods, and benefit entitlements. Rippling EOR determines the correct KV before drafting the employment contract.
Abfertigung Neu (Mitarbeitervorsorgekasse — MV Kasse, effective for employment contracts from January 1, 2003) is Austria's portable severance fund. The employer contributes 1.53% of gross monthly salary into the employee's individual MV Kasse account from the first month of employment. The fund vests after 3 years. On termination (for any reason), the employee can leave the balance in the MV Kasse for future use (it follows them to their next employer) or withdraw it after 3+ years of contribution. This system replaced the old lump-sum severance (Abfertigung Alt) for new contracts and eliminates sudden large termination payments.
Austria's Kollektivvertrag (KV — collective bargaining agreement) is sector-specific and determines: minimum salary grades (Gehaltsschema); notice periods; additional benefits; and typically mandates 13th month (Urlaubsgeld — holiday pay) and 14th month (Weihnachtsgeld — Christmas pay) salary payments. The applicable KV is determined by the employer's primary business activity (NACE code). Most tech companies fall under the KV für Angestellte der Industrie or a similar agreement. Rippling EOR identifies and applies the correct KV for each Austrian employee engagement.
Austrian 13th month (Urlaubsgeld) is typically paid in June and 14th month (Weihnachtsgeld) in December, each equal to one month's gross basic salary (or as defined by the applicable KV). Both are subject to a privileged 6% flat income tax rate (plus social insurance), significantly reducing the tax burden compared to regular salary. Together they add approximately 16.7% to the annualized salary cost (2 × 1/12 of annual salary). Rippling EOR provisions both payments monthly and pays them per the KV schedule.
Austria has no federal national minimum wage. The applicable KV (collective bargaining agreement) for each sector sets minimum wage grades. Most KVs have been raising minimums significantly — the Austrian Chamber of Labour (AK) targets minimum wages of €2,000/month gross across all CBAs. For professional tech employees, market salaries typically exceed KV minimums. Rippling EOR applies the correct KV minimum salary for each employee's role classification.
