Austria Employment Law & Compliance Guide for Employers
Key employment laws in Austria: what employers need to know
Employment in Austria is governed by statutes such as the Salaried Employees Act (AngG), the Working Time Act and the General Social Insurance Act (ASVG), while pay is set mainly by Kollektivverträge [collective agreements] that cover almost every sector. Foreign employers are often surprised that there is no statutory minimum wage, yet collective agreements fix minimum pay and usually a 13th and 14th salary, and that employer on-costs reach about 30% of gross pay. This page summarises the core employer rules, with official sources.
Austria employment rules at a glance
| Topic | What the rule is | Official source |
|---|---|---|
| Minimum wage | No statutory national minimum wage. Minimum pay is set by sector Kollektivverträge [collective agreements], which cover most employees and bind all employers in the sector through compulsory Economic Chamber membership. Where no agreement exists, a Mindestlohntarif [minimum wage tariff] can apply. | oesterreich.gv.at: Mindestlohntarif |
| Standard working hours | Normal working time is 8 hours a day and 40 hours a week; many collective agreements set less, e.g. 38.5. Including overtime, the maximum is 12 hours a day and 60 hours a week, averaging no more than 48 hours over 17 weeks. | USP (Federal Government business portal): overtime and maximum working time |
| Overtime pay | Overtime carries a 50% premium, or 1.5 hours off per overtime hour if agreed. Employees may refuse overtime beyond 10 hours a day or 50 hours a week without giving reasons. Collective agreements often add higher night, Sunday and holiday premiums. | USP: overtime and maximum working time |
| Paid annual leave | 5 weeks a year: 25 working days on a 5-day week (30 on a 6-day week), rising to 6 weeks after more than 25 years with the employer. In the first year, leave accrues pro rata for 6 months, then in full. | USP: annual leave |
| Public holidays | 13 paid public holidays nationwide under the Rest Periods Act, including 1 May, 26 October (National Day) and 8 December. Employees may also declare one day of annual leave a personal holiday each year. | Rest Periods Act section 7 (ARG), RIS |
| Sick leave | Employer pays full salary for 6 weeks per work year, rising to 8 weeks after 1 year, 10 after 15 years and 12 after 25 years, then half pay for 4 weeks. The health insurer then pays sickness benefit. | USP: sick leave |
| Maternity and parental leave | Work ban 8 weeks before and 8 weeks after birth (at least 12 after premature, multiple or caesarean births), paid by the health insurer as Wochengeld. Karenz [parental leave] runs until the child's 2nd birthday if both parents share it, or 22 months for one parent. | Chamber of Labour: maternity protection rules |
| Probation period | Maximum 1 month. Either party may end the employment at any time during probation without notice or reasons. It must be agreed at the start and cannot be extended. | USP: types of termination |
| Notice period | Employer notice is 6 weeks, rising to 2 months after 2 years, 3 after 5, 4 after 15 and 5 months after 25 years, ending on a quarter-end unless the contract allows the 15th or month-end. Employee notice is 1 month to month-end. | USP: dismissal with notice |
| Severance pay | Under Abfertigung NEU (employment since 2003) the employer pays 1.53% of monthly gross pay into a severance fund from the second month; the employee draws on it after 3 contribution years. Older contracts may carry a lump sum of 2 to 12 months' pay. | USP: Abfertigung NEU |
| Employer social contributions | 20.98% social insurance (pension 12.55%, health 3.78%, unemployment 2.95%, accident 1.1%, other 0.6%) up to EUR 6,930 a month in 2026, plus 1.53% severance fund, 3.7% family levy (DB), about 0.3 to 0.4% DZ and 3% municipal tax: about 30% in total. | PwC Worldwide Tax Summaries: Austria, other taxes (official ÖGK page not reachable) |
| Employee social contributions | 18.07% of gross pay up to EUR 6,930 a month in 2026: pension 10.25%, health 3.87%, unemployment 2.95% (reduced for low incomes) and 1% housing and chamber levies. Special payments carry 17.07%. | PwC Worldwide Tax Summaries: Austria, other taxes |
| Income tax on salaries | Employer withholds Lohnsteuer [wage tax] monthly. 2026 bands: 0% up to EUR 13,539, then 20%, 30%, 40%, 48% (from EUR 70,365), 50% (from EUR 104,859) and 55% above EUR 1 million. 13th and 14th salaries: 6% after a EUR 620 exemption, within limits (higher rates on large amounts). | PwC Worldwide Tax Summaries: Austria, taxes on personal income |
| Mandatory bonuses and 13th-month pay | Not required by statute, but almost all collective agreements require a 13th (holiday) and 14th (Christmas) salary, usually one month's pay each. These special payments carry lower social insurance and a 6% tax rate within limits. | USP: pay (Entgelt) |
| Work permits for foreign nationals | Non-EU/EEA/Swiss nationals need a Red-White-Red Card (points-based; other key workers must earn at least EUR 3,465 a month in 2026) or an EU Blue Card (EUR 55,678 a year in 2026). The employer can apply in Austria; the AMS checks the criteria. | USP: Red-White-Red Card |
| Employment contract requirements | The contract can be oral or written, but the employer must issue a Dienstzettel [written statement of terms] without delay after the start, covering pay, hours, leave, notice, the collective agreement and the severance fund. Registration with the health insurer is due before work starts. | Employment Contract Law Adaptation Act section 2 (AVRAG), RIS |
Employer obligations in Austria, topic by topic
Filter by primary service relevance
Does an employment contract in Austria have to be in writing, and how long can probation last?
How many hours can employees in Austria work, and how is overtime paid?
Is there a minimum wage in Austria, and how are salaries paid?
How much paid leave, sick pay and parental leave do employees in Austria get?
What social contributions and payroll taxes does an employer in Austria pay?
How can an employer in Austria dismiss an employee, and what notice and severance apply?
Can a company hire a non-EU national in Austria, and which permit is needed?
When is a contractor in Austria treated as an employee?
Which collective agreement applies in Austria, and what does it control?
Key employment laws in Austria and official sources
- Salaried Employees Act (Angestelltengesetz, AngG) — Core employment-contract rules for salaried staff, including probation (section 19) and notice periods (section 20), applied to blue-collar workers since 2021.
- Working Time Act (Arbeitszeitgesetz, AZG) — Sets normal and maximum working hours, overtime premiums and record-keeping duties.
- Leave Act (Urlaubsgesetz, UrlG) — Grants 5 weeks of paid annual leave, rising to 6 weeks after 25 years of service.
- Employment Contract Law Adaptation Act (AVRAG) — Requires the Dienstzettel statement of terms and covers transfers of undertakings and other contract rules.
- General Social Insurance Act (ASVG) — Governs registration, contributions and benefits for health, accident and pension insurance of employees and free service providers.
- Corporate Employee and Self-Employed Pension Act (BMSVG) — Sets the 1.53% severance fund contribution (Abfertigung NEU) and payout rules.
- Income Tax Act 1988 (Einkommensteuergesetz, EStG 1988) — Sets income tax bands, the wage tax withholding system and the taxation of special payments.
- Act on the Employment of Foreign Nationals (Ausländerbeschäftigungsgesetz, AuslBG) — Regulates labour-market access for non-EU nationals, including the Red-White-Red Card criteria.
FAQs: hiring employees in Austria
Can a foreign company hire employees in Austria without a local entity?
Yes. A foreign company can employ staff in Austria directly by registering as an employer with the health insurer (ÖGK), paying Austrian social insurance and applying the relevant collective agreement, although the activity may create a permanent establishment for tax. Alternatively, an Employer of Record employs the worker locally. In Austria that model counts as personnel leasing under the Temporary Agency Work Act, which requires a trade licence and, for providers outside the EEA, special approval.
How much does an employee cost in Austria on top of gross salary?
Employer on-costs are about 30% of gross pay in 2026: 20.98% social insurance up to EUR 6,930 a month, 1.53% severance fund, 3.7% family burden equalisation levy, about 0.3 to 0.4% chamber surcharge and 3% municipal tax. Most employees also receive 14 salaries a year under collective agreements, so annual cost is normally calculated on 14 monthly payments plus these charges.
What is the minimum wage in Austria in 2026?
Austria has no statutory minimum wage in 2026. Minimum pay is set by sector collective agreements, which cover most employees and bind all employers in the sector through compulsory Economic Chamber membership. Each agreement sets pay grades by job and experience and usually requires a 13th and 14th salary. Where no agreement applies, a minimum wage tariff can set the floor, for example for domestic workers.
How much notice and severance does an employer owe when dismissing an employee in Austria?
Employer notice is 6 weeks in the first 2 years, rising to 2, 3, 4 and finally 5 months after 25 years, normally ending on a quarter-end unless the contract allows the 15th or month-end. For employment since 2003 there is no lump-sum severance: the employer pays 1.53% of monthly pay into a severance fund throughout. Employees with 6 months’ service can challenge a dismissal, and any works council must be informed first.
Can a company hire a foreign national in Austria, and what permit is needed?
Yes. EU, EEA and Swiss citizens have free access to the labour market. Others need a permit tied to the employer, mainly the points-based Red-White-Red Card (other key workers must earn at least EUR 3,465 a month in 2026) or the EU Blue Card (at least EUR 55,678 a year in 2026). The employer can apply in Austria, and the AMS checks the criteria before the residence authority issues the card.
Is it risky to engage contractors instead of employees in Austria?
Yes, if the contractor works like an employee. Austrian authorities look at the real arrangement: instructions, fixed hours, personal performance and integration indicate employment. Joint payroll audits can reclassify contractors and charge back social insurance with surcharges and payroll taxes, and the worker can claim collective-agreement pay and leave. The freier Dienstvertrag [free service contract] is a middle category that still requires social insurance registration.
Related NNRoad resources for Austria: Employer of Record in Austria · Payroll in Austria · Hiring foreign employees in Austria · Contractors and on-demand talent in Austria · Austria employer cost calculator
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Regulation Updates in Austria
Discover the latest employment and compliance updates in Austria — helping you stay ahead in a changing regulatory landscape.
Asylum and Migration Pact Adaptation Act (AMPAG)
What it is: The Asylum and Migration Pact Adaptation Act (AMPAG) has been adopted and transfers family reunification into the residence/quotas framework while implementing EU rules on combined residence-and-work authorisations, creating employer-facing changes to work permits.
What it changes: The policy integrates family reunification into the residence/quotas system and introduces EU-aligned combined residence-and-work authorisations, affecting how work permits are issued for employers to be aligned with these new rules.
Who is affected:
- Workers or employers explicitly mentioned or clearly implied by the policy summary.
What employers should do:
- Prepare for changes to work permits by aligning processes with the new combined residence-and-work authorisations.
- Review current staff permits and planning to accommodate the updated residence/quotas framework.
Notes: Effective month: 2026-05.