Before hiring employees in Austria, there are a few important things you’ll need to know. Firstly, employees in Austria earn a 13th and 14th month salary, which are paid out in June and November.
In Austria, both parents are not allowed to take parental leave at the same time. Mothers are entitled to 16 weeks of paid maternity leave, and fathers are entitled to one month of unpaid paternity leave.
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Get an overview of what you need to know when hiring in Austria below.
Employees receive a 13th and 14th salary in June and November each year.
Employees in Austria typically work eight hours daily and 40 hours per week.
In Austria, there should always be a special reason for overtime, as continuous overtime is not permitted in Austria.
By law, there is a maximum working time of 10 hours per day, 50 hours per week (and under exceptional circumstances, up to 12 hours per day and 60 per week). This includes overtime with a limit of 60 hours overtime per calendar year. Overtime must be compensated with a 50% surcharge or extra time off, and overtime worked at night or on the weekend will have a 100% surcharge.
Employees are free to refuse overtime without stating any reason if the hours exceed these limits. Employees cannot opt-out of the maximum working hours regulations.
The probationary period is one month. Extending the probation period is not possible in Austria.
The notice period in Austria varies based on the length of employment. It goes as follows:
When employment ends by mutual consent, no notice period is required, however, termination in writing is recommended.
For resignations, the notice period is one month. However, if there is good cause for resignation, based on the employer’s breach of the contract, the notice period doesn’t have to be observed.
Non-compete agreements in Austria must be reasonable in scope and cannot exceed one year. Employers are not required to compensate the employee for the duration of agreement.
Employees who work a six-day week are entitled to 30 days of paid annual leave, which is increased to 36 days a year after 25 years of employment.
Employees who work a five-day week are entitled to 25 days' leave per year.
Employees are entitled to the fully paid sick leave for up to six weeks. This increases with service and the breakdown is:
Employees are entitled to a further four weeks on half-pay, paid for by social security.
Employees are entitled to 16 weeks of paid maternity leave. During this time, they’re paid their average income earned in the last 13 weeks.
After this leave is exhausted, employees can choose to take maternity leave without pay until the child is two years old. During this time, they can receive child care pay from social insurance of EUR12,366,20 in total or 80% of the weekly maternity allowance, whichever they choose.
Employees are also entitled to one month of unpaid paternity leave, which can be taken until the child reaches the age of 24 months. Fathers can also claim child care pay.
In Austria, both parents cannot take parental leave simultaneously.
An employer can expect to contribute 21.23% on top of an employee’s salary in social contributions. This includes sickness, unemployment, pension, accident insurance, and miscellaneous coverage.
Employees in Austria are taxed federally from 0% to 55% depending on their income bracket. Social security contributions total 18.12%.
All employees in Austria hired after January 1, 2003 are entitled to a severance payment. This payment comes from a severance payment fund to which employers contribute 1.53% of employees’ gross salary every month (starting from the second month of the employee's service).
When the employment relationship is terminated, employees are entitled to severance pay except in cases of resignation or termination due to misconduct.
Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast.
We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities.
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