Do you want to hire an employee in Austria without a legal entity but need an Austrian payroll? IPS can help you hire and pay employees in Austria in compliance with the law, even without an Austrian branch or permanent establishment.
There are 2 ways you can hire someone in Austria without a permanent establishment:
- Employer of Record (Austria) – here your employee is hired directly by us and deployed to you full time. This is also known as employee leasing in Austria.
- Direct employment in your company but with payroll accounting according to Austrian law by registering your company as a foreign employer.
Both employment options offer its advantages and disadvantages. Contact us to find out which one suits your project better. We will be happy to advise you and find the best solution for your company.
IPS is your global payroll solution for a successful and fast international expansion without a permanent establishment.
Remote Work Full Time from Austria – Information for Hiring Employees in Austria
To make sure you succeed abroad right away, IPS as your international payroll partner is here to assist you in hiring your employees correctly in Austria and preparing Austrian payroll in accordance with the country. Following some data to bring you closer to the Austrian payroll system.
The social security system in Austria
Total Employer cost in Austria
The non-wage labor costs in Austria amount to about 30% for the employer. Thus, non-wage labor costs in Austria are significantly above the European average.
- Health insurance:
3.78% of max. €4,860
- Pension insurance:
12.55% of max. 4,680€
- Accident insurance:
1.4% of max. 4.680€
- Unemployment insurance:
3% of max. 4.680€
- Company pension plan:
1.53% of the actual salary
- Housing subsidy:
0.5% of max. 4,680€
- Insolvency supplementary insurance:
0,35% of max. 4.680€
If you don’t have a branch in Austria, you need a service like IPS to calculate and pay these social benefits correctly according to Austrian law.
With IPS’s international payroll services in Austria, you ensure that your employee is payrolled in compliance with Austrian law.
Labor Law in Austria
- When calculating salaries, it should be noted that employers without a registered office in Austria are also obliged to pay a salary in accordance with the established collective agreements. This applies when the employee has Austria as his or her usual place of work. Otherwise, there is a risk of penalties, with fines ranging from €1,000 to €10,000.
- A working week in Austria is 40 hours.
- Austria has 13 public holidays. A vacation entitlement of 25 to 30 vacation days exists, depending on the number of working days per week.
- In the event of illness, there is a right to continued payment of wages for 6 weeks at full pay and for a further four weeks at half pay. Other continued payments are specified in many special regulations.
- There are only a few industries that are not subject to a collective agreement.
- In Austria, it is also important to note the distinction between white-collar and blue-collar workers, each of which is subject to different laws. Salaried employees include any commercial services, all office activities and other higher non-commercial services. However, there is no exact legal regulation describing the activities of a blue-collar worker.
- As your international payroll accountant in Austria, we ensure that you are always equipped with the necessary information.
Terminations in Austria
Notices of termination are not bound by form, but the written form is recommended. The period of notice for salaried employees is:
- In the 1st and 2nd year of service:
- from the 3rd year of service:
- from the 6th year of service:
- from the 16th year of service:
- from the 26th year of service:
These periods may be modified by collective agreements and employment contracts.
For employment contracts concluded after January 1, 2003, there is a new system whereby the employer pays 1.53% of each gross salary payment into a special fund (the so-called employee pension fund). After termination, the employee has the option of either having the contributions from this fund paid out as severance pay (provided the employment lasted longer than 3 years) or leaving the amounts in the fund, into which any new employer continues to make monthly payments. After termination of employment, the employer has no obligation to pay severance pay.
As your international payroll company in Austria, we ensure that you do not overpay the terminated employee and that you comply with the legal framework.