Last updated:
June 9, 2026
Introduction
Austria is one of Central Europe's most talent-rich labour markets. Vienna has made Austria a leading hub of a highly educated workforce spanning engineering, finance, life sciences, and professional services, with a GDP forecast of 0.6% for 2026 and 0.9% for 2027.
However, hiring in Austria involves one of Europe's most complex compliance laws. Austria's mandatory ÖGK social insurance system covers health, accident, pension, and unemployment, pushing employer costs to 21–22% of gross salary.
Collective bargaining agreements (Kollektivverträge) are legally binding within an industry, setting mandatory salary benchmarks. Income tax reaches 55% for high earners, with monthly ELDA (Electronic Data Interchange) payroll reporting required.
An EOR for Austria handles all of it, Dienstvertrag-compliant contracts, ÖGK and social fund contributions, wage tax (Lohnsteuer) remittance, and work permits for non-EU hires while you stay focused on the actual work.
This guide covers Austria's employment laws, payroll obligations, statutory contributions, visa rules, and what hiring through an EOR looks like in practice in 2026.
Austria at a glance
Population: 9.1 million
Currency: Euro
Capital city: Vienna
Language: German
GDP: € 535.7 billion
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Talk to an expertWhat you must know before hiring anyone in Austria
All employees in Austria can freely access the government and labor support whenever they claim to have been maltreated. Filing of complaints with the labor tribunal is common here.
The following are some standard benefits you should know before starting to negotiate an employment contract:
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Entitlements
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Explanations
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Statutory working hours
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8 hours per day and 40 hours per week under theArbeitszeitgesetz (Working Hours Act). Many Collective Bargaining Agreements reduce the workweek to 38 or 38.5 hours (metals industry, banking, white-collar private sector).
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Overtime
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The minimum overtime premium is 50% of the base hourly rate, or 1.5 hours of compensatory time off (Zeitausgleich) per overtime hour. Work on a statutory public holiday carries a 100% surcharge under the Arbeitsruhegesetz, plus the employee is entitled to both their holiday pay and pay for the hours worked.
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Public holidays
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- New Year's Day
- Epiphany
- Good Friday
- Easter Saturday
- Easter Sunday
- Easter Monday
- Staatsfeiertag (Labour Day)
- Mother's Day
- Ascension Day
- Pentecost
- Whit Monday
- Corpus Christi
- Assumption
- National Holiday
- All Saints' Day
- Immaculate Conception
- Christmas Eve
- Christmas Day
- Boxing Day
- New Year's Eve
Dates of these holidays and observances may change based on religious calendars
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Annual leave
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5 weeks per year under theUrlaubsgesetz (Austrian Vacation Act): 25 working days in a 5-day week or 30 working days in a 6-day week. After 25 years of service with the same employer, leave increases to 6 weeks per year (30 working days in a 5-day week, 36 working days in a 6-day week).
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Maternity leave
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16 weeks total under theMutterschutzgesetz (Austria's Maternity Protection Act): 8 weeks before the due date and 8 weeks after birth. Extended to 12 weeks post-natal for premature, multiple, or Caesarean births.
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Sickness during leave
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Sickness during vacation lasting more than 3 calendar days does not count as leave time, provided the employee notifies the employer and submits a medical certificate.
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Anti-discrimination protections
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TheGleichbehandlungsgesetz (Equal Treatment Act ) of 2004 protects against discrimination on the grounds of gender, ethnic origin, religion or belief, age, and sexual orientation.
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Ready to hire in Austria without the compliance challenges?
Book a demo with Skuad and see how it helps you to stay compliant while hiring in foreign countries
Contractors vs. full-time employees
Before you hire an Austrian talent, it's important to know how the local law differentiates between employees and independent contractors
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Legal Aspect
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Employee
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Contractor
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Governing law
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Austrian Labor Law (Arbeitsrecht), Employees Act (Angestelltengesetz), Collective Agreements (Kollektivverträge)
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Austrian Commercial Code (UGB) and Civil Code (ABGB)
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Control and supervision
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Employer tells you how, when, and where to work
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Contractor works independently and decides how to complete tasks
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Tax deduction
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Employer takes out wage tax and pays social security
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Contractor must register as self-employed and pay their own taxes
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Entitlements
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Gets paid vacation, severance pay, healthcare, unemployment benefits, and a pension from the employer
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No legal benefits unless written in the contract.
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Termination protection
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Strong protection under local labor laws (employer must give notice, pay severance)
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Only what's written in the contract
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Contract type
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Employment contract (Dienstvertrag or Angestelltenvertrag)
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Freelance/service agreement (Werkvertrag or freier Dienstvertrag)
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The choice between hiring a full-time employee under Austrian labor law and a freelance contractor (freier Dienstnehmer or Werkvertrag) carries real classification risk in Austria.
Skuad, an EOR service provider, supports both hiring models from a single platform.
EOR for full-time employees
- Acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
- Supports employment contract generation aligned with local labor laws across supported markets
- Facilitates statutory contribution workflows covering applicable social insurance and pension obligations
- Supports payroll processing in 70+ currencies with automated tax withholding and year-end reconciliation
- Helps administer statutory benefits, paid leave, and parental entitlements in line with local requirements
- Assists with termination and offboarding, including notice periods and severance calculations as required locally
EOR for contractor management
- Helps onboard contractors with locally compliant agreements that reduce misclassification exposure
- Supports invoice generation, approval workflows, and payment processing in local currency
- Helps flag classification risk before it becomes a compliance issue with built-in worker classification checks
- Facilitates multi-currency payouts across 70+ currencies with no manual reconciliation
- Helps manage contractor records, contracts, and payment history from a single dashboard alongside full-time employees
Skuad helps you hire full-time employees and contractors, while staying compliant with local laws. See pricing
Hiring in Austria
Hiring in Austria is done both offline and online. However, online hiring has become prominent in recent times. Both part-time and contracted employees are hired online as per the job requirements and through different platforms.
Portals like Monster.com, LinkedIn, Glassdoor, The Local - Jobs, and StepStone have gained genuine popularity among recruiters and job seekers in Austria. Monster is the most popular portal in terms of applications and job postings in Austria.
However, on these platforms, the recruiters can give only limited specifications of the right candidate. So, if you are looking to hire in Austria, you could go through these portals or work with an EOR for a more personalized way of finding the right talent for your company.
Before you start hiring, use Skuad’s free Employee Cost Calculator. It helps you understand the true cost of hiring in Austria.
Probation and termination
Probation period
The probation period in Austria is one month, generally agreed to in the employment contract. Either party can terminate the employment contract without explanation during the probation period.
Termination of service
The termination of an employee's services in Austria by an employer requires advance notice. The legal minimum term of notice for salaried employees is calculated based on the years of service that the employee has served with the company.
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Length of service
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Employer notice period
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Up to 2 years
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6 weeks
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After 2 years (3rd–5th year)
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2 months
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After 5 years (6th–15th year)
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3 months
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After 15 years (16th–25th year)
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4 months
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After 25 years (26th year onwards)
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5 months
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Source: Business service portal
In addition to the notice period, employers have to pay severance pay. If the employment relationship has lasted longer than a month, the employer has to pay 1.53% of the employee's monthly salary as the employee provision fund.
Skuad helps you stay aligned with Austrian termination requirements through Skuad Shield. It helps you cover:
- Notice period calculations aligned with local statutory and CBA requirements across supported markets
- Severance and final settlement workflows that follow local rules
- Statutory notification support where local law requires it
- Termination documentation generated against the relevant employment contract and local labor code
- Misclassification risk monitoring
- Compliance updates as local employment law changes, with version-controlled contract templates
Incorporation: How to set up a subsidiary in Austria
Setting up a subsidiary in Austria is a multi-step, multi-week process, and it demands significant paperwork, legal fees, and local know-how.
You can either register as a traditional private limited company or as FlexCo (a newer startup-friendly version introduced in 2024). Both require a minimum of €10,000 in share capital, with at least €5,000 deposited in cash upfront.
First, you have to open a bank account at an Austrian bank just to deposit that share capital. The bank then puts your money through a KYC (Know Your Customer) review, which alone can take one to four weeks before you can move forward.
Next, you need to notarize your articles of association with an Austrian notary. While this can now be done remotely, it still requires a formal legal process and fees.
After that, you file for registration with the Commercial Court, which takes another two to four weeks and costs €400–€600 in fees. Only after court approval does your bank account become a functioning business account.
You then need to register separately with the tax authority, apply for a VAT number, and register your trade activity with the local district administrative authority. If your business is in a regulated industry like finance or construction, you'll also need to appoint a qualified trade-law managing director.
Before your first employee starts work, you must register them with Austria's national health insurance system (ÖGK) through a separate electronic portal.
The entire setup process typically takes four to six weeks if everything goes smoothly. However, delays at the bank or court can stretch it longer. For most foreign companies hiring a small team, the hassle and overhead often make an Employer of Record (EOR) a far simpler and cheaper option.
Types of visas in Austria
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Visa category
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Details
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Red-White-Red Card
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A “Red-White-Red Card” holder is entitled to a temporary settlement and employment with a particular employer. After 5 years of continuous lawful settlement, holders can apply for the long-term resident EU status.
The “Red-White-Red Card” is issued only if the applicant proves adequate employment. The job must correspond to the qualifications of the applicant and be paid adequately, complying with the special eligibility criteria that are set for the “Red-White-Red Card" which the candidate has applied for.
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Visa C & Visa D
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Visa C permits you to stay in all the Schengen countries and to stay in those countries for 90 days in total, that too within 180 days, given that you fulfill the conditions of general entry.
A Visa D gives you the entitlement to stay in Austria. It can be granted for a duration of 91 days up to 6 months. Holders of a Visa D also enjoy the freedom of movement to other Schengen countries for up to 90 days.
Note: You are not permitted to engage in gainful employment or self-employment during a visa-free stay or a stay within the scope of a Visa C or D described above. Unpaid work may also be considered gainful employment (e.g., an unpaid traineeship or internship).
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Jobseeker Visa
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The Job Seeker Visa is a Visa D issued to Very Highly Qualified Workers (third-country nationals scoring at least 70 points under the RWR Card points system). Valid for 6 months to allow job-searching in Austria. Points are awarded for qualifications, work experience, language skills (German and English), age, and prior salary. The visa itself does not authorize employment; holders must secure a qualifying job offer and convert to a Red-White-Red Card before starting work.
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EU Blue Card Visa
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The EU Blue Card is a residence and work title for highly qualified third-country nationals, valid for 24 months.
Requirements: (a) gross annual salary of at least €55,678 in 2026 (including the mandatory 13th and 14th month salaries), (b) a university degree from a tertiary institution with at least 3 years of study OR (since the 2023 EU Blue Card reform) at least 3 years of relevant professional IT experience within the last 7 years for IT/ICT roles, (c) a binding job offer of at least 6 months matching the qualification, and (d) AMS labour market test confirming no equally qualified jobseeker is registered.
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Student's Residence
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Student residence permit for non-EU/EEA students enrolled at a recognized Austrian university. Work rights include Bachelor students up to 10 hours/week, Master's and PhD students up to 20 hours/week during the semester; full-time work permitted during semester breaks.
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Work permit in Austria
As an EOR in Austria, Skuad helps you with all the requirements and responsibilities related to employment.
On Skuad’s HR platform, the client company can manage its employees’ daily activities and operations.
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Can Skuad act as an employer of record for the work permit?
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Yes.
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Processing time
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6 to 12 weeks for a Red-White-Red Card or EU Blue Card, once documents are complete. The 2025 government reform targets a guaranteed 8-week service standard via the new fully digital RWR Card portal. A National Visa D issued by the embassy abroad takes 15 to 60 days separately
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Work permit process
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1. Candidate and employer prepare documents (passport, qualifications with apostille and certified translation, employment offer matching salary threshold).
2. Application filed at the Austrian embassy or consulate in the candidate's country of residence, or by the employer directly at the Austrian residence authority.
3. AMS reviews the points score, salary, and labour market test (where applicable).
4. Residence authority issues the Red-White-Red Card decision; the embassy issues a Visa D for entry.
5. Candidate enters Austria on a visa D, gives biometrics at the residence authority.
6. Residence authority issues the Red-White-Red Card.
7. Candidate registers residence within 3 days of arrival and is enrolled with ÖGK via ELDA before the first day of work.
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Passport submission
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At the Austrian embassy or consulate abroad for the Visa D appointment, and then at the Austrian residence authority in Austria for the residence permit card and biometrics.
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Work permit validity
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Red-White-Red Card: 24 months, tied to the specified employer.
EU Blue Card: 24 months. After 21 of 24 months of employment, the holder can upgrade to Red-White-Red Card plus, which is valid for 3 years and removes the employer restriction.
After 5 years of continuous lawful settlement, holders can apply for long-term resident EU status.
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Country-specific differences in process
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The process is uniform across most third-country nationalities. EU/EEA/Swiss nationals do not need a permit. UK nationals post-Brexit are treated as third-country nationals for new arrivals. Turkish nationals have additional access rights under the EU-Turkey association law.
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Change of employer in Austria
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During the initial Red-White-Red Card period, a new application is required for the new employer. After upgrading to Red-White-Red Card plus (eligible after 21 of 24 months of employment), the holder has unrestricted labour market access and can change employers freely.
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Where the application is filed
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Either at the Austrian embassy or consulate in the candidate's country of residence, or directly at the Austrian residence authority (Landeshauptmann, Bezirkshauptmannschaft, or MA 35 in Vienna).
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Work permit restrictions
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EU, EEA, and Swiss nationals do not require a residence or work permit. They register their address within 4 months of arrival if staying longer than 3 months.
Non-EU/EEA/Swiss nationals require a residence and work permit for any stay longer than 6 months, and a Visa D for short-term assignments.
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Visa fees (2026)
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Schengen Visa C: €90 adults, €45 children 6-12. National Visa D: €100. Red-White-Red Card: €120 application + €20 granting + €20 personalization (€160 total). Job Seeker Visa: €120.
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Schengen Visa C processing time
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15 calendar days under Article 23 of the EU Visa Code, extendable to 45 days in complex cases.
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Can a Visa C or a Visa D be converted into a work permit?
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Schengen Visa C cannot be converted into a work permit. The Job Seeker Visa (a specific Visa D) can be converted into a Red-White-Red Card from within Austria on receipt of a qualifying job offer.
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Spousal work rights
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Spouses and dependents of Red-White-Red Card or EU Blue Card holders receive the Red-White-Red Card plus, which provides unrestricted access to the Austrian labour market.
Spouses can work for any Austrian employer in any role, employed or self-employed. No separate work permit needed.
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Termination and deregistration obligations
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On termination, the employer must deregister the employee with ÖGK via ELDA within 7 days, file final settlements, and notify the municipality. The residence permit itself remains valid until its expiry date; the holder typically has a grace period of around 3 months to secure new employment and apply for a new permit, or leave Austria.
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Termination notice requirement
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The work permit is not "cancelled" by the employer. The employer's role is to file the deregistration filings above and inform the residence authority of any material change in the employment relationship. The residence authority is responsible for permit validity decisions.
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Book a demo to see how Skuad helps with work permit documentation, contracts, payroll, and immigration support to ensure hires are legally authorized to work.
Things you must know to set up a payroll in Austria
To manage payroll and taxation in Austria, all you need is to be aware of some rules. The first thing you need to consider is whether you want to hire foreign professionals or locals.
If you are looking to take complete control over your payroll, you need to register, hire, and complete the incorporation process. You can set up a bank account in Austria in 4 weeks.
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Tax
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Explanation
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Annual taxable income
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Gross income
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Tax rate
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Up to €13,539
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0%
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€13,539 to €21,992
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20%
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€21,992 to €36,458
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30%
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€36,458 to €70,365
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40%
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€70,365 to €104,859
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48%
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€104,859 to €1,000,000
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50%
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Above €1,000,000
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55%
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Tax returns
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Tax returns have to be filed by April 30 of the following year (paper form) or the end of June of the following year (electronic filing) via FinanzOnline.
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Financial Year
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The fiscal year is the calendar year, from 1 January to 31 December.
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Corporate Tax
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At the level of the company, profits are taxed at the standard corporate income tax (CIT) rate of 23%, regardless of whether profits are retained or distributed.
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Withholding Tax (For Non-Residents)
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The following categories have tax withheld at 20% (or 25% if grossed up) of income.
- Employment income or directors’ fees
- Earnings from the practice of an art or a sport, from advice (commercial/ technical), or personnel leasing
- Income received for an intellectual property
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Payroll Tax
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Social security contributions include three types of insurance. This includes health, pension, accident, and unemployment insurance. All employees are compulsory members of these insurances.
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Sales tax
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A customer is required to pay 20% VAT on the net sales. Several services are zero-rated from VAT. These services include exports and some other services for foreign customers. VAT is reduced to 10% on a few products, such as basic food and printed material. VAT is reduced to 13% on cultural events, live animals, plants, domestic flights, athletic events, and ex-vineyard wine sales.
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Employers' and Employees' Social Security
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Social security categories
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Employer %
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Employee %
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Total %
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Sickness
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3.78
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3.87
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7.65
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Unemployment
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2.95
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2.95
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5.90
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Pension
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12.55
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10.25
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22.80
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Accident
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1.10
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0.00
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1.10
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Miscellaneous
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0.60
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1.00
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1.50
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Total
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20.98
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18.07
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39.05
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Public pension
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The state pension system is a pay-as-you-go scheme, financed by employer and employee contributions. These amount to 10.25% of earnings for employees and 12.55% for employer contributions.
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PEO
A PEO, also known as a Professional Employer Organization, is a firm to which small and medium-sized businesses (SMBs) outsource services. These services include filing of employer payroll tax, retirement vehicles (401(k)), safety and risk mitigation, human resource consultancy, processing of the payroll, employee medical benefits, workers' compensation insurance, training and development, practice and liability insurance for employees (EPLI), and workforce management technology.
The main difference between PEOs and EORs is the personalization of service.
PEO vs EOR (choose the one that best suits your business)
Choose PEO if you:
- Already have an Austrian entity
- Want to remain a legal employer
- Can wait 4-8 weeks for setup
- Need full control over employment
Choose EOR if you:
- Don't have an Austrian entity
- Want to hire immediately (3-7 days)
- Don't want to handle compliance
- Testing the Austrian market before committing
Read this detailed guide on PEO vs EOR and discover the key differences.
Hire in Austria without setting up an entity
Skuad supports you with the operational complexity of hiring in Austria. It helps you with Dienstvertrag contracts, ÖGK social insurance, BMVG (Federal Ministry of Defence) severance contributions, ELDA payroll reporting, work permits for non-EU hires, and Kollektivvertrag compliance, so your team focuses on the work, not the paperwork.
Book a demo to get your first Austria hire onboarded in weeks.
FAQs
1. What is an employer of record (EOR) in Austria?
An employer of record in Austria is a third-party entity that hires staff on your behalf under Austrian labor law. The EOR registers each employee with the Österreichische Gesundheitskasse (ÖGK), drafts contracts aligned with the Arbeitsverfassungsgesetz (Labour Constitution Act) and the relevant collective bargaining agreement.
2. Can a foreign company hire in Austria without setting up a local entity?
A foreign company can hire in Austria through an EOR without registering a GmbH or branch. The EOR acts as your legal employer and handles payroll, tax, social security, benefits, and compliance with local labor laws.
3. What compliance risks do foreign employers face when hiring in Austria?
The main risks are misapplying the relevant collective bargaining agreement (which sets pay terms for roughly 95% of Austrian workers), misclassifying staff between Dienstnehmer (employees) and Werkvertrag (independent contractors), and missing ÖGK or Finanzamt deadlines.
4. How quickly can an EOR onboard an employee in Austria?
Most EOR providers can onboard a new hire in one to three weeks once documentation is ready and the candidate is EU/EEA or already holds a Red-White-Red Card. Third-country nationals needing a fresh work permit can take six to twelve weeks.
About the author
HR and Immigration Lawyer, Global HR Operations
Martyna Krawczyk is an HR and Immigration Lawyer and an Associate in Payoneer Workforce Management(Formerly Skuad) Global HR Operations team. She earned an LPC LL.M. from the University of Law in the UK and holds an Associate CIPD certification. Martyna is Vice President of the Labour Law Association of Poland and was awarded the Wolters Legal Hackathon 2024. She specialises in international employment law, cross-border workforce compliance, and global immigration - key areas that reflect Skuad's core values.
