Employer of Record in Austria

Austria's employment framework is designed to balance operational needs with strong employee protections. Here's what you need to know:

Employment Types:

• Permanent (Indefinite): Ongoing employment with full statutory benefits and strong job security protections under the Austrian Labour Constitution Act and applicable collective agreements.

• Fixed-Term: Hired for a specific project or defined duration, with written contracts required. Repeated use of fixed-term contracts without objective justification may be challenged under Austrian law.

• Apprenticeships: Governed by the Vocational Training Act (Berufsausbildungsgesetz), combining workplace training with vocational school attendance under a structured dual-education system.

Probation Periods: Maximum 1 month for standard employment contracts, up to 3 months for apprenticeship contracts. Probation periods must be explicitly stated in the employment contract. Either party may terminate without cause or notice during the probationary period. The EOR ensures that all terms comply with Austrian labor law.

Working Hours & Overtime: In Austria, the standard workweek is 40 hours, with a maximum of 8 hours per day under the Working Time Act (Arbeitszeitgesetz). Collective agreements may provide for a standard workweek of 38.5 hours.

Employees must receive a minimum 11-hour rest period between working days and an uninterrupted 36-hour weekly rest period. For eligible employees, overtime is paid at a premium of 50% over standard wages, with a maximum of 12 hours per day and 60 hours per week including overtime. The EOR ensures that all overtime is calculated correctly and that employee work hours comply with local regulations.

Leave Entitlements

Payroll & Benefits: Wages are determined through collective bargaining agreements (Kollektivverträge). Atlas HXM manages payroll in EUR, social insurance contributions (employer and employee), mandatory 13th and 14th month salary payments, health insurance, and pension contributions. Supplemental benefits can include private health insurance, meal vouchers, transportation allowances, and professional development options.

Atlas HXM can help you manage these aspects and can help ensure that employees are supported and compliant with Austria's labor laws while businesses can focus on operations without administrative burdens.

Austria operates on a calendar-year tax system, running from January 1 to December 31. Employers must remit monthly wage tax (Lohnsteuer) and social insurance contributions to the relevant authorities by the 15th of the following month. Municipal tax (Kommunalsteuer) is also due by the 15th of the following month. The annual wage tax statement (Lohnzettel) must be submitted electronically to the Finanzamt by 28 February of the following year. Personal income tax returns are due by 30 April of the following year, or 30 June if filed electronically.

VAT & EOR Costs: Austria applies a standard VAT rate of 20% to most services, including EOR fees. Under the EU reverse charge mechanism, B2B EOR services provided to clients in another EU member state are generally not subject to Austrian VAT, with the client accounting for VAT in their own country. For non-EU clients, EOR service fees are generally not subject to Austrian VAT. Austrian-registered clients may reclaim input VAT on EOR service fees. Companies should consult a tax advisor to understand the specific VAT implications of their EOR arrangement in Austria.

Atlas HXM handles tax compliance, including progressive income tax (Lohnsteuer) calculations, social insurance contributions, preferential tax treatment for 13th and 14th month payments, year-end filings, and expatriate tax planning, ensuring businesses remain compliant with local laws while minimizing administrative burden.