Velocity Global’s International PEO (Professional Employer Organization) solution helps companies quickly and compliantly set up their business in Austria. In helping you bypass the costly and time-consuming entity establishment process, our PEO service ensures a streamlined, cost-effective transition into Austria.
When you enlist Velocity Global as your Austria PEO partner, we become your Employer of Record. We handle all the details to support your employees in Austria—from benefits and payroll to risk mitigation and compliance—while you retain complete control of your supported employees. By taking care of all the behind-the-scenes requirements of operating in Austria, we give you the ability to focus on running your business.
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Austria Fast Facts
Currency: Euro (€)
Population: 8.9 million
Economy: $407 billion
Top Sectors: Finance, consulting, tourism, luxury commodities, mechanical engineering, steel construction, chemical production, and vehicle manufacturing
- New Years Day
- Epiphany Day
- Easter Monday
- 1 May
- Ascension Day
- Whit Monday
- Corpus Christi
- National Holiday
- All Saints
- Immaculate Conception
- Christmas Day
- St. Stephen’s Day
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Hiring Considerations in Austria
Benefits of hiring in Austria:
- Austria is the 11th strongest economy in the world in terms of GDP (gross domestic product) per capita. As a member of the EU, Austria has access to a wide range of economically competitive trading partners. The country’s central location in Europe attracts investors drawn to its proximity to other EU economies.
- Austrian workers have a reputation for being highly educated and skilled. The country ranks 10th in the world in terms of education spending per student. The World Economic Forum (WEF) ranks Austria as the world’s 16th most skilled workforce and the second strongest vocational training system.
- Workers in Austria also possess a penchant for innovation. On a per-capita basis, Austria boasts the world’s fifth-most trademark applications, third-most international co-invention, and eighth-most patent applications.
Challenges when expanding into Austria:
- Austria prides itself on its economic and social partnership system, which plays a “strong and reconciliatory role in wage and price policies.” In other words, the Austrian government strongly legislates to protect workers. It is challenging for companies to comply with these highly-detailed employment laws.
- The WEF ranks Austria as the world’s second-most inflexible country for wage determination, meaning companies and employees must largely adhere to government standards for salaries. Additionally, out of 141 countries, the WEF ranked Austria 122nd in terms of internal labour mobility and 104th regarding the ease of hiring foreign labour.
- Companies who wish to employ non-Austrian workers while operating in Austria must adhere to the Employment of Foreign Nationals Act. This act promotes the hiring of Austrian nationals by creating strict standards for hiring foreign workers. Companies must invest a significant amount of time and research to ensure they comply with this regulation.
Cultural nuances and must-knows for doing business in Austria:
- Be patient when forming business relationships in Austria. The Austrian people value taking time to get to know their business partners. In terms of the speed of doing business, Austrians are less deal-focused and more prone to move at a deliberate, steady pace.
- Arrive at meetings on time, as Austrians strongly emphasize punctuality. While the Austrian people are friendly and hospitable, they also value respect and formality. Be aware of your Austrian business partners’ full titles and address them accordingly when appropriate.
- Avoid sensitive topics such as World War II or anything that Austrians might perceive as criticism. Make sure not to equate Austria with Germany—the two countries share a language, but have very different cultures. Avoid excessive compliments, as Austrians may find them uncomfortable.
- Dress formally. Austrians are serious about personal appearance, especially in the business world. Stay away from loud or gaudy clothing regardless of the circumstances. Austrians tend to dress in an understated, traditional manner.
- Avoid being overly blunt or direct in conversation. Similarly, expect Austrians to not always explicitly convey their thoughts. Austrians are tactful and discreet communicators and regard excessively candid conversation as uncouth.
Employment Contracts in Austria
Minimum wages and salaries:
- In Austria, wage refers to remuneration paid to manual workers, while a salary relates to the remuneration paid to white-collar workers.
- Minimum wage in Austria is 1500 € per month. There is no minimum salary for white-collar workers.
- Austrian law mandates that probationary periods in employment relationships be limited to one month.
- In the case of apprenticeships, however, probationary periods span the first three months
- Austrian employers commonly reward employees with bonus payments. The employer has full discretion when to issue or revoke a bonus.
- However, employers must not repeatedly offer bonuses to the point where they become expected by the employee. To avoid falling into a pattern where bonuses become expected, employers must explicitly express via writing that their bonus payments are voluntary each time they issue a bonus.
Termination and severance considerations:
- For employees on fixed-term contracts, employment automatically ends when the contract expires.
- If the employer and employee both agree to end the employment relationship, the Austrian government does not require a notice period. The government recommends written termination but will accept verbal termination as well.
- In cases of unilateral termination, employers are not required to provide employees with a reason for dismissal. Employers can terminate employees verbally, in writing, or by handing employees their employment papers.
- Employers must give at least six weeks of notice to white-collar employees and two weeks of notice to blue-collar employees. If an employer has entered into any collective agreements, works agreements, or employment contracts that stipulate longer notice periods, the employer must honor these agreements.
- Employers can dismiss employees immediately with valid reasons, such as “persistent neglect of duties.” If an employer dismisses an employee without just cause, the employee has the right to appeal to Austria’s labour and social security court.
Paid Time Off & Benefits
- Maternity leave in Austria begins eight weeks before birth and ends eight weeks after. Female employees on maternity leave receive a maternity allowance approximately equal to the average of her last 13 weeks of pay.
- Freelance contractors are also eligible for this maternity benefit.
- Parents can take unpaid parental leave until the child reaches the age of 24 months, as long as the parent taking leave lives in the same household as the child. Parents can choose from five childcare allowance plans while taking unpaid parental leave.
- Employees in Austria are guaranteed a minimum of five weeks paid leave each year. After 25 years of work, employees are guaranteed a minimum of six weeks paid annual leave. This leave policy applies to full-time workers, part-time workers, and minimally employed workers.
- Employees must obtain consent from employers regarding when they take their leave.
- Employers must continue to pay employees suffering from sickness, an industrial accident, or an occupational illness, as well as employees going through rest cure or convalescence leave. The length of paid leave depends primarily on the employee’s seniority and whether the employee is a white-collar or blue-collar worker.
- Once an employer has fulfilled its sick-pay obligations, the health insurance provider is responsible for paying an employee.
Average workweek hours:
- Regular working hours in Austria include an eight-hour workday and a 40-hour workweek.
- Many industries have collective agreements which shorten the regular workweek to 38 hours. Other collective agreements extend the regular workday to 10 hours over four days, enabling a long weekend.
- Collective agreements in specific industries, such as tourism and service, stipulate that certain weeks may include more or less than normal working hours as long as the yearly average is 40 hours per week.
- Employees log overtime hours for any time worked past the regular eight-hour workday or 40-hour workweek. Employers must pay an additional 50% in money or time balance for employees that work overtime.
- Employers can only ask employees to work overtime if the excess work does not interfere with the employer’s personal interests, such as childcare or personal appointments.
Choose Velocity Global
Expanding into Austria presents your business with an exciting new growth opportunity. But successfully tapping into this leading European economy demands expertise on requirements for hiring, payroll, tax, employee benefits, and more. That’s where Velocity Global comes in.
We help you legally and compliantly set up in Austria–with speed and efficiency. Our International PEO solution is 60% less expensive and 90% faster than establishing a foreign entity. By taking care of all the small details required to maintain compliance in Austria, we allow you to focus on the big-picture aspects of running your business. No matter how big your operation or your plans in Austria, we have the knowledge and experience to support you every step of the way.
Ready to grow your business in Austria? Reach out to Velocity Global today.
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