Why Hire in Austria
9M
Population
EUR 477B
GDP
12%
Tech Growth YoY
75%+
Multilingual Workforce
Austria offers a strategic Central European location, serving as a gateway between Western and Eastern European markets. Vienna consistently ranks #1 globally for quality of life, attracting top talent. The country boasts a highly educated, multilingual workforce and a growing tech ecosystem.
- Central European hub: Easy access to Germany, Switzerland, and Eastern Europe
- Growing tech ecosystem: Vienna is home to 1,000+ startups and major R&D centers
- Multilingual talent: 75%+ speak English; many speak German, English, and a third language
- Fast-track work permits: 81+ shortage professions qualify for expedited Red-White-Red Card
Austria offers 81+ shortage professions with fast-track work permits, including software developers, engineers, and data scientists. Source: AMS 2025
Collective Agreements: The Austrian Framework
Austria has near-universal collective bargaining coverage (98%). Collective Bargaining Agreements (CBAs, or Kollektivvertrage) set minimum salaries, working conditions, and benefits by industry. You must identify and follow the correct CBA for each employee.
| Industry CBA | Entry Level | Mid-Level | Senior | Notes |
|---|---|---|---|---|
| IT Services (UBIT) | EUR 2,800/mo | EUR 3,500/mo | EUR 4,500/mo | 14 payments |
| Metal Industry | EUR 2,600/mo | EUR 3,200/mo | EUR 4,200/mo | 14 payments |
| Commerce (Handel) | EUR 2,100/mo | EUR 2,600/mo | EUR 3,400/mo | 14 payments |
| Banking/Finance | EUR 3,000/mo | EUR 3,800/mo | EUR 5,000/mo | 14 payments |
You cannot pay below CBA minimums even if the employee agrees. CBA minimums are legally binding and enforced by labor authorities.
How to find your CBA: The WKO (Austrian Economic Chamber) maintains a database of all CBAs. Your industry classification determines which CBA applies. Virmondo EOR identifies the correct CBA for every employee we manage.
The 13th and 14th Salary: Austria's Mandatory Bonuses
Austria requires employers to pay 14 monthly salaries per year. The 13th salary (Urlaubsgeld) is paid with summer vacation, typically in June or July. The 14th salary (Weihnachtsgeld) is paid before Christmas, in November or December. These are mandatory under most CBAs.
| Payment | Timing | Calculation | Tax Rate |
|---|---|---|---|
| 13th Salary (Urlaubsgeld) | June/July | 1x monthly gross salary | 6% flat rate |
| 14th Salary (Weihnachtsgeld) | November/December | 1x monthly gross salary | 6% flat rate |
14
Payments/Year
6%
Bonus Tax Rate
vs 20-50% normal
~8.3%
Each Bonus
As % of annual
The 6% flat tax rate makes 13th/14th payments more valuable than equivalent monthly raises. A EUR 1,000 bonus costs much less in tax than EUR 1,000 added to monthly salary.
Example calculation: An employee with EUR 4,000 monthly gross salary receives EUR 4,000 x 14 = EUR 56,000 annual gross. The 13th and 14th payments are taxed at only 6%, making them highly tax-efficient.
Understanding Employment Costs in Austria
Austrian employer costs are higher than Germany (~30% vs ~21%) primarily due to the 13th/14th salary payments and additional contributions. Budget carefully when planning Austria hires.
| Contribution | Rate | Notes |
|---|---|---|
| Pension (Pensionsversicherung) | 12.55% | Mandatory for all employees |
| Health Insurance (Krankenversicherung) | 3.78% | Lower than Germany |
| Unemployment (Arbeitslosenversicherung) | 3.0% | |
| Accident Insurance (AUVA) | 1.1% | Covers workplace injuries |
| IESG (Insolvency Fund) | 0.2% | Protects employee claims |
| Chamber Contributions | ~0.4% | Wirtschaftskammer levy |
| 13th/14th Salary Impact | ~8.3% | Effective annual increase |
| Total | ~29-32% | Including 13th/14th impact |
EUR 50K
Base Salary
x14
Months
~EUR 65K
Total Cost
Including contributions
When budgeting for Austria, remember: Annual cost = Monthly salary x 14 x (1 + contribution rate). The 13th/14th payments significantly increase total cost.
Leave Entitlements in Austria
| Entitlement | Minimum | After 25 Years | Notes |
|---|---|---|---|
| Annual Vacation | 25 working days | 30 working days | Based on 5-day week |
| Sick Leave | 6-12 weeks full pay | 12 weeks | Depends on tenure; then 50% for 4 weeks |
| Public Holidays | 13 days | 13 days | National holidays |
| Maternity Leave | 16 weeks | 16 weeks | 8 weeks before + 8 weeks after |
| Parental Leave | Up to 2 years | Up to 2 years | Can be split between parents |
Vacation increases with service: 25 days for the first 25 years of total employment (across all employers), then 30 days (6 weeks). Unused vacation must be taken within 2 years.
Austria's 25-day minimum is more generous than Germany's 20 days. Combined with 13 public holidays, employees get significant time off.
Termination and Notice Periods
Austria has strict termination protection. Dismissals must be justified and follow specific notice requirements. Notice can only be given at month-end (or quarter-end in some cases).
| Employee Tenure | Employee Notice | Employer Notice |
|---|---|---|
| Probation (up to 1 month) | None | None |
| < 2 years | 1 month | 6 weeks |
| 2-5 years | 1 month | 2 months |
| 5-15 years | 1 month | 3 months |
| 15-25 years | 1 month | 4 months |
| 25+ years | 1 month | 5 months |
Notice must be given to end on the last day of a calendar month. Missing this deadline delays termination by a full month.
Severance (Abfertigung): Since 2003, Austria uses "Abfertigung Neu" where employers contribute 1.53% of gross salary to a severance fund. Employees access this at retirement or after certain qualifying events.
Work Permits for Non-EU Nationals
Austria uses the Red-White-Red Card system for skilled non-EU workers. The 81+ shortage professions list provides expedited processing for in-demand roles.
| Permit Type | Requirements | Processing Time | Validity |
|---|---|---|---|
| RWR Card (Skilled Workers) | Job offer, qualifications, points threshold | 6-8 weeks | 2 years, renewable |
| RWR Card (Shortage List) | Job in shortage occupation, lower points needed | 4-6 weeks | 2 years, renewable |
| EU Blue Card | Higher education, EUR 4,500+/mo salary | 8-12 weeks | 2 years, renewable |
| RWR Card Plus | After 2 years with RWR Card | 4 weeks | 3 years, open labor market |
- Software developers and engineers
- Data scientists and analysts
- Electrical engineers
- Mechanical engineers
- Healthcare professionals
The shortage list is updated annually. Check AMS (Public Employment Service) for the current list. Virmondo EOR handles all work permit applications.
5 Common Mistakes When Hiring in Austria
- Forgetting 13th/14th salary in cost calculations: Budgeting 12 months instead of 14 leads to 17% cost underestimates
- Ignoring CBA requirements: Paying below CBA minimums is illegal, even with employee consent
- Underestimating notice periods: Employer notice can be up to 5 months; plan ahead for transitions
- Wrong Abfertigung calculation: Forgetting the 1.53% employer contribution to the severance fund
- Missing notice deadline: Notice must end on month-end; missing this delays termination by a month
The most expensive mistake: forgetting 13th/14th payments. A EUR 60,000 salary actually costs EUR 70,000+ in base pay alone, before contributions.
How Virmondo EOR Simplifies Hiring in Austria
- CBA identification and compliance for every role
- 14-payment payroll with correct tax treatment
- Abfertigung fund contributions managed automatically
- Work permit applications (RWR Card, Blue Card)
- Local HR support in German and English
2-3 weeks
Time to Hire
€599/mo
Per Employee
100%
CBA Compliant
Austria's complexity (CBAs, 13th/14th, Abfertigung) makes it one of the hardest DACH countries for DIY hiring. An experienced EOR saves significant time and risk.