Austria has a distinctive compensation system that includes two additional monthly salary payments per year. These "13th" and "14th" month salaries are legally mandated through collective agreements and offer significant tax advantages for employees.
What are the 13th and 14th month salaries?
The Austrian system includes:
- 13th month salary (Urlaubsgeld): Holiday bonus paid before summer vacation, typically in June or July
- 14th month salary (Weihnachtsgeld): Christmas bonus paid in November or December
Legal basis
While not in the general labor code, these payments are mandated through collective agreements (Kollektivverträge) that cover approximately 98% of Austrian employees.
Payment amounts and timing
Standard payment structure
| Bonus | Typical amount | Payment timing |
|---|---|---|
| 13th month (Holiday) | 100% of monthly gross | June or July |
| 14th month (Christmas) | 100% of monthly gross | November or December |
Variations by industry
Some collective agreements specify different amounts:
- IT and consulting: Usually full monthly salary for both
- Retail: May be prorated based on service length
- Banking: Often includes additional performance components
Tax treatment advantages
The 13th and 14th month payments receive preferential tax treatment:
Regular vs. bonus taxation
| Income type | Tax rate | Social security |
|---|---|---|
| Regular monthly salary | Progressive (up to 55%) | Full contributions |
| 13th and 14th month | Flat 6% | Full contributions |
This flat 6% tax rate makes Austrian total compensation very attractive. An employee earning EUR 60,000 base effectively keeps more of their 13th and 14th month payments than their regular salary.
Ceiling on tax benefits
The preferential 6% rate applies up to one-sixth of annual salary. For most employees, this covers the full 13th and 14th month payments.
Calculating total annual compensation
When comparing Austrian salaries to other countries:
Example calculation
For a base salary of EUR 4,000/month:
| Component | Amount |
|---|---|
| 12 monthly salaries | EUR 48,000 |
| 13th month (holiday) | EUR 4,000 |
| 14th month (Christmas) | EUR 4,000 |
| Total annual gross | EUR 56,000 |
Salary comparisons
When Austrian job postings show "EUR 48,000" annual salary, this typically means 14 payments. Always clarify whether quoted figures are for 12 or 14 monthly payments.
Pro-rating for partial years
New employees
For employees joining mid-year:
- 13th month: Prorated based on months worked through June
- 14th month: Prorated based on months worked through November
Employees leaving
Upon termination:
- Proportional 13th and 14th month payments owed
- Calculated based on time worked in current bonus year
- Paid with final salary settlement
Example: Employee joins in April
| Bonus | Months worked | Payment |
|---|---|---|
| 13th month (June) | 3 months | 3/12 = 25% of monthly salary |
| 14th month (November) | 8 months | 8/12 = 67% of monthly salary |
Employer cost implications
Budget planning
When hiring in Austria, budget for 14 monthly payments:
| Gross monthly salary | Annual salary (14 months) | Employer costs (~30%) | Total annual cost |
|---|---|---|---|
| EUR 4,000 | EUR 56,000 | EUR 16,800 | EUR 72,800 |
| EUR 5,000 | EUR 70,000 | EUR 21,000 | EUR 91,000 |
| EUR 6,000 | EUR 84,000 | EUR 25,200 | EUR 109,200 |
Cash flow considerations
- Two months have double salary payments
- Budget for higher payroll in June and November/December
- Social security contributions also apply to bonus months
Collective agreement requirements
Finding the applicable agreement
Determine which collective agreement applies to your employees:
- Identify the industry sector
- Check the Austrian Chamber of Commerce (WKO) database
- Review specific 13th/14th month provisions
Common variations
| Industry | 13th month | 14th month |
|---|---|---|
| IT services | 100% monthly | 100% monthly |
| Retail (Handel) | 100% monthly | 100% monthly |
| Banking | 100% + variable | 100% monthly |
| Hospitality | May vary by service length | May vary by service length |
Comparison with German bonus practices
| Feature | Austria | Germany |
|---|---|---|
| Legal requirement | Yes (via collective agreements) | No |
| Tax treatment | 6% flat rate | Regular income tax |
| Standard amount | 2x monthly salary | 0.5-1x monthly (if any) |
| Payment timing | June + November/December | Varies |
Using an EOR for Austrian hiring
An Employer of Record like Virmondo EOR ensures:
- Correct collective agreement identification
- Proper 13th and 14th month calculations
- Compliant tax treatment
- Accurate pro-rating for partial years
Next steps
Ready to hire in Austria? Virmondo EOR includes all 14 monthly salary payments in our transparent pricing model.