Austria has one of the world's most comprehensive collective agreement systems, covering approximately 98% of employees. These agreements (Kollektivverträge) set minimum standards for salaries, working hours, and benefits that employers must follow.
How collective agreements work
Legal framework
Collective agreements are negotiated between:
- Employer associations (Wirtschaftskammer)
- Trade unions (Gewerkschaften)
Once agreed, they become legally binding for all employers in the relevant sector.
Mandatory coverage
Unlike some countries where collective agreements only cover union members, Austrian agreements apply to all employees in the sector, regardless of union membership.
Finding your applicable agreement
Determine which agreement applies by:
- Identifying your industry sector
- Checking employer association membership
- Reviewing employee role classifications
- Consulting WKO (Wirtschaftskammer Österreich) database
Key industries and agreements
IT and software development
Applicable agreement: IT-Kollektivvertrag (since 2018)
| Category | Minimum salary 2026 |
|---|---|
| Entry level (ST1) | EUR 2,471/month |
| Junior developer (ST2) | EUR 2,808/month |
| Developer (ST3) | EUR 3,270/month |
| Senior developer (ST4) | EUR 3,779/month |
| Lead/architect (ST5) | EUR 4,396/month |
| Manager (ST6) | EUR 5,013/month |
Working conditions:
- 38.5-hour work week
- 25 days vacation minimum
- 13th and 14th month salaries
- Annual salary adjustments
IT salaries in practice typically exceed minimums by 20-50%. The collective agreement sets floors, not market rates.
Banking and finance
Applicable agreement: Bankenkollektivvertrag
| Position | Minimum salary 2026 |
|---|---|
| Entry level | EUR 2,650/month |
| Qualified staff | EUR 3,200/month |
| Specialists | EUR 3,800/month |
| Management | EUR 4,500/month+ |
Special provisions:
- 37-hour work week
- Additional vacation days after 5 years
- Enhanced pension contributions
- Performance bonus frameworks
Retail and commerce
Applicable agreement: Handelsangestellte Kollektivvertrag
| Position | Minimum salary 2026 |
|---|---|
| Sales assistant | EUR 1,945/month |
| Experienced sales | EUR 2,150/month |
| Department lead | EUR 2,450/month |
| Store manager | EUR 2,900/month |
Provisions:
- 38.5-hour work week
- Saturday work rules
- Shop opening hour regulations
- Commission structures
Manufacturing
Applicable agreement: Metallindustrie Kollektivvertrag
| Category | Minimum salary 2026 |
|---|---|
| Unskilled worker | EUR 2,200/month |
| Skilled worker | EUR 2,600/month |
| Technician | EUR 3,100/month |
| Engineer | EUR 3,600/month |
Provisions:
- 38.5-hour work week
- Shift premiums
- Hazard pay scales
- Overtime regulations
Standard collective agreement provisions
Working hours
Most agreements specify:
| Aspect | Common standard |
|---|---|
| Weekly hours | 38.5-40 hours |
| Daily maximum | 10 hours |
| Weekly maximum | 50 hours (with overtime) |
| Break requirements | 30 min after 6 hours |
Vacation entitlements
Minimum requirements by law and most agreements:
| Service length | Vacation days |
|---|---|
| Up to 25 years | 25 working days |
| Over 25 years | 30 working days |
Some agreements provide additional days for:
- Seniority milestones
- Night shift workers
- Specific job categories
13th and 14th month payments
All collective agreements include:
| Payment | Amount | Timing |
|---|---|---|
| 13th month (Urlaubsgeld) | 100% monthly salary | June/July |
| 14th month (Weihnachtsgeld) | 100% monthly salary | November/December |
Salary progression
Most agreements include automatic increases based on:
- Years in current salary group
- Years of overall service
- Annual inflation adjustments
Collective agreement compliance
Employer obligations
| Requirement | Consequence of violation |
|---|---|
| Pay at least minimum salary | Back pay plus penalties |
| Respect working hour limits | Fines, employee claims |
| Provide required vacation | Cannot be waived |
| Pay 13th/14th salaries | Must be paid even if terminated |
Common compliance issues
Job classification disputes
The most common disputes involve incorrect job classification. An employee performing ST4 work but paid at ST3 rates can claim back pay for the difference.
Proving compliance
Maintain documentation of:
- Job descriptions and actual duties
- Hours worked
- Salary history
- Vacation taken and accrued
Agreements vs. individual contracts
What can be improved
Individual contracts can always provide better terms:
- Higher salary
- More vacation
- Shorter working hours
- Additional benefits
What cannot be reduced
Individual contracts cannot go below collective agreement:
- Minimum salary for classification
- Maximum working hours
- Minimum vacation
- 13th and 14th month payments
Günstigkeitsprinzip
The "favorability principle" means the more favorable provision always applies. If your contract says 20 days vacation but the agreement says 25, the employee gets 25.
Navigating multiple agreements
When overlaps occur
Some companies operate across multiple sectors. Determining the applicable agreement:
- Check employer association membership
- Review main business activity
- Consider employee's specific work area
- Consult legal advice if unclear
Multi-activity employers
If operating in multiple sectors:
- Different agreements may apply to different employees
- Clear documentation essential
- Consistent classification within sectors
Working with an EOR
An Employer of Record navigates collective agreement complexity:
What Virmondo EOR handles
- Correct agreement identification
- Job classification assessment
- Salary minimum verification
- Annual adjustment implementation
- 13th/14th month processing
Benefits
- Guaranteed compliance
- Automatic updates for agreement changes
- Expert classification guidance
- Reduced administrative burden
Next steps
Need to hire in Austria with confidence in collective agreement compliance? Virmondo EOR handles all the complexity.