A COMPLETE GUIDE [2026]
Hiring Employees
and Contractors
in Austria
Contractor ManagementAgent of RecordVirtual Employer of Record Employer of RecordFree consultation, no obligations.
Quick facts
Currency: Euro (EUR)
Minimum wage: No statutory minimum (set by CBAs)
Standard payroll frequency: Monthly (some CBAs
allow 14 payments/year)
Public holidays: 13 national public holidays
13th / 14th month salary: Common and often mandatory
under CBAs
TRUSTED BY LEADING BRANDS AND STARTUPS
TRUSTED BY LEADING BRANDS AND STARTUPS
Introduction to hiring in Austria
Introduction to hiring in Austria
Austria is a central European hub known for its highly skilled workforce, strong employee protections, stable political environment, and close integration with the European Union. Companies looking to hire employees across technology, manufacturing, life sciences, engineering, fintech, and professional services frequently look to Austria for multilingual talent, robust infrastructure, and predictable labor regulations.
Hiring in Austria comes with strict legal and administrative requirements, including written employment contracts, payroll tax withholding, mandatory social security contributions, collective bargaining agreements, and employee protections. Employers must carefully manage compliance with Austrian labor law, tax authorities, and EU-wide regulations.
This guide provides an executive overview of hiring in Austria in 2026, including Employer of Record (EOR) services, local entity employment, and contractor management.
Understanding employment in Austria
Employment relationships in Austria are shaped by statutory labor law and an extensive system of collective bargaining agreements (CBAs). While Austria does not have a universal statutory minimum wage, most employees are covered by CBAs that define minimum salary levels, working hours, overtime, bonuses, notice periods, and other benefits.
Austria’s labor market is known for strong worker protections, long-term employment relationships, and high union coverage. Collective agreements are negotiated at the industry level and can apply automatically to all employers operating within a certainsector, territory, and/or working group.
Austria’s social security system is comprehensive and compulsory for workers who exceed certain income thresholds. It is funded through payroll contributions shared between employers and employees and covers health insurance, pensions, unemployment insurance, workplace accidents, and family benefits.
Key legislation impacting employers includes:
- Austrian General Civil Code (ABGB)\
- Austrian Salaried Employees Act (Angestelltengesetz)
- Working Time Act (Arbeitszeitgesetz)
- Leave Act (Urlaubsgesetz)
- Equal Treatment Act (Gleichbehandlungsgesetz)
- Employee Protection Act (Arbeitnehmerschutzgesetz)
Employment contracts in Austria
Employment contracts in Austria typically include job title, duties, salary, working hours, place of work, notice periods, and reference to any applicable collective bargaining agreement. Most contracts also include a probationary period, which may last up to one month.
Written employment contracts are not strictly mandatory under Austrian law but are strongly recommended. However, employers must provide employees with a written statement of essential employment terms under the Employment Contract Law Adjustment Act (AVRA).
International employers must also comply with:
- Austrian tax law and payroll withholding obligations
- Social security registration with the Austrian Health Insurance Fund (ÖGK)
- EU General Data Protection Regulation (GDPR)
Clear documentation is critical, as CBAs may override individual contract terms if they are more favorable to the employee.
Legal & compliance in Austria
Working hours, leave, and termination
Working hours and overtime | The standard working week in Austria is typically 40 hours, although some CBAs may reduce this to 38 or 38.5 hours. Working time is regulated by the Working Time Act.
Employees must receive daily and weekly rest periods, including at least 11 consecutive hours of daily rest following their workday (unless reduced by CBA). |
|---|---|
Overtime | Overtime (typically work beyond 40 hours per week unless otherwise specified by a CBA) must generally be compensated with additional pay or time off in lieu. Such overtime hours are typically paid at a rate of 150% of regular pay, though CBAs or employment contracts may set higher rates. |
Leave entitlements | Austria provides generous statutory leave entitlements:
|
13th and 14th salary | Austria is well known for its 13th and 14th salary payments, commonly referred to as holiday and Christmas pay. These payments are typically required by CBAs and benefit from preferential tax treatment. |
Termination and severance pay |
|
Work permits and visas in Austria
EU/EEA and Swiss citizens can work freely in Austria. Non-EU nationals require a residence and work permit.
Permit types are determined by types of immigration, and include:
- Red-White-Red Card: For skilled workers, key personnel, and graduates
- Red-White-Red Card plus: Allows third-country nationals access to fixed-term settlements and unlimited labour market access as self-employed or an employed individuals.
- EU Blue Card: For highly qualified professionals
Applications are processed by Austrian immigration authorities. More information is available at https://www.migration.gv.at
EOR like HireGlobal can assist with work permit sponsorship, while contractors remain responsible for their own authorization.
An EOR like HireGlobal can assist with work permit sponsorship, while contractors remain responsible for their own authorization.
Payroll & compensation in Austria
Payroll, taxes, and contributions
Payroll management in Austria requires strict compliance with tax withholding, social security reporting, and monthly filings. Employers must register employees with Austrian authorities before employment begins.
Employer Payroll Obligations |
Approximate contribution rates (subject to annual caps):
Coverage includes health insurance, pension insurance, unemployment insurance, and accident insurance. |
|---|---|
Payroll Schedule | Payroll is typically processed monthly. In many industries, employees receive 14 payments per year due to bonus salaries. |
Payroll Systems | Employers must submit payroll data electronically and comply with reporting requirements set by Austrian tax and social security authorities. |
Benefits and compliance in Austria
Mandatory benefits:
- Paid annual leave
- Paid public holidays
- Statutory sick pay
- Maternity and parental leave
- Social security coverage
- Severance fund contributions
Optional benefits:
- Supplemental private pensions
- Private health insurance
- Flexible working arrangements
- Meal vouchers or commuting allowances
Compliance risks:
Non-compliance can result in penalties, back payments, and audits. Key risk areas can include:
- Misclassification of contractors
- Failure to apply the correct collective bargaining agreement
- Incorrect payroll tax or social security filings
Business structures & comparisons
Hiring options in Austria
1. Direct employment through a local entity
Establishing an Austrian entity allows full control over employment but requires company registration, tax filings, social security setup, and ongoing compliance.
This is best suited for companies with long-term hiring plans and larger teams.
2. Employer of Record (EOR)
An Employer of Record hires employees on your behalf in Austria while you manage day-to-day work. The EOR handles:
- Employment contracts
- Payroll and tax withholding
- Social security contributions
- Compliance with Austrian labor law
Many international companies choose an Employer of Record to hire employees in Austria quickly while avoiding local entity setup and ongoing compliance burdens. Providers like HireGlobal can expedite market entry and navigate compliance/legal requirements with ease.
3. Independent contractors
Contractors can be engaged for project-based work, but Austria strictly enforces worker classification rules. Misclassification may result in retroactive taxes and social security liabilities.
Contractor management platforms, Agent of Record (AOR) services, and newer solutions such as Virtual Employer of Record (V-EOR) providers help mitigate risk when working with independent contractors.
Comparing hiring options in Austria
| Factor | Contractor Management / Agent of Record | Virtual Employer of Record (V-EOR) | Employer of Record (EOR) | Local entity |
|---|---|---|---|---|
Setup time | 1–3 days | 1–3 days | 1–2 weeks | 3–6 months |
Compliance ownership | Use proven contracts or Agent of Record model. Compliance is worker-managed with oversight | Provider handles contracts and provides indemnification | Provider handles contracts | Company responsible |
Taxes & benefits | Managed by worker | Managed by worker | Fully managed by EOR | Company responsible |
Cost | Per project, subscription, or percentage of payout | Monthly per employee | Monthly fee per employee | High setup + ongoing admin |
Flexibility | Very high | Very high | High | Low |
Establishing a local entity or subsidiary
To establish an Austrian entity, companies must:
Register with the Austrian Commercial Register
Register for tax with the Ministry of Finance
Register employees with social security (ÖGK)
Set up compliant payroll systems
Implement compliant HR policies
This approach offers permanence but requires ongoing local compliance expertise.
Cost of hiring in Austria
Employer of Record (EOR):
Employer of Record Austria costs are charged as a $399 monthly fee per employee through HireGlobal, with other providers charging from $599+/worker depending on package and benefits, as well as 10–15%+ of salary.
Contractor management:
Hiring contractors in Austria comes at a lower cost compared to EOR, and can be billed per project, through a flat fee, or as a % markup on worker payments. Prices start at $19/worker/month through HireGlobal, with most providers charging upwards of $29 (55%+).
Local entity:
High upfront incorporation costs (costs vary) plus ongoing payroll and compliance administration. Full strategic control and most suitable for long-term investment and large-scale operations.
Key takeaways
- Austria offers a highly skilled workforce and stable regulatory environment.
- Collective bargaining agreements (CBAs) often play a central role in employment terms.
- Proper payroll compliance and social security registration are essential.
- EOR and contractor management models provide flexible alternatives to entity setup.
Sources
- Austrian Ministry of Finance
- Austrian Health Insurance Fund (ÖGK)
- Austrian Federal Chancellery
- Migration Austria
- Austrian Business Service Portal
This article is for informational purposes only and does not constitute legal or tax advice. This article is current as of the date of publication. Details may have changed since then. You should not act or refrain from acting based on this article without seeking legal or professional advice.
Employer of Record Austria:
Hire compliantly for just $399 with HireGlobal
Free consultation, no obligations.
Frequently asked questions
No. You can hire employees in Austria without setting up a local entity by using an Employer of Record (EOR). The EOR acts as the legal employer and manages employment contracts for international hiring, payroll, taxes, and compliance on your behalf. A local entity is only required if you want to employ workers directly. A provider like HireGlobal (EOR platform) can help you hire employees in Austria without the overhead or administrative hassle.
Employers in Austria must comply with Austrian labor laws and employment laws, applicable collective bargaining agreements, payroll tax withholding, and social security contributions. They are also responsible for providing statutory benefits such as paid leave, public holidays, sick pay, and parental leave.
Austrian law does not stipulate a single statutory national minimum wage. Instead, minimum wages are typically defined by collective agreements, which apply to most industries and roles. These agreements set legally binding wage floors that employers must follow.
Austrian employment law requires employers to withhold income tax from employee salaries and make mandatory employer and employee social security contributions. These contributions fund pensions, health insurance, unemployment insurance, and accident insurance, and are administered through Austria’s social insurance system.
Yes, but contractor relationships must be structured carefully. Misclassification can be a significant risk in Austria. Contractors must operate independently and manage their own taxes and social security. Using a contractor management platform can help reduce compliance risk.
Hire confidently and stay compliant with
HireGlobal Employer of Record Austria
With HireGlobal Employer of Record in Austria, you can hire quickly, pay compliantly,
and avoid the risks of going in alone.
Free consultation, no obligations.
TABLE OF CONTENTS
Free consultation, no obligations.