Social insurance in Austria: contributions, the state pension and the severance fund

Austrian social insurance is compulsory and run by public bodies, not chosen by the employer. For private-sector employees, the Österreichische Gesundheitskasse (ÖGK, Austrian Health Insurance Fund) collects every contribution: the employer’s share, the employee’s share, and several small levies that ride along with them. It then passes the pension, unemployment and accident portions on to the bodies that pay those benefits.

For the employee, the visible result is a single deduction line, or a short group of lines, on the monthly payslip. For the employer, it is one monthly return covering every person on payroll. Neither side needs to register separately with a pension carrier, a health insurer or an unemployment office, because ÖGK’s registration covers all of them at once.

The umbrella organisation for all the carriers is the Dachverband der österreichischen Sozialversicherungsträger, which publishes the annual figures on sozialversicherung.gv.at. An employer deals with none of that structure directly. It registers each employee, reports pay once a month and pays one amount to ÖGK.

For anyone coming from a system where health cover and pensions are bought from private providers, the main adjustment is that there is nothing to choose. There are no plans to compare, no enrolment windows and no opt-outs for an ordinary employee. The rate is the rate, and cover begins with the registration that must precede the first hour of work.

Pension insurance is by far the largest branch. Together, employer and employee pay 22.80% of regular pay, with 12.55% from the employer and 10.25% deducted from the employee. This is the branch that funds the state pension. At 22.80% it accounts for well over half of the combined 39.05%, so when a finance team asks where Austrian payroll money goes, the honest short answer is retirement.

Health insurance costs 7.65% in total, and here the employee pays marginally more: 3.87%, against the employer’s 3.78%. It pays for medical care and also for Krankengeld (sickness benefit), which takes over when the employer’s own duty to continue pay during illness runs out. Unemployment insurance adds 5.90%, split equally at 2.95% each, and accident insurance is 1.10%, paid by the employer alone.

Three smaller items complete the picture. The employer pays 0.10% to the insolvency fund, which protects wages if an employer fails. A housing promotion levy of 1.00% is shared equally. And the employee pays 0.50% to the Chamber of Labour, the statutory body that represents employees. Add every line together and the employer’s side of regular monthly pay reaches 20.98%, while the employee’s side reaches 18.07%.

Low earners pay less unemployment insurance. In 2026 an employee earning no more than €2,225 a month pays none at all. Between €2,225 and €2,427 the rate is 1%, between €2,427 and €2,630 it is 2%, and only above €2,630 does the full 2.95% apply. Those reductions are being scaled back in 2027, and the new rates depend on whether the employment already existed on 31 December 2026, so a payroll plan for next year should not assume the 2026 bands.

The two bonus salaries are charged at their own rates. As neither the WBF housing contribution nor the AK levy is charged on them, the rates on those two payments fall, to 20.48% on the business side and 17.07% on the worker’s. That is one of several reasons the twice-yearly bonuses are cheaper for both sides than the same amount paid as salary; the tax side is covered in our piece on holiday and Christmas pay.

Contributions stop at a ceiling, the Höchstbeitragsgrundlage. In 2026 it stands at €6,930 per month on salary and €13,860 per year on the bonuses. Someone earning €9,000 a month pays the same social insurance as someone earning €6,930, and so does their employer. The ceiling rises each year; from 1 January 2027 it will be €7,410 a month and €14,820 a year for special payments.

At the bottom end sits the marginal-employment threshold, €551.10 a month in 2026 and unchanged in 2027. It matters for small side jobs and student roles, but hardly ever for a professional hire, whose pay sits far above it.

Registration has to be done electronically, and it has to come before the first hour of work. The channel is ELDA, the electronic data exchange with the Austrian social insurance carriers; paper, email and phone registrations are not accepted. A worker found on the job without registration triggers a surcharge of €1,000 in total, being €400 charged for the worker plus €600 for the inspection itself.

After that, the rhythm is monthly. The employer reports each employee’s pay in the monthly contribution return, the mBGM, and pays what it owes by the following 15th; wage tax reaches the tax office on that very day. Late reports attract a surcharge of €70 per breach in 2026. After the year closes, the L16 annual payslip for each employee goes to the tax office through ELDA, with February as the deadline.

Every few years the work is checked. A joint payroll audit, carried out by either ÖGK or the tax authority’s auditors, examines social insurance, wage tax and the payroll levies together, and each employer can expect one every three to five years. The process behind the monthly return is described in our guide to the Austrian payroll process.

Austria replaced lump-sum severance with a funded system for every contract that began on or after 1 January 2003. Instead of paying a large amount when an employment ends, the employer pays 1.53% of all pay, special payments included, into a severance fund every month from the second month of employment. There is no ceiling on this contribution, so it is charged on a high salary in full.

Over time the amounts are modest but steady. A €60,000 salary generates €918 a year for the fund, so three years of employment put roughly €2,750 of contributions into the employee’s account, before any investment return. That is the point at which the cash-out right described below begins.

ÖGK collects the money with the other contributions and forwards it to the Betriebliche Vorsorgekasse (company severance fund) that the employer has chosen. The money belongs to the employee’s account there, not to the employer, and it follows the employee from job to job.

The chosen fund is not a private detail between employer and fund. Since the 2024 changes to the written terms of employment, the employee’s Dienstzettel must name it, together with the social insurance carrier. Our guide to the Austrian employment contract lists the other items those written terms must now include.

Whether the employee can take it out depends on how the job ends. After three contribution years, an employee whose employment is ended by the employer can take the balance as cash. Someone who resigns cannot; their balance simply stays invested in the fund. For an employer, this means a dismissal in Austria carries no severance bill beyond the notice period, a point explained in our article on dismissal rules in Austria.

Consider a salaried Vienna employee earning €60,000 gross, which arrives as 14 instalments of €4,285.71. For 2026 the figures work out as follows.

• Employer social insurance: about €12,545, combining the 20.98% charged on twelve salaries with the 20.48% charged on the two bonuses.
• Employee social insurance: about €10,756, at 18.07% and 17.07% respectively.
• Severance fund: €918 at 1.53%, paid by the employer.
• Other employer payroll levies outside social insurance: about €4,342, made up of the family-fund levy, its Vienna surcharge, the municipal tax and the Vienna employer levy.

The employer’s total cost comes to about €77,805, and the employee takes home about €41,102 after social insurance and wage tax. The full calculation, with every assumption stated, is in our line-by-line Vienna cost calculation. Compared with a US payroll, a large share of this replaces costs that American employers pay to insurers; our comparison of US and Austrian payroll costs goes through that side by side.

With Employer of Record Austria, the contributions above are calculated, reported and paid as part of the monthly payroll we run as the legal employer. What we charge for that work starts from €599 per employee per month; the fee details list what it covers.

The contributions are not abstract. During illness, the employer first continues full pay under the Entgeltfortzahlung rules, six weeks while service is under a year and up to twelve after 25 years, followed by four weeks at half pay. When that runs out, ÖGK pays sickness benefit from the health insurance branch. The rules on continued pay during illness give the full scale, including how the weeks reset with each new work year.

Accidents at work follow a separate track. The accident insurance branch, funded by the employer’s 1.10%, covers injuries at work, and the employer’s own duty to continue pay after a work accident is longer, at eight to ten weeks.

Maternity is funded the same way. For the eight weeks before an expected birth and the eight weeks after, (twelve where the birth is premature, multiple or by caesarean section), the employee may not work and the employer pays nothing. ÖGK pays maternity benefit, Wochengeld, based on recent net pay. Fathers taking the one-month Papamonat after a birth receive a state family-time bonus of €54.87 per day instead of salary.

Unemployment insurance pays out through the AMS, the public employment service, and the pension branch builds the employee’s state pension entitlement month by month. For an employer, none of these benefits is an extra cost; they are what the 20.98% buys.

That shapes how candidates read an offer. Health cover, sickness benefit and a pension base are already built into the payslip, so when an Austrian candidate compares two offers, the gross salary and the collective agreement grade carry most of the weight.