What an EOR does in Austria, from contract to final payslip

What an EOR does in Austria starts with a signature. In law, the person you pick is employed by the EOR, so its name goes on the Dienstvertrag (employment contract), on the registration with the social insurance system and on every payslip. Your own company never appears in the Firmenbuch (commercial register), never opens an employer account with the tax office and never picks a severance fund.

The day-to-day relationship runs the other way. Your manager sets the priorities, runs the Monday call, agrees holiday dates in practice and decides whether the person gets a raise next spring. The EOR turns those decisions into contract amendments, payroll entries and filings, and it tells you when a request collides with Austrian employment law, such as a wish to cut the notice period below the statutory scale.

That division is the reason companies use the arrangement at all. A software house with one engineer in Graz, or a medical device maker putting a sales lead in Linz, gets an Austrian employment relationship with full social insurance, without first building the employer machinery that normally stands behind one. If you want the overview of who we are before the detail, start at Employer of Record Austria.

Most of the employer’s work in Austria is deadline-driven and repeats every month, which is why it is the first thing an EOR absorbs. The rhythm is set by three bodies: the Österreichische Gesundheitskasse (ÖGK), which collects social insurance, the tax office, which collects wage tax and two employer levies, and the municipality where the workplace sits.

• Before the first working day: registration through ELDA, the mandatory electronic channel. Paper, email and phone are not accepted, and the registration has to be in before work starts.
• Every month: the gross-to-net calculation, the monthly contribution return (mBGM) to the ÖGK, and Lohnsteuer, the 3.7% Dienstgeberbeitrag (DB) and the regional DB surcharge to the tax office. All of them share one cut-off: a March payroll, for instance, has to be filed and paid by 15 April.
• Also monthly: the 3% Kommunalsteuer to the municipality, and in Vienna the employer levy of €2 per employee for each week begun.
• Every year: the Lohnzettel (form L16) for each employee via ELDA by the end of February, plus the annual Kommunalsteuer return by 31 March.

Missing the first step is expensive. Where an inspection finds someone working who was never registered, the ÖGK charges a contribution surcharge of €400 for the person plus €600 for the inspection, €1,000 in total, and a general late-report surcharge of €70 applies per breach in 2026. An EOR that registers people on time spares you that exposure, though the figures show why you should ask any provider how its start-day process works; our guide to vetting an EOR for Austria lists the questions.

Austria has no statutory minimum wage, so one of the first things an EOR settles is which Kollektivvertrag (collective agreement) covers the job. Collective agreements reach 98% of employees, and there are more than 800 of them. Each sets pay grades, and the grade fixes the floor below which the salary cannot fall.

The agreement also brings the two extra salaries. Neither the Urlaubszuschuss (holiday bonus) nor the Weihnachtsremuneration (Christmas bonus) is a statutory payment; both come from the collective agreement, which is why Austrian salaries are quoted as 14 instalments. Within the limits of the annual sixth, most employees pay only about 6% tax on them, so they matter a great deal to the person you hire. The EOR schedules both and applies the special social insurance rates to them. For a fuller explanation of grades and floors, read how collective agreements set minimum pay.

Statutory terms sit on top. Your hire gets 30 Werktage of annual leave, equal to 25 days off for someone on a Monday-to-Friday schedule, and 2026 adds 13 public holidays. Sick pay continues at full salary for six weeks in the first year of service, then at half pay for four more, before the ÖGK takes over with sickness benefit. The EOR tracks those balances and pays them out correctly.

Finally there is the written statement of terms, the Dienstzettel. Since 28 March 2024 it has to name, among other things, the employer’s seat, a short job description, how pay is made, the social insurance carrier and the Mitarbeitervorsorgekasse (severance fund). The EOR issues it as the employer, because only the employer can.

You keep everything that makes the job the job. Choosing the candidate, agreeing the salary above the collective agreement floor, defining the role, setting targets and deciding who the person reports to all remain your calls. So does the equipment, the software access and the culture they work in.

Some of your decisions need a written form under Austrian law, and the EOR supplies it. If the person works from home, a co-working space or a relative’s flat, the Telework Act in force since 1 January 2025 requires a written telework agreement naming the location. If you want one salary to cover all overtime, the base pay for normal hours must be stated in writing, and the employer has to check periodically that the all-in amount really covers the hours worked.

The EOR also needs facts that only you see. Overtime beyond 8 hours a day or 40 a week earns a 50% premium or time off at 1.5 hours per hour, so hours have to be reported. Sick days, leave taken and changes in the job all flow into payroll. A short monthly hand-over from your manager is usually enough. Overtime, unpaid leave and bonuses all change the monthly contribution return to the ÖGK as well as the payslip, so they need to reach the EOR before the month’s figures are filed.

What the EOR does not do is manage the person. It will not set their objectives or judge their work, and it will not decide on its own to end the contract. It will, however, tell you what Austrian law requires before you act on a decision you have made.

Take a white-collar employee in Vienna on €60,000 a year, single, paid 14 × €4,285.71 in 2026. Employer social insurance at 20.98% on regular pay and 20.48% on the two special payments comes to about €12,545. Add the 1.53% severance contribution (€918), DB at 3.7% (€2,220), the Vienna DB surcharge at 0.36% (€216), Kommunalsteuer at 3% (€1,800) and the Vienna weekly levy (€106).

The total employer cost is therefore about €77,805, roughly 29.7% above gross salary. The employee keeps about €41,102 net after their own social insurance and wage tax, which is around €2,865 in a normal month and about €3,359 in each of the two bonus months. Commercial payroll software may round a few euros differently, so treat these as approximate.

Adding our charge (it runs from €599 per employee per month) contributes €7,188 over twelve months and lifts the example to roughly €84,993, the figure worth comparing with the cost of founding and running a company of your own, which our EOR versus GmbH comparison works through.

An EOR suits a company that wants one, two or a handful of people in Austria and has no plan, or no plan yet, for a branch or subsidiary. Typical cases are a first sales hire for the Austrian and neighbouring markets, a specialist who has moved to Innsbruck for family reasons and wants to stay with you, or a research role near a university in Graz or Vienna.

It also helps when the timing is uncertain. Founding a GmbH means at least €10,000 of share capital, €5,000 of it paid in cash at formation, plus registration in the Firmenbuch, an ÖGK employer account, a tax number and a Kommunalsteuer registration with the municipality. That effort pays off for a team you are sure will grow. It is heavy for a single role you are still testing.

Some situations need extra thought whichever route you take. A candidate from outside the EU usually needs a Red-White-Red Card, which is tied to a specific employer and checked by the AMS, so raise the permit question before you make an offer. A senior hire on more than €4,620 a month may be asked to accept a non-compete, which Austrian law caps at one year and limits to the employer’s line of business. And if you already know you will employ twenty people in Austria within a year, compare the two routes on cost before you start.

Ending an Austrian employment relationship is a process with fixed steps, and the EOR runs it as the employer. During the first month, the maximum probation period, either side may end the contract at any time without notice or reason. After that the statutory notice applies: six weeks for the employer during the first two years, two months from the third year, rising to five months from the 26th year.

By default, employer notice can only expire at a quarter-end; a contract may add the 15th or the last day of any month as permitted end dates. The employee, by contrast, gives one month’s notice to the end of a month. If the business has a works council, each dismissal goes to that council first and it gets one week to react, and the dismissed employee then has two weeks to bring a challenge before the labour court.

There is no severance lump sum from the employer for contracts started since 2003. Instead, the 1.53% contributions paid from the second month of employment build a pot at the severance fund. If the employer ends the contract after three contribution years, the employee may take it as cash; otherwise it stays invested. The EOR de-registers the person through ELDA and issues the final payslip and documents.

Planning a start date rather than an exit? Our onboarding sequence from offer to first payslip walks through the opening weeks in order.