UK company employing in Austria: what changed after Brexit

Austrian employment law applies to work done in Austria regardless of where the business is headquartered, and that was true before 2020 as well. What Brexit changed is the status of British people. A UK passport no longer brings the EU right to live and work in Austria, so a British employee moving to Vienna is treated like any other non-EU national for immigration purposes.

The reverse is still easy. An EU or EEA citizen on a London team can move to Austria and work there without a permit. For many UK companies the first Austrian employee is exactly that person: an Austrian or other EU national who wants to go home and keep their job.

Nothing about Brexit affected how Austria taxes and insures employees. The person is registered with the Austrian health insurer, has wage tax withheld each month and gets the benefits of the collective agreement for their sector. A UK payroll run with PAYE deductions does not discharge any of that.

A practical consequence is that the employee’s pension, health cover and unemployment insurance all sit in the Austrian system from the first day. They receive no UK workplace pension through the arrangement, and benefits such as private medical cover, if you offer them, are extras on top of an already comprehensive public scheme. Explain this early, because candidates moving from a UK role often ask what happens to their existing pension contributions, and the honest answer is that the Austrian job starts a separate record.

Somebody has to be the Austrian employer. That party reports to ELDA, holds the wage-tax account that the tax office debits each month, and is registered for Kommunalsteuer with the municipality. UK firms usually pick one of three ways to arrange that.

• An Austrian GmbH. Minimum share capital is €10,000, with €5,000 paid in cash at formation, and the company exists once it is entered in the Firmenbuch. It suits a business planning a lasting team.
• An employer of record. The EOR holds the Austrian contract as legal employer and runs payroll, while the UK company manages the work. It suits one hire or a small group, or a market test.
• A contractor arrangement. Possible for genuinely independent professionals, but Austrian audits look at substance. A full-time person taking instructions from a UK manager is likely to be reclassified.

The choice usually turns on numbers and time horizon. A UK firm that expects ten people in Austria within two years has reasons to build its own company. One that wants to keep a single senior engineer after she moves home has fewer. Before signing with any provider, use a checklist such as the one in how to vet an EOR for Austria, and ask who exactly will sign the contract.

Whichever route you take, budget for the time it takes to set up properly. Forming and registering a company is the slower path, and the employer accounts that follow come before the first payroll. An EOR shortens that because the employer side already exists, but the collective agreement still has to be identified and the person registered before day one. The overview of what an EOR does in Austria explains which tasks move to the EOR and which stay with you.

A British template employment contract will not fit Austria without real changes. The biggest gap is in pay structure. The UK has a national minimum wage and pays salary in 12 instalments; Austria has no statutory minimum wage, sets minimum pay through collective agreements covering 98% of employees, and pays 14 times a year.

Probation is shorter. One month is the statutory maximum, and either party can end the employment at any point in that month without notice or reason. A three- or six-month probation clause copied from a UK contract is simply not effective beyond the first month.

Notice is longer and grows with service. An employer dismissing someone with under two years in the job owes six weeks; the period steps up to two months in year three and keeps climbing, reaching five months once the person is in their 26th year of service. By default the employment can only end on the last day of a calendar quarter, although many contracts add the 15th and the month-end as permitted dates. Going the other way, a resigning employee owes a single month, ending on a month-end, unless the contract asks for more.

• Paid leave: five weeks a year, or 25 days on a Monday-to-Friday pattern, rising to six weeks after 25 years of service.
• Working time: a standard day of 8 hours and week of 40, with ceilings of 12 and 60 and a 17-week average that may not pass 48.
• Sick pay: in year one an ill employee keeps full salary for up to six weeks and half salary for a further four, and the entitlement lengthens with service.
• Written terms: the Dienstzettel has to name, among other details, which health insurer the person is registered with and which MV-Kasse receives their severance contributions.

Two smaller differences catch British drafting habits. Fixed-term contracts are easy the first time, since a first fixed term needs no justification, but renewing one repeatedly without an objective reason such as parental-leave cover turns the chain into an open-ended job. And salaries described as covering all overtime, called all-in contracts in Austria, must state the base salary for normal hours in writing. If they do not, the usual market salary for the role is treated as the base, and the employer has to check over a period that the all-in pay really covers the hours worked.

Austrian employer on-costs are heavier than British ones and come from more places. Take a single white-collar employee in Vienna earning €60,000 in 2026: the employer’s total outlay comes to roughly €77,805. Roughly €12,545 of the difference is employer social security; the rest is the 1.53% severance fund contribution, the 3.7% family-fund levy with its 0.36% Vienna surcharge, 3% municipal payroll tax and a Vienna levy of €2 per employee per week.

There is no equivalent of the UK employer pension auto-enrolment contribution, because the state pension is funded through social security: employers pay 12.55% and employees 10.25% for pension in 2026. Severance works differently too. Instead of a lump sum on dismissal, the employer pays 1.53% of all pay into an Abfertigung neu fund every month from the second month.

Plan the cash flow for the months when the holiday bonus and Christmas bonus fall, since those months carry a double salary. With an EOR in the picture, budget for our service charge too, which begins at €599 a month for each person. Then convert to sterling at the rate your finance team uses rather than a fixed figure from an article.

On the employee side, the same €60,000 produces net pay of about €41,102 for a single person in Vienna. Paid out, that is roughly €2,865 for each of the ten ordinary months, while each of the two bonus payslips lands nearer €3,359, because the bonus payments are mostly taxed at a flat 6%. If you are matching a UK take-home figure for someone relocating, compare net to net rather than gross to gross.

A British employee relocating to Austria usually needs either the Red-White-Red Card or the EU Blue Card. Both are tied to a specific employer and job, and both are valid for 24 months on first issue.

The Blue Card requires a degree of at least three years, or equivalent ICT experience, a job that matches the qualification, and annual gross pay of €55,678 or more, counting special payments. The Red-White-Red Card has several streams. The stream for very highly qualified workers sets a bar of 70 points out of 100. Shortage-occupation and other key-worker applicants are scored out of 90 and have to reach 55; for the other key-worker stream there is also a pay test, €3,465 gross per month before special payments are added, which applies whatever the applicant’s age.

Applications can be lodged in Austria by the future employer rather than the candidate. The residence authority then hands the file to the AMS, which tests the labour-market criteria. The detailed 2026 permit guide walks through each stream. Do not promise a start date until the card is granted.

Two points help with expectations. After 21 months of employment within 24, the holder can move to the Red-White-Red Card plus, which gives free access to the labour market. On tax, Austria’s relocation relief, the Zuzugsbegünstigung, is limited to scientists and researchers and, in one form, to artists and athletes whose move is in the public interest, so a typical engineer or sales manager moving from the UK pays wage tax on the normal scale.

Many UK firms hire in Austria precisely so the person can work from home. Since 1 January 2025 the Telework Act governs this. Telework needs a written agreement covering the arrangement and its location, it must be regular rather than occasional, and either side can end it with one month’s notice for good reason.

On tax, the employer may pay a home-office allowance free of wage tax. The cap is €300 per year, worked out as €3 for each telework day, and only 100 days count. Accident insurance covers telework, though commutes are covered only for a narrow set of locations. Equipment, costs and data protection are worth settling in the same written agreement so nothing is left to assumption.

Make sure the UK side understands that the Austrian employee’s working-time limits still apply when they are at home. A habit of late calls with London on top of a full Vienna day can push someone past the daily ceiling without anyone noticing.

For a single hire through Employer of Record Austria, the order of events tends to be the same. Agree the role and salary, identify the collective agreement and grade, issue the contract, start any permit application, register the person through ELDA before day one, and run the first payroll in the month they start. The week-by-week EOR onboarding guide lays out the timing.

After that, the monthly payroll and returns run in the background, each employee’s annual payslip (L16) is filed for the previous year before February ends, and your UK managers handle the work itself. The main thing a British business has to keep doing is respecting the Austrian terms when it makes decisions about the role.