Employing in Austria: what employers ask us before a first hire, answered

1

How do you start employing someone in Austria?

Decide first who will be the legal employer: a GmbH of your own or an employer of record. Then confirm the role is genuine employment, place it in the right Kollektivvertrag (collective agreement) grade and put the terms in writing. A candidate without EU citizenship must hold a Red-White-Red Card or an EU Blue Card before starting. In 2026 the employer must register the person with the ÖGK (Austrian Health Insurance Fund) through ELDA before the first hour of work, then pay 14 salaries across the year.

2

What is the 2026 price tag of an Austrian employee?

Budget about €77,805 a year in 2026 when a Vienna hire earns €60,000 gross, roughly 29.7% above salary. Employer social insurance at 20.98% is the largest addition, followed by the 3.7% family-fund levy (DB), 3% municipal payroll tax (Kommunalsteuer) and 1.53% for the severance fund.

The salary arrives in 14 instalments of €4,285.71. Our monthly charge, from €599 per employee per month, brings the reference hire to about €84,993 a year in 2026.

3

How quickly can you hire in Austria without forming a GmbH?

Through an employer of record, the candidate, not the paperwork, usually fixes the start date. Someone leaving another Austrian employer owes one month’s notice by default in 2026, ending on a month-end. Non-EU candidates must first obtain a Red-White-Red Card or Blue Card, and the permit decision then sets the date. Registration with the ÖGK must be done before day one, and probation can last one month at most.

4

Must you form a company in Austria before hiring?

No. Under the EOR model, the provider holds the Austrian employment contract, runs payroll and registers the hire with social insurance, while you manage what they do each day. Forming a GmbH makes sense for a lasting team or when you need to trade in Austria. In 2026 the GmbH capital floor is €10,000, with half due in cash at the founding stage, a rule dating from 1 January 2024. Statutory employer costs are the same on both routes.

5

Are you hiring staff or engaging a contractor?

Look at how the work is done, because Austrian authorities ignore the label on the contract. Someone who takes instructions, works set hours and sits inside your team is an employee on a Dienstvertrag (employment contract). A freier Dienstvertrag (free service contract) or Werkvertrag (contract for work) only fits genuinely independent work. Joint payroll audits reach every employer every 3 to 5 years, and in 2026 an unregistered worker found on inspection costs a €1,000 surcharge.

6

What has to be in an Austrian contract of employment?

Every key term must be set down for the new hire, either in the contract or in a Dienstzettel (written statement of terms). Since 28 March 2024 that includes the job description, how notice works, overtime pay, probation, the social insurance carrier and the severance fund, and the list still applies in 2026. Probation is capped at one month. The standard week is 40 hours, at most 8 per day, with a 50% premium on overtime.

7

Which taxes and contributions apply?

In 2026 social insurance takes 20.98% of regular pay as the employer share and 18.07% as the employee share, up to €6,930 a month. The employer withholds Lohnsteuer (wage tax) on bands from 0% to 55%, and adds the 3.7% DB, the regional DZ surcharge (0.36% in Vienna), 3% Kommunalsteuer and 1.53% for the severance fund. Each month is paid and reported on the 15th of the next one at the latest, and the yearly L16 payslip goes in by the end of February.

8

Does Austrian law fix a minimum wage?

Not a statutory one. Pay floors are set by more than 800 collective agreements, reaching about 98% of the workforce in 2026, each with a minimum per job grade. Under the 2026 IT agreement, a skilled professional at entry level (grade ST1) gets at least €3,267 a month, paid 14 times, or €45,738 a year. The agreement also grants the 13th and 14th salaries.

9

How many days of paid holiday apply?

Five weeks a year in 2026: 30 Werktage (working days counted Monday to Saturday), which a Monday-to-Friday worker takes as 25 days. Six weeks apply once service reaches 25 years. In the first year the full entitlement applies once six months have passed. On top come 13 public holidays in 2026 and a paid week of care leave to look after a sick relative. Maternity protection and the fathers’ month are paid by the state, not the employer.

10

Who pays during sickness?

The employer keeps paying the salary. In 2026, someone still in their first year of service receives six weeks on full salary and then four on half salary in each work year. The full-pay period grows to eight weeks once service passes one year, to ten after 15 years and to twelve after 25, and the four half-pay weeks follow in every case. After that, the ÖGK pays Krankengeld (sickness benefit). White-collar and blue-collar staff have shared these rules since 2018.

11

Where do pension and insurance contributions go?

All social insurance is paid to the ÖGK, which passes each share to the right branch. In 2026 the pension branch takes the most: 12.55% paid by the employer plus 10.25% deducted from pay. Health takes 3.78% and 3.87%, unemployment 2.95% each, and accident insurance 1.10% from the employer alone. A further 1.53% of pay goes to a Betriebliche Vorsorgekasse (severance fund), building a pot that stays with the employee.

12

How does ending an employment contract work?

During the one-month probation either party may end it without notice. After that, employer notice in 2026 is six weeks for the first two years of service, rising to five months after 25 years. It normally ends on a quarter day unless the contract permits other dates. A works council, if there is one, hears of the dismissal first and gets one week to reply. The employee then has two weeks to contest it before the labour court.

13

May employees telework or live abroad?

Yes, with a written agreement. The Telework Act, in force from 1 January 2025, applies to work from home, a relative’s home or a co-working space, and either side can end the arrangement with one month’s notice for good reason. In 2026 a telework allowance of up to €3 a day for 100 days (€300) is tax-free. Staff who live in another country, or want to work from abroad for a while, raise tax and social security questions there, so clear them before they start.

14

Which jobs move from your desk to the EOR?

The EOR issues the Austrian contract and written terms, registers the hire with the ÖGK before day one and runs payroll for all 14 salaries. It withholds wage tax, pays contributions and levies by the 15th of each month, files the L16 each February and tracks leave, sick pay and notice. Your part is picking the person and running their daily work. For 2026, pricing runs from €599 per employee per month.