Non-compete in Austria: the pay threshold, inventions and IP

A post-employment restraint, the Konkurrenzklausel (non-compete clause), is void under § 2c AVRAG if the employee’s last monthly pay before leaving is €4,620 gross or less. That is the 2026 figure. Below the line the clause simply has no effect, so the employee is free to join a competitor the day after leaving.

The threshold is not a number someone picked. The statute sets it at 20 times the daily maximum contribution base, and the daily base for 2026 is €231. Because the ceiling is revalued each January, the non-compete floor moves with it, so a clause that worked for a borderline earner one year can be dead the next if the salary has not kept pace.

Two details catch foreign employers. First, the test looks at the final month’s pay rather than the annual package, so the two special payments (holiday and Christmas bonus) play no part in it. Second, it is gross pay that counts. A hire on €60,000 a year, paid as 14 instalments of €4,285.71, sits below the 2026 line. A clause in that person’s contract would not bind them at all, however carefully it was worded.

For a team you are building through Employer of Record Austria, the practical step is to run each salary against the threshold before the contract goes out. Below it, leave the restraint out and put the effort into confidentiality and IP terms instead.

Plenty of skilled roles in Austria pay less per month than people abroad expect, because the annual figure is split into 14 payments. That split pushes monthly pay down and makes the non-compete floor bite more often than a foreign HR team assumes.

The 2026 IT collective agreement shows how close it gets. Its ST2 grade has a standard-level minimum of €4,611 a month, nine euros short of the threshold. An ST1 skilled professional at standard level has a floor of €3,954. Only at the LT grade, with a standard-level minimum of €6,059, does the collective agreement floor itself sit clearly above the line. Actual salaries are often higher than these minimums, but the grid is a useful reality check.

• Annual offer of €60,000: 14 × €4,285.71, below the 2026 threshold, so no restraint.
• IT grade ST2 at the minimum: €4,611 a month, still below.
• IT grade LT at the minimum: €6,059 a month, above, so a restraint can be drafted within the limits.

Salary changes during employment matter too, because the test looks at the last month before departure. A hire who starts below the line and is promoted above it may end up bound by a clause that looked pointless at signing. The reverse also happens after a cut to part-time hours. The contribution ceiling rises again from 1 January 2027, to €247 a day, so the threshold will move up with it.

Above the threshold a restraint can be enforceable, but only inside three statutory fences. Draft each one deliberately rather than relying on a judge to read the clause generously.

• Time. One year after the employment ends is the maximum. Longer periods are not allowed for ordinary employees.
• Scope. The restraint may only cover activity in the employer’s own line of business. A blanket ban on working for any technology company, for example, reaches well beyond that.
• Penalty. If the contract fixes a contractual penalty for breach, it may not exceed six net monthly salaries. Write the cap into the clause itself.

Notice the word net in the penalty rule. Someone paid €5,000 gross a month takes home far less after social security and wage tax, so the cap is lower than a quick glance at the payslip suggests. Work it out from the net figure when you set the amount.

Loose wording helps nobody here. Name the business line in concrete terms, give the geographic and time limits in plain words, and avoid catch-all phrases that a judge could read as an attempt to stop someone working in their profession at all.

A non-compete is unenforceable when the employer terminates by notice, unless the employee gave serious cause for the dismissal. In practice that leaves the clause doing most of its work where the employee resigns.

This shapes planning for any business that might restructure. If a client decides to scale back an Austrian team and the employer gives notice, the restraints attached to those roles stop mattering on the same day. Staff who leave in that way are free to join a competitor straight away.

Termination itself follows the Austrian notice table, which runs from six weeks in the first two years up to five months after 25 years, normally to a quarter-end. The guide to Austrian notice and dismissal rules covers those periods; for this topic the point is simpler. If losing a restraint on dismissal would hurt, the protection has to come from somewhere else: confidentiality duties, clear ownership of work product and good handover practice.

One option some employers consider is paying for the restraint period voluntarily, so the departing employee has a reason to keep to it even where the law would not force them. That is a commercial choice, and it should be costed honestly against the risk it is meant to cover. For most roles below senior level the money is better spent on making sure knowledge is documented and shared while the person is still on the payroll.

Under the Patent Act (Patentgesetz, §§ 6 to 19) an employer acquires a service invention only if there is a written agreement to that effect, or a clause in the applicable Kollektivvertrag (collective agreement). Without one, the invention stays with the employee who made it.

The written agreement does not make the invention free. Where the employer takes it, the inventor is owed reasonable compensation. The statute leaves the amount open rather than setting a formula, so the contract should explain how compensation will be assessed and paid instead of pretending none is due.

For engineering, product and research hires, put the invention clause in the employment contract from day one rather than adding it after a breakthrough. Asking someone to sign over an idea they have already had invites a negotiation the employer may not win.

• State in writing which inventions the employer may claim, linked to the employee’s duties.
• Set out how the employee reports an invention and how quickly the employer must decide whether to take it.
• Describe how reasonable compensation will be calculated, and when it is paid.
• Check whether the collective agreement for the role already contains an inventions clause, and make the contract consistent with it.

Software is the easy case. Under § 40b of the Copyright Act (UrhG), the employer automatically receives an unlimited right to use computer programs that staff write in the course of their duties, unless the parties agree otherwise. No extra signature is needed for that default to apply.

Everything else is less automatic. Design files, documentation, marketing copy, training videos and research writing are copyright works that need a contractual grant before the employer can use them freely. A contract that mentions code but is silent on everything else leaves gaps in exactly the material a growing company tends to reuse.

Hiring through an employer of record adds a second link in the chain. Rights first land with whoever holds the employment contract, which in that model is the EOR rather than your business. The service agreement between your business and the EOR should say plainly that those rights pass on to you. It is one of the questions worth asking when you are vetting an EOR for Austria, alongside how invention compensation is handled if one of your engineers files something patentable.

Because many Austrian hires will fall below the non-compete threshold, the confidentiality clause often carries more weight than the restraint. Write it with that in mind: define what counts as confidential, say how long the duty lasts, and cover the return of devices, documents and access credentials on the last day.

Do not try to use confidentiality as a disguised non-compete. A clause so broad that it effectively bars someone from working in their field invites the same scrutiny as a restraint and is unlikely to be read in the employer’s favour.

Since 28 March 2024 the rules on written terms also give employees a right to take other jobs, unless the second job is incompatible with the first. An employer can still object to work for a direct competitor or to hours that would breach working-time limits, but a flat ban on any outside work no longer fits. The article on the Dienstzettel and Austrian contracts sets out what else the written statement must now contain.

Before an offer letter goes out, run through these points with whoever is preparing the contract. Most problems we see come from a template written for another market being dropped onto an Austrian salary.

• Compare the monthly gross salary with €4,620. If it is at or below, drop the non-compete rather than leaving a void clause in the contract.
• If it is above, limit the restraint to one year and to the employer’s actual line of business.
• Cap any penalty at six net monthly salaries, calculated on net pay.
• Remember the clause will not survive an employer dismissal unless the employee gave serious cause.
• Add a written service-invention clause with a compensation mechanism, checked against the collective agreement.
• Grant rights in non-software work such as designs, documents and content expressly.
• Make sure the service agreement passes all IP rights from the legal employer through to your business.
• Replace any blanket ban on second jobs with a clause tied to incompatibility.

Our EOR services in Austria include preparing the employment contract on these lines, so the clauses you rely on are ones that work at the salary you are offering.