Planning to hire employees in Austria? Here’s a quick guide

Global companies hiring in Austria usually weigh three engagement routes. The first is setting up a GmbH, Austria’s equivalent of a Limited Liability Company (LLC). The second is engaging independent contractors directly. The third is partnering with a workforce management platform that supports employee onboarding, payroll, and other key employment aspects for you.

Austria’s pull for international employers is straightforward. Their workforce comprises many specialists engaged in manufacturing, food technology, professional services, etc. Additionally, employees of the European Union (EU), European Economic Area (EEA), and Switzerland do not need work permits. However, employees who are not members of this union must possess a red-white-red or EU card.

Below, we’ll walk through the hiring process in Austria in practice: where to find candidates, how to onboard them, and what employment regulations in Austria to take into account when planning.

How to hire in Austria

Three engagement options come up when global firms, like U.S. companies, want to hire in Austria.

1) Set up a GmbH (LLC) in Austria

A GmbH (Gesellschaft mit beschränkter Haftung) puts you in full control of hiring and workforce management in Austria. 

It includes managing director appointments, commercial register filings, tax registration at the Finanzamt, and ongoing corporate compliance. 

If you are committing to a long-term local team, setting up a local entity is the route. Otherwise, it’s a heavy lift for a small team size. 

2) Engage Selbständige (independent contractors)

Hiring independent contractors (Selbständige) keeps overhead light and works well for project-based scopes. However, Austrian law draws a hard employee-vs-contractor line, and a recent reform tightened scrutiny of “employee-like” freelancers (freie Dienstnehmer). 

If you get the classification wrong, you are looking at retroactive social insurance contributions, tax penalties, and back pay. 

It is worth reading up on contractor misclassification penalties before scaling a freelance bench. For ongoing engagements, a contractor management system helps draw the line cleanly.

3) Partner with a workforce management platform

Globally, the Employer of Record (EOR) is the standard route for hiring abroad without a local entity. Austria’s labor framework doesn’t fit the EOR model the same way most non-EU markets do.  

Austria’s labor framework regulates labor leasing under the Arbeitskräfteüberlassungsgesetz (AÜG), which makes a standard EOR setup harder to apply than in most non-EU markets.

The practical solution is a workforce management platform like Payoneer Workforce Management, which supports contracts, payroll, social insurance registration, and benefits administration on your behalf. 

The Netherlands EOR guide uses a similar non-EOR framing for cross-EU hiring.

Where to find employees in Austria

Austria’s hiring market is fragmented. Engaging local talent in Austria runs through three main channels, and most companies mix them.

1) Popular job boards in Austria

Recruiting employees in Austria usually starts on one or more of the following:

• Karriere.at
• StepStone Austria
• Willhaben.at
• DevJobs.at

2) Work with local recruitment agencies

For specialist or senior hires, local recruitment agencies can speed things up. Vienna has a deep bench of headhunters in tech, finance, and life sciences. 

Local agents also help when language matters, especially when negotiations run more smoothly in German. 

However, recruitment agencies typically charge a percentage of a candidate’s salary, so it may not be ideal if you’re planning on engaging a team with multiple roles.

3) Workforce management platform support

A workforce management platform covers more than payroll. It can help draft localized contracts, run background checks, and register the new hire with the Austrian Social Insurance (ÖGK) on your behalf. 

You stay in charge of screening and selection while the platform absorbs the compliance requirements. Giving you more time to focus on identifying the suitable candidates.

The employment regulations in Austria include written contracts, social insurance setup, severance fund enrollment, and Lohnsteuer calculations.

Onboarding employees in Austria

Before the new hire’s first day, you’ll need to:

1. Register the employee with the Österreichische Gesundheitskasse (ÖGK) for social insurance.
2. Set up payroll for Lohnsteuer (income tax) withholding through the Finanzamt.
3. Verify work authorization. EU, EEA, and Swiss nationals work freely. Third-country nationals need a Red-White-Red Card, EU Blue Card, or other applicable permit.
4. Collect identification, tax number, and bank details for the EUR payroll. 

Payoneer Workforce Management can help you streamline the onboarding process and key employment operations.

Key employment laws and requirements in Austria

Several legal layers shape what you can and can’t do as an employer in Austria. Here are the employment regulations in Austria worth planning around.

Employment contracts

The employment contracts need to be in German and English. 

The contracts typically include:

• Job title and description
• Start date (and end date for fixed-term contracts)
• Workplace location
• Working hours, including any flex arrangement
• Gross salary, including how it splits across 14 monthly installments
• Reference to the applicable Kollektivvertrag (collective bargaining agreement)
• Notice periods and probation length
• Annual leave entitlement

Austria has no statutory national minimum. Sectoral Collective Bargaining Agreements (CBAs) (Kollektivverträge) set wage floors industry by industry, with the majority of employees covered. The IT sector’s 2024 entry-level CBA, for instance, put the minimum at €2,102 per month.

Employment benefits

Austrian employees get a generous statutory package, most of it inside social insurance with extras from CBAs.

• 25 working days of paid annual leave (rising to 30 after 25 years on the same payroll).
• 14 federal public holidays. 
• Sick leave coverage of up to 26 weeks.
• Mutterschutz (maternity protection): eight weeks before and eight weeks after birth, with Wochengeld (maternity allowance) paid by ÖGK.
• Elternkarenz (parental leave) until the child reaches 22 months. However, it is unpaid at the employer level, but state-funded Elternzeitgeld is available.
• 13th and 14th salary (Sonderzahlungen) under most CBAs, paid in June and November.
• Public health insurance through ÖGK.
• Voluntary occupational pension (Pensionskasse) is available at many larger employers.

Working hours and holidays

The Arbeitszeitgesetz (Working Hours Act) governs working time across Austria:

• 40-hour standard workweek, often reduced to 38.5 by CBAs
• Typical daily window: 8 a.m. to 6 p.m.
• Overtime carries at least a 50% surcharge above the regular rate
• Anything that would push the week beyond 50 hours, the employee can decline

Central European working-time rules cluster around a similar framework. The Czech Republic hiring guide covers an adjacent labor-market reference if you’re scoping the broader region.

Further, Austria observes 14 federal public holidays:

• New Year’s Day
• Epiphany
• Easter Monday
• Labor Day
• Ascension Day
• Pentecost
• Corpus Christi
• Assumption of Mary
• National Day
• All Saints’ Day
• Immaculate Conception
• Christmas Eve (Optional)
• Christmas Day
• St Stephen’s Day 

Tax obligations

Two things sit on the employer’s plate every month in Austria:

1. Lohnsteuer (income tax) is progressive, running 0% to 55%. The employer withholds at source and remits to the Finanzamt.

2. Employees also see roughly 18% deducted for social insurance (health, pension, unemployment, accident).

On the employer side, total payroll-on-top costs land at roughly 30% of gross. 

The breakdown: 

Termination and severance

Probation caps at one month, with either side free to end the relationship without notice during that window. After probation, employer-initiated notice scales with tenure. Moreover, employees giving notice typically owe one month.

On severance pay, employers contribute 1.53% of the monthly gross into the Betriebliche Vorsorgekasse (corporate staff provision fund) rather than paying severance directly. The fund travels with the employee across jobs. 

After three years of contributions, employees can withdraw or roll over the balance, provided they didn’t quit voluntarily.

Explore Payoneer Workforce Management in Austria

Payoneer Workforce Management supports companies engaging Austrian talent without setting up a local entity. The platform supports:

• Localized employment contracts 
• Run payroll in Euros
• ÖGK social insurance registration
• Lohnsteuer withholding and employer contribution remittance
• Statutory and supplementary benefits administration
• Severance fund contributions to a Betriebliche Vorsorgekasse

Building teams elsewhere in Europe? Refer to our country-specific resources for Germany, the Czech Republic, and the Netherlands.

Bringing on contractors instead of full-time employees? The Agent of Record service handles cross-border engagement, paired with the contractor management system for invoicing and payments. 

Book a demo today.

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