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AUSTRIA
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Austria Payroll and EOR: Employment Contracts
Not every foreign visitor to Austria requires a visa. European Union (EU) and European Economic Area (EEA) nationals, for example, do not require a visa. All applicants from outside these areas, however, must apply in person at the nearest Austrian embassy or consulate general. Because Austria is part of Europe’s Schengen zone, all foreigners must apply for a Schengen visa, which is divided into different categories based on the applicant’s situation.
Work visas in Austria come in a variety of forms, including:
- The Red-White-Red Card is a 24-month visa that allows applicants to live in Austria. Employees, on the other hand, can only work for the employer specified in the application and must fit into a specific category.
- Six-month residence visa: An option for those looking to relocate to Austria temporarily for work.
- Students’ residence permit: After completing studies or relevant training, holders of student residence permits can renew the permit for another 12 months in order to find work or start a business.
- Jobseeker visa: This visa is only available to highly qualified individuals.
- The EU Blue Card, an alternative to the Red-White-Red Card, grants applicants the same work rights as Austrian citizens.
- Individuals visiting Austria for business purposes for less than six months may apply for a business visa to remain compliant. Visas are not required for visits of up to 90 days in countries with visa-free agreements.
PAID TIME OFF
Annual Vacation
Every employee in Austria is legally allowed to five weeks (25 days, based on a five-day work week) of paid leave (annual leave) per year, even if they work part-time or are self-employed (geringfügige Beschäftigung).
Sick
- The principle of continued remuneration ensures that employees’ remuneration will continue to be paid in the event of sickness, industrial accident, or occupational illness, as well as during rest cure and convalescence leave. How long one is paid depends primarily on seniority, and different regulations may apply to white-collar workers and manual workers.
- The health insurance provider provides sick pay after continued remuneration. The amount of sick pay is determined by the earnings in the previous month and the amount of continued remuneration paid. As an employee, you must notify your employer as soon as you become unable to work.
Maternity
Pregnant employees’ protection period (Mutterschutz) typically begins eight weeks before birth and ends eight weeks later. The employment relationship continues during the protection period, and the employee receives a maternity allowance (Wochengeld) in the amount of the average remuneration during the last 13 weeks before the complete employment prohibition. Since January 1, 2008, freelance contractors have also been entitled to maternity leave.
Paternity
In Austria, paternity leave is a legal allowance for parents to stay at home after the birth of a child for a maximum of 31 days in a row, unpaid.
Family
Mothers and fathers are entitled to parental leave (= release from work in exchange for wage/salary suspension) for a maximum of 24 months, provided the parent on parental leave lives in the same household as the child. The parental leave must last at least two months. The dismissal and termination protection expires four weeks after parental leave ends.
National Holidays
13 public holidays in Austria.
Other Paid Time Off
- After six months of continuous employment, the employer may agree to educational or study leave. The minimum and maximum periods are two months and one year, respectively. If education or study leave is taken in installments, each installment must last at least two months.
- If a family member living in the same household requires care, one may, under certain conditions, be granted time off work while continuing to be paid. One week’s leave is granted for caring responsibilities. If a child under the age of 12 becomes ill again and requires care, an additional week per calendar year is possible.
- Employees may take compassionate leave to care for critically ill children or be with dying relatives, or they may reduce or rearrange their working hours in such cases.
STATUTORY EMPLOYEE BENEFITS
Unemployment
In Austria, if an employee has worked for 52 weeks in the previous two years, they are eligible for unemployment benefits. Normally, they will receive 55% of your earnings for 20 weeks. In Austria, the contribution to unemployment benefits is 3% of monthly covered earnings. People with low incomes have a lower rate. The maximum monthly salary is €5,130. The minimum monthly earnings used to calculate contributions, on the other hand, are €438.05. The total benefit is 60% of the insured’s net earnings, including all supplements. With the family supplement, this rises to 80%.
Workers Compensation
The AUVA AUVA (Allgemeine Unfallversicherungsanstalt – the Austrian Workers’ Compensation Board) provides occupational risk insurance to over 3.1 million employees and 1.4 million students and pupils. It is primarily supported by employer contributions.
Social Security
- The maximum assessment basis (gross salary) for current payments is EUR 5,550 per month for both employer and employee. Special payments are taxed preferentially (employer at 20.73%, employee at 17.12%, for a total of 37.85%). The maximum assessment basis (gross) per year is EUR 11,100.
- There is also the possibility of family members co-insuring without making any additional contributions. An additional insurance contribution of 3.4% is collected, for example, when the co-insured person (a spouse, registered partner, or person running the household) does not raise a child/children living in the common household or has not done so for at least four years.
- Furthermore, the employer must pay the Family Burdens Equalisation Levy of 3.9%, the municipal payroll tax of 3% of monthly gross salaries and wages, and a public transportation levy of EUR 2 per week per employee in Vienna.
Retirement
The state pension system is a pay-as-you-go system funded by both employer and employee contributions. Employee contributions amount to 10.25% of earnings, while employer contributions amount to 12.55%. Individual benefits are computed based on a person’s 18 highest-paid years, length of insurance contributions, and retirement age. If contributions have been made for at least 45 years, benefits can amount to up to 80% of an individual’s average lifetime earnings (subject to a predefined cap). The legal retirement age for men is 65 and 60 for women, and it will be gradually raised to 65 between 2024 and 2033. Early retirement is possible at the age of 62, but there is a discount for each year of retirement before the age of 65.
Health
Austrian healthcare is primarily public, with the option of purchasing private health insurance. Most people obtain public health insurance by paying a portion of their salary, which is overseen by the Ministry of Social Affairs, Health, Care, and Consumer Protection. Healthcare, on the other hand, is free for those with low or no income.
PRIVATE EMPLOYEE BENEFITS
Workers Compensation
Private workers compensation is available in Austria.
Retirement
There are private retirement schemes available in Austria.
Health
Private healthcare is available in Austria.
Insurance
Private life insurance is available in Austria.
PERSONAL INCOME TAX
Tax Year
Calendar year.
Tax Tables
All Austrian residents are subject to Austrian income tax on their worldwide income, which includes earnings from trade or business, profession, employment, investments, and property. Non-residents are only taxed in Austria on income from specific sources. Non-residents must pay income tax on income earned in Austria at the standard rate (including a fictitious income increase of EUR 9,000).
Taxable Income | Rates of Taxes |
0 – 11 000 | 0% |
11 000 – 18 000 | 20% |
18 000 – 31 000 | 35% |
31 000 – 60 000 | 42% |
60 000 – 90 000 | 48% |
90 000 – 1 000 000 | 50% |
1 000 000 + | 55% |
Taxation Method
Progressive income tax method.
Double Taxation
Austria has several double tax agreements (DTA) with other countries.
Residence Requirements
A person is generally considered to be a resident upon the establishment of an abode or, at the very least, after a six-month stay in Austria. Nationality is not a criterion for determining residence or tax liability in and of itself; however, in cases of doubt, it may serve as an indicator of residence.
Payroll Calendars
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There are no predetermined dates on which employees must be paid.
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Weekly, Bi-weekly, fortnightly and monthly payrolls are acceptable.
Rebates & Tax Credits
Personal allowances are typically in the form of tax credits, or deductions from taxable income. Family allowances, on the other hand, are paid to the taxpayer in cash.
Health Insurance
Austrian healthcare is primarily public, with the option of purchasing private health insurance. Most people obtain public health insurance by paying a portion of their salary, which is overseen by the Ministry of Social Affairs, Health, Care, and Consumer Protection. Healthcare, on the other hand, is free for those with low or no income.
Unemployment
Unemployed persons who match the following criteria can receive one of two forms of Jobseeker’s Allowance:
- Must be at least 18 years old but under the state pension age; not be enrolled in full-time study; be available for employment and actively seeking job
- Employees’ National Insurance Contributions are the only ones that qualify for these benefits. Contribution-based If a person is jobless, capable of and available for employment, and actively seeking work, they can get Jobseeker’s Allowance for up to 182 days. The weekly maximum rate is £56.80 (age 16-24) and £71.70 (age 25-64). (age 25 or over). The contribution-based Job Seekers’ Allowance is only paid if the worker has made enough class 01 national insurance contributions in the previous two tax years.
- If a person does not make adequate national insurance contributions as an employee and has a low income, he or she is eligible for income-based job seekers’ allowance. The income-based allowance is £56.80 for singles under 25, £71.70 for singles over 25, £112.55 for couples aged 18 or over, £71.70 for lone parents aged 18 or over, and £56.80 for singles under 25. (lone parent under 18). Every two weeks, payment is made.
Social Security
- The maximum assessment basis (gross salary) for current payments is EUR 5,550 per month for both employer and employee. Special payments are taxed preferentially (employer at 20.73%, employee at 17.12%, for a total of 37.85%). The maximum assessment basis (gross) per year is EUR 11,100.
- There is also the possibility of family members co-insuring without making any additional contributions. An additional insurance contribution of 3.4% is collected, for example, when the co-insured person (a spouse, registered partner, or person running the household) does not raise a child/children living in the common household or has not done so for at least four years.
- Furthermore, the employer must pay the Family Burdens Equalisation Levy of 3.9%, the municipal payroll tax of 3% of monthly gross salaries and wages, and a public transportation levy of EUR 2 per week per employee in Vienna.
PAYROLL ELEMENTS
Income
Salary, earnings, bonuses, overtime pay, taxable benefits, allowances, and certain lump sum perks are examples of remuneration (revenue from employment). Profits or losses made by a company or trade. Income or profits derived from an individual’s status as a trust beneficiary.
Bonuses
There are no regulatory constraints on incentive systems, so employers can set the criteria for whatever bonus plans they like.
Allowances
On formal request, the government provides a monthly tax-free cash payment to children up to the age of 18, or up to the age of 24 if still in school, or handicapped (up to the age of 25 under certain conditions). In Austria, family allowance (Familienbeihilfe) is only granted if there is no foreign entitlement to child benefit. If the taxpayer is married for more than six months in the calendar year or the registered partner does not live permanently separate, the taxpayer’s pension income does not exceed EUR 19,930 per year, the spouse’s income does not exceed EUR 2,200 per year, and the taxpayer is not eligible for the sole earner credit, the retiree tax credit ranges between EUR 400 and EUR 764.
Benefits in Kind
N/A
Investment Income
Interest earned on (publicly traded) interest-bearing securities is taxed at a rate of 27.5%, whereas interest earned on bank deposits/savings is taxed at a rate of 25%. (interest from privately placed securities and private loans is taxed at the progressive income tax rate). The Austrian bank’s WHT deduction is deemed to satisfy the income tax in general (final or definitive taxation).
Domestic dividend earnings are definitively taxed for income tax purposes, with the corporation distributing the dividend deducting 27.5% WHT. Foreign dividend earnings paid to a domestic deposit account are subject to final taxation via the WHT deduction of 27.5%. Banks are only liable for WHT in this case if they are aware of the nature of the capital. Dividends paid to foreign deposit accounts must be reported on your tax return. Such earnings are subject to a special 27.5% tax rate.
Capital gains resulting from the sale of shares (including qualifying participations), securities, or other financial assets (e.g. securitised derivatives, certificates) in Austria are subject to 27.5% income tax as a final tax if the assets were acquired after 31 December 2010. (or 30 March 2012 for interest-bearing securities and securitised derivatives). Capital gains from the sale of securities or other financial assets purchased prior to the above-mentioned date (referred to as “grandfathered” assets) are generally tax-free. The grandfathering provisions do not apply to holdings in which the relevant person owned at least 1% of a company’s total issued capital at any point during the five-year period preceding April 1, 2012.
Retirement Funding
The state pension system is a pay-as-you-go system funded by both employer and employee contributions. Employee contributions amount to 10.25% of earnings, while employer contributions amount to 12.55%. Individual benefits are computed based on a person’s 18 highest-paid years, length of insurance contributions, and retirement age. If contributions have been made for at least 45 years, benefits can amount to up to 80% of an individual’s average lifetime earnings (subject to a predefined cap). The legal retirement age for men is 65 and 60 for women, and it will be gradually raised to 65 between 2024 and 2033. Early retirement is possible at the age of 62, but there is a discount for each year of retirement before the age of 65.
Health Insurance
Austrian healthcare is primarily public, with the option of purchasing private health insurance. Most people obtain public health insurance by paying a portion of their salary, which is overseen by the Ministry of Social Affairs, Health, Care, and Consumer Protection. Healthcare, on the other hand, is free for those with low or no income.
Risk Insurance
N/A
Taxable Income
All Austrian residents are subject to Austrian income tax on their worldwide income, which includes earnings from trade or business, profession, employment, investments, and property. Non-residents are only taxed in Austria on income from specific sources. Non-residents must pay income tax on income earned in Austria at the standard rate (including a fictitious income increase of EUR 9,000).
Allowable Deductions
N/A
PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS
Payroll Taxes
N/A
Unemployment
In Austria, if an employee has worked for 52 weeks in the previous two years, they are eligible for unemployment benefits. Normally, they will receive 55% of your earnings for 20 weeks. In Austria, the contribution to unemployment benefits is 3% of monthly covered earnings. People with low incomes have a lower rate. The maximum monthly salary is €5,130. The minimum monthly earnings used to calculate contributions, on the other hand, are €438.05. The total benefit is 60% of the insured’s net earnings, including all supplements. With the family supplement, this rises to 80%.
Social Security
The maximum assessment basis (gross salary) for current payments is EUR 5,550 per month for both employer and employee. Special payments are taxed preferentially (employer at 20.73%, employee at 17.12%, for a total of 37.85%). The maximum assessment basis (gross) per year is EUR 11,100. There is also the possibility of family members co-insuring without making any additional contributions. An additional insurance contribution of 3.4% is collected, for example, when the co-insured person (a spouse, registered partner, or person running the household) does not raise a child/children living in the common household or has not done so for at least four years. Furthermore, the employer must pay the Family Burdens Equalisation Levy of 3.9%, the municipal payroll tax of 3% of monthly gross salaries and wages, and a public transportation levy of EUR 2 per week per employee in Vienna.
Workers Compensation
The AUVA AUVA (Allgemeine Unfallversicherungsanstalt – the Austrian Workers’ Compensation Board) provides occupational risk insurance to over 3.1 million employees and 1.4 million students and pupils. It is primarily supported by employer contributions.
ADMINISTRATION
Income
All Austrian residents are subject to Austrian income tax on their worldwide income, which includes earnings from trade or business, profession, employment, investments, and property. Non-residents are only taxed in Austria on income from specific sources. Non-residents must pay income tax on income earned in Austria at the standard rate (including a fictitious income increase of EUR 9,000).
Payroll Taxes
N/A
Unemployment
In Austria, if an employee has worked for 52 weeks in the previous two years, they are eligible for unemployment benefits. Normally, they will receive 55% of your earnings for 20 weeks. In Austria, the contribution to unemployment benefits is 3% of monthly covered earnings. People with low incomes have a lower rate. The maximum monthly salary is €5,130. The minimum monthly earnings used to calculate contributions, on the other hand, are €438.05. The total benefit is 60% of the insured’s net earnings, including all supplements. With the family supplement, this rises to 80%.
Social Security
The maximum assessment basis (gross salary) for current payments is EUR 5,550 per month for both employer and employee. Special payments are taxed preferentially (employer at 20.73%, employee at 17.12%, for a total of 37.85%). The maximum assessment basis (gross) per year is EUR 11,100. There is also the possibility of family members co-insuring without making any additional contributions. An additional insurance contribution of 3.4% is collected, for example, when the co-insured person (a spouse, registered partner, or person running the household) does not raise a child/children living in the common household or has not done so for at least four years. Furthermore, the employer must pay the Family Burdens Equalisation Levy of 3.9%, the municipal payroll tax of 3% of monthly gross salaries and wages, and a public transportation levy of EUR 2 per week per employee in Vienna.
Workers Compensation
The AUVA AUVA (Allgemeine Unfallversicherungsanstalt – the Austrian Workers’ Compensation Board) provides occupational risk insurance to over 3.1 million employees and 1.4 million students and pupils. It is primarily supported by employer contributions.
Statutory Benefits
Statutory benefits in the UK include time off for the 9 national public holidays and 5.6 weeks of holiday.
Employee Benefits
All employees are entitled to time off, including 9 paid public holidays.
LEGISLATION
- Gesetz zu kollektivvertraglichen Regelungen (Amtsblatt Nr. 22/1974, 71/2013, letzte Ergänzung 71/2013) / Collective Labour Relations Act (Official Gazette No. 22/1974, last amended by 71/2013)
- Gesetz zur Vereinheitlichung des Arbeitsvertragsrechts (Amtsblatt Nr. 459/1993, letzte Ergänzung 138/2013) / Employment Contract Law Harmonization Act (Official Gazette No. 459/1993, last amended by 138/2013)
- Grundsatzvereinbarung zu Mindestlöhnen von 1.000 Euro, 2007 / General Agreement on a Minimum Wage of 1,000 Euro, 2007
- Kollektivvertrag der Sozialwirtschaft Österreich 2014
- Mindestlöhne für Sozialdienste M 5/2005/XXII/96/3 / Minimum Wage rates for Social Services M 5/2005/XXII/96/3
- Angestelltengesetz (Amtsblatt Nr. 292/1921, letzte Ergänzung 58/2010) / White-Collar Employees Act (Official Gazette No. 292/1921, last amended by 58/2010)
STATUTORY BODIES
Tax Authority Austria
