Fill in the form below to get the know how to future proof your contingent workforce program today!
overview
Austria
CurrencyEuro (EUR)
CapitalVienna
Official languageGerman
Time zoneGMT +1
Working hours40 hours
Public holidays13 Days (2026)
Payroll frequencyMonthly
Minimum monthly salary1700 EUR
Date formatdd/mm/yyyy
Employer of record in Austria
Hiring employees in Austria typically requires a lot of time, work, and resources. In most circumstances, you’ll need to set up a local legal entity through which to hire workers, which can be a time-consuming process. There are also various expenses to consider, such as the cost of incorporation, payroll taxes, social security contributions, and more.
Plus, once you’ve found the right people for the job; you’ll need to ensure your employment contracts and practices are in line with EU and Austrian labour laws — which are constantly changing. There is an easier way: hiring talent through an employer of record, or EoR.
What is an employer of record?
An employer of record (EoR) is an organisation that hires employees on behalf of other organisations. When you engage workers through an EoR, the EoR becomes those workers’ official employer for legal and tax purposes. They also typically provide HR services like payroll, benefits administration, and onboarding support.
Using an employer of record in Austria
When you use an employer of record in Austria, the EoR will handle things like payroll, taxes, social security, benefits, and labour law compliance entirely on your behalf. This enables businesses to easily and quickly hire Austrian talent without worrying about compliance with Austrian labour laws and regulations or getting tied up in the legal and administrative side of hiring.
Working with an EoR can also be beneficial for a company’s workers since they benefit from a smooth and compliant HR experience that’s in line with their expectations. The EoR will ensure employees have access to the statutory benefits they’re entitled to, and act as their point of contact for any HR questions or concerns.
Restrictions on employer of record providers in Austria
In Austria, an employer of record (EoR) is often referred to as an ‘Arbeitnehmerüberlassung’ or ‘Überlassung von Arbeitskräften’, which translates to ‘labour leasing’ or ‘employee leasing’. There are some specific rules that apply to employers of record in Austria that you should be aware of before engaging one.
Companies engaging in labour leasing must have a specific licence issued by the Public Employment Service Austria (Arbeitsmarktservice Österreich or AMS). They must also maintain specific records and comply with reporting requirements. Businesses looking to work with an employer of record in Austria should ensure any provider they choose meets these legal requirements.
Hiring in Austria without an employer of record
Whether or not you use an employer of record to hire talent in Austria, it’s a good idea to have an understanding of the labour laws, regulations, and standard practices that apply there. This allows you to both ensure your operations are compliant and give your Austrian team the employee experience they expect and deserve. Read on for everything you need to know about hiring employees in Austria — with or without an EoR.
Hiring in Austria
Like all countries, Austria has its own set of rules, regulations, and norms that apply to employment. Companies hiring in Austria should familiarise themselves with the basics before engaging employees.
Labour laws in Austria
Austria has strong labour laws that protect workers and set limits on what employers can do. Some of the most important pieces of legislation you should be aware of before hiring in Austria include:
- The Employees Act (Angestelltengesetz).
- The Temporary Employment Act (Arbeitskräfteüberlassungsgesetz).
- The Working Time Act (Arbeitszeitgesetz).
- The Holiday Act (Urlaubsgesetz).
- The Employment Protection Act (Arbeitnehmerschutzgesetz).
Trade unions and collective bargaining agreements in Austria
Many employees in Austria are trade union members, and many are covered by collective bargaining agreements made between groups of employers and employees. These agreements may apply across an entire industry and set the rules on things like working hours, minimum wages, and job categories. It’s important for employers hiring in Austria to understand the collective agreements that apply to their employees so they can ensure compliance.
Employment contracts and agreements in Austria
There are three main types of contracts that can be used when hiring in Austria, based on the type of engagement:
- Regular employment contracts (Arbeitsvertrag): For full-time or part-time employees.
- Freelance contracts (Freier Dienstvertrag): For independent contractors.
- Service exchange contracts (Werkverträge): For the completion of a specific task.
Employment contracts in Austria can be either written or verbal. If no written contract is provided, employees and independent contractors must receive a statement of terms and conditions called a Dienstzettel immediately upon commencement of the employment relationship. There are specific rules on the information the Dienstzettel must contain.
Taxes and social security in Austria
Employees in Austria are taxed on a progressive scale with rates from 20–50% depending on their income level. Employers must withhold this income from employees’ wages and pay it to the relevant tax authorities. Both employers and employees in Austria pay social security contributions, which cover things like sickness, unemployment, pensions, and accident insurance.
Background checks in Austria
Employers often conduct background checks on candidates they are considering hiring. This allows them to better assess a candidate’s suitability for a role and verify information gathered during the recruitment process. However, there are certain rules and restrictions that apply to background checks in Austria, which employers must be aware of.
Required background checks in Austria
The only type of background check that is legally required for all employees in Austria is a right-to-work check. Employers are responsible for verifying that their employees have permission to work in the country. Employees from Switzerland and the European Economic Area (EEA) automatically have the right to work in Austria, while those from third countries require a work permit.
Other possible background checks in Austria
Here are some other types of background checks that employers can carry out in Austria based on the specific circumstances at hand:
- Employment history: This is a common type of background check in Austria, used to confirm a candidate’s previous employment and job performance.
- Education history: Again, this is a common type of background check. It involves verifying the validity of the candidate’s academic qualifications.
- Criminal records: Criminal records checks are common for sensitive roles or those involving vulnerable populations such as children. Carrying out a criminal background check in Austria means requesting a criminal record certificate (Strafregisterbescheinigung).
- Credit report: This is a less common type of background check in Austria, which is typically only permitted for roles involving significant financial responsibility. Restrictions apply.
- Social media: Social media checks are less common in Austria than in some other countries due to privacy concerns. However, they can be performed with the candidate’s consent.
Restrictions on background checks in Austria
Criminal records checks and credit checks are only permissible for certain roles in Austria and are subject to proportionality requirements. Employers must obtain the consent of the candidate before conducting any type of background check in Austria. While written consent is not explicitly required by law, obtaining it is a good idea for documentation and compliance purposes.
There are also certain types of background checks that are explicitly prohibited or severely limited. First, employers can’t access a candidate’s medical history or require them to provide medical information unless it’s specifically related to their ability to carry out a role. Background checks that could lead to discrimination, including those based on age, gender, ethnicity, religious beliefs, or sexual orientation, are also forbidden.
Hire employees in Austria
Before hiring employees in Austria, it’s important to consider whether it’s actually the right engagement structure for your business. For example, if you want to engage workers on a permanent basis to do work that’s related to your core business activity, you’ll probably need to engage a full-time or part-time employee. In other circumstances, it may be more beneficial to hire an independent contractor instead. Read on for more details about the different alternatives to hiring employees in Austria.
Main hiring options in Austria
Here are the main options available if you want to engage workers in Austria:
- Employee: Employees are workers engaged through an employment contract, which can be either written or verbal in Austria. They may be hired on a permanent or fixed-term basis and can work either part-time or full-time hours. It’s illegal to discriminate against employees on the basis of their part-time or fixed-term status.
- Independent contractor: Independent contractors or freelancers are independent workers who are not employees of the companies they work for. They may work for multiple companies at the same time or move from one company to another on a series of short contracts. In Austria, contractors may be engaged either directly or through a personal services company.
- Agency worker: Agency workers are hired through an intermediary agency, usually on a temporary basis. In Austria, agency workers are employees of the agency they are leased out by and enjoy specific rights and protections under Austrian employment law. They have the right to equal treatment to employees with regard to pay and other working conditions.
Other types of workers in Austria
Here are some other types of workers you may come across if you hire employees in Austria:
- Minimally employed workers: These are employees whose monthly income doesn’t exceed €551,10 (in 2025). They are covered by accident insurance and must be registered with the health insurance provider by the employer.
- Seasonal workers: Seasonal workers may be hired on short-term contracts for part of the year. There are specific collective treaty provisions that apply to seasonal workers in the hotel and catering trade.
- Apprentices: Apprentices are trainees engaged to learn a trade. In Austria, they receive full insurance protection, including sickness, accident, unemployment, and pension insurance. They also benefit from special protection against dismissal.
- Voluntary workers: Voluntary workers in Austria have the same status as trainees. They have no right to claim remuneration and are under no obligation to perform work.
Language requirements in Austria
German is the official language of Austria and the most widely spoken by far. Croatian, Slovenian, and Hungarian are official languages of autonomous populations in some regions.
Language requirements for working in Austria
Third-country nationals who want to live and work in Austria usually have to prove that they have some German language skills. They usually need to demonstrate at least A1 level German on the Common European Framework of Reference for Languages (CEFR). This usually means obtaining a certificate from the Austrian Integration Fund (Österreichischer Integrationsfonds or OIF), though some other certificates may be accepted.
People living in Austria may also sometimes need to prove their German language skills to extend their residence permit. This is part of the Integration Exam. Whether or not it’s a legal obligation, it’s a good idea to have at least some level of German proficiency if you want to live and work in Austria.
Language requirements for employment documents in Austria
There are no statutory requirements concerning the language of employment documents in Austria, as long as the employee understands the agreement. However, it’s recommended that the agreements be in German (or bilingual in German and another language in case of any disputes. In the latter case, the contract should include a provision that the German version is the prevailing one in case of any differences.
English language in Austria
English is taught as the first foreign language at most schools in Austria. In general, the country boasts a high level of proficiency, ranking ninth worldwide and eighth in Europe according to the EF English Proficiency Index.
Corporate presence requirements and payroll setup in Austria
Foreign entities can engage employees in Austria, subject to proper payroll registration and certain business and corporate tax considerations. Once properly registered, employers must withhold PAYE taxes and social security contributions and remit them to the appropriate authorities.
Steps to set up payroll in Austria
Here are the steps to follow if you want to set up payroll in Austria:
- Register with the local tax authority: Businesses must register within one month of starting business activities, usually with the tax authority closest to their main location. The business will then be issued with an employer tax ID, which is needed to withhold and pay income tax.
- Register with the social security authority: The next step is to register with the social security authority, which can be done online. The business will be issued with a social security ID to be used for declarations and payments to social security.
- Set up a payroll account for each employee: Employers must register each employee with the tax and social security authorities before they start work. They must set up a payroll account for each employee, which is used for income tax purposes.
Different rules and requirements apply to foreign entities wanting to hire and run payroll in Austria. For many businesses, the simplest solution is to outsource payroll to a provider like an employer of record (EoR). This allows you to quickly and easily hire Austrian employees without the hassle of setting up payroll.
Tax considerations when running payroll in Austria
Employers in Austria must withhold income tax from their employees’ wages and pay them to the tax authorities. The deadline for payments is the 15th of the following month. Employees pay taxes at rates from 20–55% depending on their income level. Lower rates apply to additional payments, such as the 13th and 14th salary, as long as the amount paid is less than one-sixth of the employee’s total income. Additional payments of up to EUR 620 are also tax-exempt.
In addition, all employers, including foreign ones, are required to contribute to the Family Burdens Equalisation Fund (FLAF) at a rate of 3.9%. This is a special fund set up to help citizens with the cost of having a family. Employers that are members of the Austrian Chamber of Commerce have to pay an additional contribution of between 0.3% and 0.42% depending on the state where they are based.
Lastly, there is also a municipal payroll tax of 3% of the total monthly wages and salaries paid. This only applies to employers with permanent establishment in Austria, so may not impact foreign businesses.
Social security contributions in Austria
Both employers and employees in Austria must make contributions into the social security system. The total rates payable (split between employers and employees) are as follows:
- Health insurance: 7.65%.
- Unemployment insurance: 5.9%.
- Pension contribution: 22.8%.
- Accident insurance: 1.1%.
- Miscellaneous: 1.6%.
Employers must file a social security return declaring the amount withheld by the 15th of each month and pay it to the social security authorities by the 15th of the following month.
Easily hire employees in Austria with our EoR solution
Hiring employees in Austria usually means setting up a legal entity, which can be costly and time-consuming. Employers can avoid this hassle by working with an Employer of Record (EoR), like CXC.
Through our EoR solution, you can confidently hire employees in Austria, without worrying about compliance issues. We’ll handle everything from payroll to benefits to employment contracts on your behalf — so all you have to think about is finding the right person for the job.
FAQ's
What are the options for hiring employees in Austria?
International companies can hire employees in Austria through their own entity, register a foreign company as an employer or use an Employer of Record (EOR). A registered branch can also provide the local structure for direct employment.
Setting up a GmbH or subsidiary gives the business a permanent local structure. It can make sense for a long-term operation with substantial commercial activity, but it also brings incorporation, accounting, tax and payroll responsibilities. Direct employment through a foreign company may be possible, but the company still needs the right employer registrations and local payroll arrangements. The correct structure depends on the company’s activities, tax presence and whether it performs a regulated trade in Austria. A registered branch is not a separate legal entity from the foreign company.
An employer of record in Austria offers another route when the company does not want to build that infrastructure first. The EOR employs the worker locally and handles the contract, payroll, social insurance and employment administration. The client company continues to manage the employee’s role, goals, performance and day-to-day work. Where the worker is integrated into the client’s business and works under its direction, the arrangement will generally need to comply with Austria’s labour-leasing rules under the Arbeitskräfteüberlassungsgesetz (AÜG).
Do you need to set up an Austrian GmbH or subsidiary to hire employees in Austria?
No, a company does not always need a local GmbH or subsidiary to employ someone there. It may register the foreign business as an employer or use an EOR in Austria, depending on its activities and preferred operating model.
Direct employment through the foreign company still requires local setup. The employer needs to register the employee for social insurance before work starts, arrange payroll and meet Austrian tax, employment and collective-agreement requirements. It may also need local registrations or representation for filings. The employer must obtain a social-insurance contribution account number and submit the employee’s registration electronically through the applicable Austrian system. Employment of a third-country national may also require residence and labour-market permission.
An EOR removes the need for the company to create its own local employment operation. The EOR becomes the legal employer and manages the employment contract, payroll, statutory contributions and employee administration. The client still directs the employee’s work. That allocation of direction and control is one reason why the AÜG may apply and why the provider must use an appropriately authorised structure. Neither option automatically removes permanent-establishment or corporate-tax risk, which depends on the company’s activities and the employee’s authority.
How quickly can a company hire and onboard an employee in Austria?
A company with its Austrian entity and employer registrations already in place can typically onboard a new employee within one to two weeks once the employment terms are agreed and the required documents are available.
The employer needs to identify the applicable collective agreement, confirm the correct salary and employment terms, prepare the contract, set up payroll and register the employee for social insurance before they start work. If the employment contract is not in writing or does not contain all mandatory information, the employer must provide a written notice of employment, known as a Dienstzettel.
If the company does not have an Austrian entity or local employment setup, it should allow additional time to establish and register the chosen structure. The timetable depends on the legal form, ownership structure, required documents, banking and notarial steps, Companies Register process, tax registration and any trade authorisation. There is no single statutory setup period that applies to every company.
An Employer of Record can reduce the hiring timeline to around three to seven business days because the Austrian employing entity, payroll and employment setup are already in place.
This remains an indicative provider estimate, not a guaranteed legal timeframe, and assumes, the employee has the right to work, and the required documents are ready.
Employees who require Austrian work and residence permission will need additional time for immigration processing.
When is an employer of record the right solution for hiring in Austria?
An EOR is a practical option when a company wants to hire locally without creating its own entity and payroll operation. An employer of record in Austria can support a first hire, market entry, a specialist appointment or a wider international hiring program.
The EOR becomes the employee’s legal employer and manages the employment contract, payroll, social insurance, statutory benefits and local administration. The client company remains responsible for the role, objectives, performance and everyday management. This split lets the business build its team while the provider handles the local employment process. The client may nevertheless retain legal responsibilities under the AÜG, particularly in relation to working conditions, workplace safety, equal treatment, working time and information supplied to the EOR.
The model may be less suitable once a company establishes a substantial permanent operation and wants to employ a large workforce directly. The proposed working arrangement also needs to fit Austria’s labour-leasing rules. A provider should confirm the correct local structure rather than treating EOR as a standard contract that works the same way everywhere.
How much does an employer of record cost in Austria?
An Employer of Record in Austria typically costs around USD 200 to USD 700 per employee per month, on top of the employee’s salary, employer contributions and benefits.
The exact EOR fee varies based on the provider, number of employees and level of HR support included. Services such as immigration support, background checks, equipment or additional benefits may be charged separately. Some providers may also require a refundable payroll deposit.
Companies should also budget for Austria-specific employment costs beyond the EOR fee. These can include employer social insurance contributions and payments required under the employee’s applicable collective agreement. Austrian employees commonly receive 13th and 14th salary payments where these are provided by the relevant collective agreement or employment contract. There is no general statutory right to a 13th or 14th salary in every private-sector employment relationship, although most Austrian collective agreements provide holiday and Christmas payments.
When comparing EOR costs in Austria, ask for the monthly management fee and employment costs separately, including any setup, offboarding or currency charges. This gives you a better view of the total cost of employing someone rather than comparing the EOR fee alone. The quote should also explain how collectively agreed salary increases, special payments, overtime, leave, severance contributions and periods between client assignments will be charged.
What must employers check before using an employer of record in Austria?
Employers should check the provider’s legal setup, labour-leasing permissions, payroll experience and knowledge of local collective agreements. Reliable EOR services in Austria should explain which company employs the worker and how the arrangement meets employment requirements.
The provider should identify the correct collective agreement and job classification, as these can affect minimum pay, working hours, allowances and special salary payments. It should also manage social insurance registration, payroll filings, statutory benefits and employee documents accurately. Immigration support matters when the candidate is not an EEA or Swiss national.
Where the arrangement constitutes labour leasing, the provider should be able to demonstrate the relevant Austrian trade authorisation or lawful cross-border services basis. Its details can be checked in the Austrian Business Licence Information System, GISA.
The service agreement should clearly divide responsibilities for employee management, data protection, workplace safety, expenses and employment changes. Employers should also check pricing, deposits, exchange-rate charges, service contacts and the process for ending employment. A provider’s technology is useful, but local expertise and a clear route to human support matter just as much. The agreement should also require the client to provide timely and accurate information about duties, qualifications, working time, workplace risks and the collective agreement applicable to comparable employees.
How does an employer of record handle collective bargaining agreements in Austria?
An EOR identifies the collective agreement that applies and uses it to set the employee’s minimum terms. An employer of record in Austria must get the classification right before preparing the contract and payroll.
The agreement can determine minimum salary, job grade, normal working hours, overtime rates, allowances, notice rules and 13th and 14th salary payments. These rates can change when the agreement is renewed, so the EOR needs to monitor updates and adjust payroll when required.
Labour-leasing arrangements need extra care. The collective agreement for the provider’s own sector may apply, while the pay and working-time rules at the client’s business can also affect the employee. Under the AÜG, remuneration for the assignment must take account of the statutory or collectively agreed pay applicable to comparable employees performing comparable work in the client’s business. During the assignment, the client’s generally binding rules on working time and leave also apply to leased employees where required by the Act.
The client needs to give the EOR accurate information about the role, duties, workplace and comparable positions before employment begins. This must include the required qualifications, the relevant classification under the client’s collective agreement and the essential working, leave and pay conditions applicable at the client’s workplace.
Does an employer of record in Austria need a licence from the Public Employment Service?
No, an EOR does not obtain its labour-leasing licence from the Public Employment Service. When the model counts as labour leasing, the EOR in Austria instead needs the appropriate authorisation from the local trade authority.
Labour leasing is a regulated trade, so the provider must meet professional requirements and have the correct entry in the national trade register. Depending on its structure, it may also need an appropriately qualified manager under Austrian trade law. An EEA provider supplying workers across borders may be able to use the cross-border services-notification procedure when providing services temporarily and occasionally, but it still must meet local reporting and labour-leasing rules. For a regulated activity, notification to the Federal Ministry for Economic Affairs may be required, and the workers must generally be reported to the Central Coordinating Agency before the assignment begins. A temporary notification route should not be treated as authorisation to maintain a permanent Austrian operation.
The Public Employment Service (Arbeitsmarktservice or AMS) has a different role. It handles labour-market services and certain employment permissions for foreign nationals. It may still be involved when a third-country worker needs authorisation, but that is separate from the provider’s trade permission. Employers should ask a prospective provider to identify its employing entity and show which authorisation supports the proposed arrangement.
What is the Arbeitskräfteüberlassungsgesetz and how does it affect EOR services in Austria?
The Arbeitskräfteüberlassungsgesetz (Temporary Agency Work Act), normally abbreviated to AÜG, regulates arrangements where one business employs a worker who works under another business’s direction. It can apply to EOR services in Austria.
The Act protects leased employees and divides responsibilities between the provider and the client business. It covers employment information, pay, working time, workplace safety and treatment during an assignment. Mandatory rights under the AÜG cannot be excluded by contract. Leased employees must also receive access to specified workplace facilities and must be informed of relevant vacancies at the client’s business.
The client must give the provider accurate details about the role, required skills, applicable collective agreement and working conditions before the assignment starts.
The provider remains responsible for the employment relationship and payroll, while the client has important duties at the workplace. Pay must comply with the applicable employment agreement and collective rules while taking account of the remuneration prescribed for comparable work in the client’s business. The AÜG also restricts contractual terms that improperly prevent a leased worker from accepting employment with the client after the employment relationship with the provider ends.
Because the legal abbreviation is AÜG rather than AKÜ, employment documents should use the recognised name consistently.
What are the benefits of using CXC as an EOR in Austria?
CXC helps companies hire employees in Austria without setting up a local entity, while managing the local employment requirements that come with each hire.
Through our EOR service, we employ the worker locally and handle their employment contract, onboarding, payroll, statutory contributions and benefits. This includes applying the correct collective agreement and job classification, which can affect salary, working hours, allowances and other employment terms in Austria. We also support ongoing changes, leave and offboarding throughout the employee’s time with CXC.
Your HR team can continue managing the employee as part of your wider team, including their role, goals, performance and day-to-day work, while CXC handles the local employment administration.
With more than 30 years of workforce management experience and coverage across 100+ countries, CXC can support an initial hire in Austria as well as teams across multiple markets, without requiring a different employment provider in every country.
Speak to our team to learn more about hiring employees in Austria with CXC.
Compliantly hire workers anywhere with CXC
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
DISCLAIMER: The information contained on this website is provided for general informational purposes only and should not be construed as legal, tax, or other professional advice on any subject matter. While we endeavor to ensure that the content is accurate and up to date, we make no warranties or representations of any kind regarding the completeness, accuracy, reliability, suitability, or availability of the information contained herein. The content on this site is not intended to be a substitute for professional advice. Users should not act or refrain from acting based on any information on this website without seeking the appropriate legal, tax, or other professional advice tailored to their specific circumstances from qualified professionals. We expressly disclaim all liability in respect to actions taken or not taken based on any or all of the contents of this website. Use of the information on this site does not create an attorney-client, tax advisor-client, or any other professional-client relationship between the user and the website or its authors.
BLOG
Helping businesess to compliantly engage talent since 1992
Download the guide
Want to know more about hiring and compliance in Austria?
Latin America Head Office
Australia/New Zealand Head Office
Asia Head Office
EMEA Head Office
North America Head Office
Latin America Head Office
Suite 3, Level 16, 99 Mount Street
North Sydney, NSW 2060 Australia
1 George Street, One George Street, Level 10
Singapore 049145
No. 51 Bracken Road
Sandyford Dublin D18 CV48 Ireland
Suite 218, 4th Floor
10260 SW Greenburg Rd
Portland, OR United States
Portland, OR United States
Rua Funchal, 418 – 34 e 35 andar Vila Olimpia, São Paulo – SP, CEP 04551-060, Brasil