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Payroll and benefits in Austria

As in all countries, running payroll in Austria requires a certain knowledge of the country’s rules, regulations and cultural norms. For example, employers need to understand how taxes and social security contributions work in Austria to ensure they meet their obligations. Austria is also unusual in that it does not have a federal minimum wage. However, there are still industry-level minimums and an effective country-wide minimum that employers must abide by (or face fines).

In this section, we’ll cover everything you need to know about payroll and benefits in Austria. This includes the benefits that are covered by the social security system and those that employers must provide to their employees directly. We’ll also discuss the minimum wages that employers must be aware of, and provide general information on the process of running monthly payroll in Austria.

Minimum wage in Austria

There is no federal minimum wage in Austria. However, many collective bargaining agreements stipulate different minimum wages that apply to specific groups or industries. Additionally, in January 2017, social partners negotiated a minimum wage that would apply to workers in all industries, which is currently set at EUR 1,700 per month for a full-time employee. This effectively functions as a national minimum wage, and employers that don’t pay it can be fined.

Minimum wage in Austria per hour, week, and year

Employees in Austria receive 14 monthly payments per year. That means that, at the current rate of EUR 1,700 per month, the effective minimum wage in Austria amounts to:

  • EUR 23,800 per year.
  • EUR 457.69 per week.
  • EUR 11.44 per hour.

These figures are for an employee working 40 hours per week. However, the same monthly rate would be due to a worker working 38 hours per week as per the terms of the relevant collective agreement.

What counts towards the minimum wage in Austria?

Basic salary, overtime, bonuses, and idle-time compensation are all counted towards minimum wage in Austria. Tax-free per-diems, housing, transportation, and meal costs cannot be included in the calculation and must be granted in addition to the minimum wage.

Average salary in Austria

Salaries in Austria are generally quite high compared to other European countries, with many people earning significantly more than the minimum wage. As of 2023, the median gross annual income across all employees was EUR 35,314. Taking into account only full-time employees, the average was EUR 51,000.

Minimum wage by sector Austria

Certain sectors in Austria have their own minimum wages, stipulated by collective bargaining agreements. Factors like experience and the employer’s policies also have an impact on how much employees can earn. Here are some of the average (median) salaries for different professions in Austria in 2023:

  • Manufacturing: EUR 46,950.
  • Construction: EUR 39,692.
  • Accommodation and food service: EUR 15,166.
  • Information and communication: EUR 52,469.
  • Education: EUR 27,281.

Minimum wage in Austria after tax

The minimum wage in Austria is given as a gross figure before taxes and other payroll deductions have been taken into account. An employee earning the minimum wage in Austria in 2025 would take home EUR 19.809,32 per year.

Austria's payroll

Every country has its own rules and requirements when it comes to running payroll — read on for what you need to know about the situation in Austria.

General requirements for payroll in Austria

The payroll cycle in Austria is monthly. Employees must generally be paid by the last working day of the month unless an applicable collective bargaining agreement stipulates otherwise. The tax year is the same as the calendar year, and the currency is the euro (EUR).

Income tax in Austria

Individuals who are resident in Austria are subject to tax on their worldwide income. For non-residents, only income earned from certain sources is taxable in Austria. Employers in Austria are responsible for withholding the correct amount of income tax from each employee’s wages and paying it to the tax authorities by the 15th of each month.

Income tax is charged on a progressive scale depending on income level, as follows:

  • Below EUR 12,816: 0%.
  • Between EUR 12,816 and EUR 20,818: 20%.
  • Between EUR 20,818 and EUR 34,513: 30%.
  • Between EUR 34,513 and EUR 66,612: 40%.
  • Between EUR 66,612 and EUR 99,266: 48%.
  • Between EUR 99,266 and EUR 1,000,000: 50%.
  • More than EUR 1,000,000: 55%.

Social security contributions in Austria

Both employers and employees in Austria are required to make contributions to the country’s social security system. These add up to 20.98% of the employee’s wages for the employer and a maximum of 18.07% for the employee.

Here’s how that breaks down for employers:

  • Health insurance: 3.78%.
  • Unemployment insurance: 2.95%.
  • Pension contribution: 12.55%.
  • Accident insurance: 1.1%.
  • Miscellaneous: 0.6%.

Employers also have to pay the insolvency charge (IESG) (0.1%) and into a severance pay fund (1.53%).

For employees, the rates are as follows:

  • Health insurance: 3.87%.
  • Unemployment insurance: 0–2.95% (depending on income).
  • Pension contribution: 10.25%.
  • Miscellaneous: 1%.

Employers must file social security statements on a monthly basis. The deadline for filing is the 15th of each month, and payment is due by the 15th of the following month.

13th and 14th salary payments in Austria

Employees in Austria are entitled by law to 14 salary payments per year. The 13th and 14th payments are made at the end of June and the end of November, and function as holiday and Christmas bonuses. These additional payments are taxed at a much lower rate than normal salary (6%).

Other payroll requirements in Austria

Employers in Austria must provide employees with a payslip at the end of each pay period. The payslip must contain at least the following information:

  • Gross salary.
  • Calculation of social security contributions.
  • Withheld social security contributions.
  • Taxable income (gross income minus social security).
  • Withheld income tax.
  • Contributions to Severance Pay Fund.
  • Deducted family allowance.

Employers must also maintain payroll records for at least seven years.

Statutory benefits in Austria

Employees in Austria are entitled to many benefits through the country’s social security system. There are also other benefits that Austrian employers are required to provide to employees directly.

Social security benefits in Austria

The social security system in Austria covers the following:

  • Sickness.
  • Incapacity for work/invalidity.
  • Maternity.
  • Unemployment.
  • Old age (pensions).
  • Death of a person responsible for providing maintenance.
  • Survivors’ pension.
  • Nursing care.
  • Social assistance.

This is paid for through contributions from both employees and employers, totalling around 40% of an employee’s salary. Payments are made to various insurance bodies, including:

  • Sickness insurance: The General Accident Insurance Institute (Allgemeine Unfallversicherungsanstalt, or AUVA).
  • Unemployment insurance: The Employment Service (Arbeitsmarktservice, or AMS).
  • Pensions: The Pension Insurance Office (Pensionsversicherungsanstalt, or PVA).

Mandatory employer-provided benefits in Austria

In addition to social security benefits in Austria, employers are obliged to provide some benefits directly. These include:

  • Overtime: Any work above 40 hours is considered overtime in Austria (or 38 hours according to some collective agreements). It must be paid at a rate of at least 150% of the employee’s normal salary.
  • Bonuses: Employees are entitled to two additional salary payments, paid at the end of June and the end of November.
  • Annual leave: Employees in Austria are all entitled to a certain amount of annual leave. Their exact entitlement depends on their length of service, with the maximum entitlement set at six weeks (30 working days).
  • Sick leave: Employees are also entitled to paid time off work when they are sick. Entitlement varies based on the employee’s length of service.
  • Maternity and parental leave: Lastly, employees are entitled to time off work when they or their partner has a baby. They also benefit from special protections from dismissal while on maternity, paternity, or parental leave.

Other employee benefits in Austria

Employers in Austria can also offer additional benefits to their employees. Even if these aren’t required by law, they can help to attract and retain employees and improve morale and engagement. Here are some of the most popular additional employee benefits in Austria.

Private health insurance in Austria

Austria has a high-quality public healthcare system funded by employer and employee contributions. However, employers can still choose to offer private healthcare as an employee benefit in Austria. Private healthcare is typically used as a supplement to the public system.

Flexible work hours in Austria

Flexible working hours can be a valuable employee benefit in Austria. For example, some employers require employees to cover ‘core’ hours in the middle of the day but start and finish work at a time of their choosing. Others may offer total flexibility in when work is completed, as long as employees complete the tasks assigned to them.

Company care and transportation allowances in Austria

It’s common to provide employees with a transportation allowance of around EUR 30 per month. In some companies, employees may be offered the use of a company car. This results in an increase in the assessment base for income tax and social security.

Additional leave in Austria

Employers in Austria can also choose to offer their employees additional annual leave, sick leave, maternity, or paternity leave, for example. This can help employees to maintain a healthy work-life balance, making it a valuable benefit.

Childcare benefits in Austria

Large employers in Austria often provide workplace nurseries where employees can drop off their children while they work. Others grant their employees financial benefits to cover the cost of childcare instead.

Health and wellness benefits in Austria

Some employers offer health, fitness, and wellness benefits to help their employees look after themselves. Such benefits might include subsidised gym memberships, free fitness classes, or even subsidised vaccinations and healthcare checks organised in the workplace.

Education and training benefits in Austria

Education and training benefits are a great way for Austrian employers to show employees they are valued. Depending on the needs of their employees, employers may cover course fees, allow employees to study during working hours, and even award bonuses for passing exams.

Compliant, seamless payroll and benefits in Austria and beyond

Getting payroll and benefits right is not just a legal issue. Every country also has its own customs, norms and expectations about employee compensation. And if your operations aren’t in line with your workers’ expectations, they may not stick around for long.

Thankfully, we know what we’re doing. When you work with CXC to engage workers in Austria, we’ll handle everything from tax withholding to employee bonuses on your behalf.

Want to find out more?

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