How to hire and pay employees in Austria

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Before hiring


Before hiring employees in Austria, there are a few important things you’ll need to know. Firstly, employees in Austria earn a 13th and 14th month salary, which are paid out in June and November. 

In Austria, both parents are not allowed to take parental leave at the same time. Mothers are entitled to 16 weeks of paid maternity leave, and fathers are entitled to one month of unpaid paternity leave. 

We know this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in Austria below.

At a glance









(based on region;
see here



of gross salary

13th / 14th SALARY

Employees receive a 13th and 14th salary in June and November each year. 

Good to know

  • By law, salaries in Austria have to be paid 14 times a year. The 13th month salary is paid at the end of June and the 14th at the end of November. These salaries are taxed at a very low rate (6%).
  • Paid vacation entitlement depends on the length of employees' workweek: those working six-day weeks get 30 days off in a year and those working five-day weeks get 25 days.
  • All employees hired after January 1st, 2003 are entitled to a severance payment. This payment comes from a severance payment fund to which the employer contributes 1.53% of the employee's gross salary every month (starting from the second month of the employee's service).

Labor laws in


Working hours and overtime

Employees in Austria typically work eight hours daily and 40 hours per week. 

In Austria, there should always be a special reason for overtime, as continuous overtime is not permitted in Austria.

By law, there is a maximum working time of 10 hours per day, 50 hours per week (and under exceptional circumstances, up to 12 hours per day and 60 per week). This includes overtime with a limit of 60 hours overtime per calendar year. Overtime must be compensated with a 50% surcharge or extra time off, and overtime worked at night or on the weekend will have a 100% surcharge.

Employees are free to refuse overtime without stating any reason if the hours exceed these limits. Employees cannot opt-out of the maximum working hours regulations.

Employment contracts

Probationary period

The probationary period is one month. Extending the probation period is not possible in Austria.


IP protection and non-compete agreements

Non-compete agreements in Austria must be reasonable in scope and cannot exceed one year. Employers are not required to compensate the employee for the duration of agreement.

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Benefits and leave in


Vacation time

Employees who work a six-day week are entitled to 30 days of paid annual leave, which is increased to 36 days a year after 25 years of employment.

Employees who work a five-day week are entitled to 25 days' leave per year. 

Sick leave

Employees are entitled to the fully paid sick leave for up to six weeks. This increases with service and the breakdown is:

  • Eight weeks for one full year of employment
  • Ten weeks for 15 years of employment
  • 12 weeks for 25 years of employment

Employees are entitled to a further four weeks on half-pay, paid for by social security.

Parental leave

Employees are entitled to 16 weeks of paid maternity leave. During this time, they’re paid their average income earned in the last 13 weeks.

After this leave is exhausted, employees can choose to take maternity leave without pay until the child is two years old. During this time, they can receive child care pay from social insurance of EUR12,366,20 in total or 80% of the weekly maternity allowance, whichever they choose.

Employees are also entitled to one month of unpaid paternity leave, which can be taken until the child reaches the age of 24 months. Fathers can also claim child care pay.

In Austria, both parents cannot take parental leave simultaneously.


View a list of recognized public holidays in Austria here.

Employer tax

An employer can expect to contribute 21.23% on top of an employee’s salary in social contributions. This includes sickness, unemployment, pension, accident insurance, and miscellaneous coverage.

Individual tax

Employees in Austria are taxed federally from 0% to 55% depending on their income bracket. Social security contributions total 18.12%.

Termination in


All employees in Austria hired after January 1, 2003 are entitled to a severance payment. This payment comes from a severance payment fund to which employers contribute 1.53% of employees’ gross salary every month (starting from the second month of the employee's service).

When the employment relationship is terminated, employees are entitled to severance pay except in cases of resignation or termination due to misconduct.

Notice period

The notice period in Austria varies based on the length of employment. It goes as follows:

  • Up to two years of employment: Six weeks’ notice
  • Two to five years of employment: Two months’ notice
  • Five to 15 years of employment: Three months’ notice
  • 15-25 years of employment: Four months’ notice
  • 25+ years of employment: Five months’ notice

When employment ends by mutual consent, no notice period is required, however, termination in writing is recommended.

For resignations, the notice period is one month. However, if there is good cause for resignation, based on the employer’s breach of the contract, the notice period doesn’t have to be observed.

Start hiring employees in


Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.

Disclaimer: The information provided in this resource is for general educational purposes only and shall not be construed as legal advice. While Oyster strives to provide current and accurate information, Oyster makes no warranties or representations as to the correctness of the content provided and accepts no liability or responsibility for any errors or omissions in the content provided. By using this resource you acknowledge and agree that you do so at your own risk. The content of this resource is subject to change without notice.

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