Austria is a stable, innovation-driven economy in the heart of Europe. With a GDP exceeding USD 500 billion (2025), it is a hub for manufacturing, engineering, life sciences, financial services, and technology. Vienna consistently ranks among the world’s top cities for quality of life and attracts multinational companies looking for both talent and market access to the EU.

Austria’s workforce is highly skilled, multilingual, and productive, with strong representation in engineering, IT, finance, and healthcare. However, the country has a highly regulated labor system, with strong worker protections, powerful unions, and detailed requirements for payroll and benefits. Setting up an entity is possible but can take several months, requiring compliance with tax, social security, and collective bargaining agreements (CBAs).

With Gloroots as your Employer of Record (EOR), companies can hire in Austria within days instead of months, while staying fully compliant with Austrian labor law and EU directives.

What are the key facts about Austria’s economy and workforce?

Economic Highlights

• GDP: ~USD 500 billion (2025).
• Major Industries:
  • Manufacturing & Engineering (machinery, automotive, electronics).
  • Life Sciences & Biotech.
  • Finance & Banking (Vienna as a regional hub).
  • Information Technology & Software.
  • Energy & Environmental Tech (renewables, clean energy).
• Trade & Integration: EU and Eurozone member; key location for Central/Eastern European operations.
• Startup Ecosystem: Growing fintech and biotech hubs in Vienna and Graz.

Workforce Characteristics

• Workforce Size: ~4.6 million.
• Median Age: ~44 years.
• Education: Highly educated workforce; strong emphasis on STEM and vocational training.
• Languages: German (official), English widely used in business, plus regional fluency in Hungarian, Slovak, and Croatian.
• Talent Hubs: Vienna (finance, IT, life sciences), Graz (engineering, automotive), Linz (manufacturing, IT), Innsbruck (research, healthcare).

What is the work culture and talent pool like in Austria?

Austria’s workplace culture is shaped by precision, professionalism, and respect for hierarchy, while also emphasizing collaboration and consensus-building. Employees value stability, clear communication, and work-life balance. Younger professionals and international teams increasingly embrace flexibility and hybrid work models.

White-Collar Talent Strengths

• Engineering & Manufacturing: Automotive, aerospace, and electronics.
• Information Technology: Software development, cybersecurity, and digital services.
• Life Sciences: Biotech, pharma, and medical research.
• Finance & Consulting: Vienna is a regional center for banking and professional services.
• Multilingual Skills: Many professionals are fluent in English and neighboring Central/Eastern European languages.

What are the Work Visas in Austria: How Gloroots Helps?

Main Types of Work Visas

1. EU/EEA/Swiss Nationals
   • No visa required; free movement applies.
2. Red-White-Red Card
   • Primary work permit for non-EU nationals.
   • Categories include: Highly Qualified Workers, Skilled Workers in Shortage Occupations, and Key Workers.
   • Valid for up to 2 years.
3. EU Blue Card
   • For highly skilled non-EU professionals with higher education.
   • Requires job offer with salary at least 1.5x national average.
4. Intra-Company Transfer (ICT) Permit
   • For multinational companies relocating staff to Austrian branches.
5. Job Seeker Visa
   • Allows highly qualified professionals to search for work for up to 6 months.

Challenges in Employer-Sponsored Work Visas

• Only Austrian-registered entities can sponsor visas.
• Employers must demonstrate labor market test compliance in some cases.
• Applications require valid contracts, proof of qualifications, and salary compliance.
• Processing takes 6–12 weeks, potentially delaying hires.

How Gloroots Simplifies Immigration in Austria

• Sponsors foreign employees through its local entity.
• Prepares compliant contracts and documentation in German/English.
• Coordinates applications with Austrian authorities and embassies.
• Manages renewals and residence permits.
• Ensures onboarding in weeks instead of months.

Visa Sponsorship: Direct Employer vs. Gloroots

Q: What is the process of setting up an entity in Austria?

Direct Entity Setup

• Common Structures:
  • GmbH (Limited Liability Company) – most common for foreign investors.
  • AG (Public Limited Company) – for larger corporations.
• Requirements:
  • Minimum share capital: EUR 10,000 (for GmbH, half payable upfront).
  • At least one local managing director.
  • Registration with Companies Register, Tax Office, and Social Insurance Authority.
• Timeline: 6–10 weeks for full incorporation and registrations.
• Ongoing Compliance: Annual reporting, payroll filings, CBA alignment, corporate tax returns (25%).

Using Gloroots EOR Instead

• Hire employees in 2–5 days without incorporating.
• Contracts, payroll, and benefits managed via Gloroots’ Austrian entity.
• Full compliance with Austrian labor law and CBAs.
• No need for share capital, bank accounts, or local directors.

Direct Entity vs. Gloroots EOR in Austria

Q: What are the key employment laws in Austria that employers should know?

Employment in Austria is regulated by the Austrian Employment Act, Collective Bargaining Agreements (CBAs), and EU labor directives. CBAs cover most industries and set standards for wages, working time, overtime, and benefits.

Key Employment Regulations

• Employment Contracts
  • Must be in writing.
  • Must include role, salary, working hours, benefits, and termination clauses.
  • Probation: up to 1 month (can be extended by CBA).
• Working Hours
  • Standard: 40 hours/week.
  • Daily maximum: 12 hours (including overtime).
  • Weekly maximum: 60 hours (with overtime, subject to limits).
• Overtime Pay
  • 150% of base pay.
  • 200% on Sundays, public holidays, and night work (unless compensated by time off).
• Minimum Wage
  • Austria has no national minimum wage; instead, sector-specific CBAs set binding minimums.
  • Most CBAs set minimum monthly wages of EUR 1,700–2,000 gross.
• Annual Leave
  • 25 working days per year (after 6 months of service).
  • Increases to 30 days after 25 years of service.
• Public Holidays
  • 13 national holidays (e.g., New Year’s Day, National Day, Christmas).
• Sick Leave
  • Paid by employer for up to 6–12 weeks depending on tenure.
  • After that, covered by statutory health insurance.
• Maternity Leave
  • 16 weeks paid (8 before and 8 after birth).
  • Additional parental leave available up to 2 years.
• Paternity Leave
  • 1 month unpaid “daddy month,” plus parental leave options.
• Severance Pay
  • Employers contribute 1.53% of salary monthly to an employee severance fund (Abfertigung Neu system).
  • Employees access funds upon termination, resignation, or retirement.

Employment Law: Direct Employer vs. Gloroots

Q: What are the risks of misclassification in Austria?

Austria enforces strict rules distinguishing employees from independent contractors (Freelancers/Self-employed). If contractors work under employer-like conditions, they may be reclassified as employees, leading to back payments of taxes, social contributions, and employee benefits.

Criteria for Misclassification

A worker is likely an employee if:

• They follow employer instructions on work, time, or place.
• They are integrated into the employer’s operations.
• They use company equipment.
• They are paid a fixed salary.

A genuine contractor should:

• Have multiple clients.
• Work independently without employer control.
• Use their own equipment.
• Invoice based on deliverables, not hours.

Penalties for Misclassification

• Retroactive social contributions (employer + employee shares).
• Retroactive holiday pay, overtime, and sick pay.
• Potential fines from labor authorities.
• Risk of lawsuits and reputational damage.

Misclassification: Direct vs. Gloroots

Check your risk with our Misclassification Calculator.

Q: How does an EOR help you run payroll in Austria?

Payroll Compliance Requirements

• Payroll Cycle: Monthly, typically end of month.
• Payslips: Required; must include gross, net, taxes, and social contributions.
• Withholdings: Employer must deduct and remit:
  • Income tax (progressive, up to 55%).
  • Employee social contributions (pension, unemployment, health).
• Employer Contributions: Pension, health, accident insurance, unemployment fund.
• Reporting: Monthly filings with tax office and social security institutions.

How Gloroots Simplifies Payroll

• Processes salaries with correct deductions.
• Issues compliant payslips in German/English.
• Remits contributions to health, pension, and unemployment funds.
• Files monthly reports with authorities.
• Ensures compliance with CBAs and overtime rules.

Payroll: Direct Employer vs. Gloroots

Q: How does tax compliance work in Austria?

Employee Taxation

• Income Tax (progressive, 2025):
  • Up to EUR 11,693 → 0%
  • EUR 11,694 – 19,134 → 20%
  • EUR 19,135 – 32,075 → 30%
  • EUR 32,076 – 62,080 → 42%
  • EUR 62,081 – 93,120 → 48%
  • EUR 93,121 – 1,000,000 → 50%
  • Above EUR 1,000,000 → 55%
• Employee Contributions:
  • Pension: 10.25%
  • Health: 3.87%
  • Unemployment: 3%
  • Accident insurance: 0.1% (employer only)

Employer Contributions

• Pension: 12.55%
• Health: 3.78%
• Unemployment: 3%
• Accident Insurance: 1.3%
• Miscellaneous funds: ~1%
• Total employer burden: ~20–22% of salary.

Tax Compliance: Direct Employer vs. Gloroots

Q: What benefits and entitlements do employees in Austria receive?

Austria provides generous statutory benefits under labor law and CBAs, complemented by employer-offered perks in competitive industries. Employers must strictly comply with leave entitlements, pension and health contributions, and severance funding. Many employers add private health insurance, meal vouchers, and training programs to attract top talent.

Statutory Benefits

• Annual Leave: 25 days (increasing to 30 after 25 years).
• Public Holidays: 13 national holidays.
• Sick Leave: 6–12 weeks paid by employer depending on tenure; then health insurance continues coverage.
• Maternity Leave: 16 weeks (8 before, 8 after birth), fully paid.
• Paternity Leave: 1 month unpaid “daddy month” plus shared parental leave up to 2 years.
• Parental Leave: Up to 2 years per parent; allowance available via state.
• Severance: Monthly employer contribution of 1.53% into employee’s severance fund (Abfertigung Neu).
• Health Insurance: Mandatory via statutory health funds.

Common Supplemental Benefits

• Private health or dental insurance upgrades.
• Meal vouchers or subsidies.
• Commuting and transport allowances.
• Training and professional development budgets.
• Pension top-ups beyond statutory contributions.
• Flexible/hybrid work support.

Benefits: Direct Employer vs. Gloroots

Q: What’s involved in hiring and onboarding employees in Austria?

Hiring in Austria requires written contracts in German, registration with tax and social funds, and compliance with CBAs. Onboarding must cover workplace safety, company policies, and mandatory registrations.

Key Steps in Hiring & Onboarding

1. Employment Contract
   • Written in German (can include bilingual versions).
   • Must specify probation, salary, hours, and entitlements.
2. Probation Period
   • Up to 1 month, unless otherwise set by CBA.
3. Registrations
   • Employer must register employees with:
     • Social Security Institution (ÖGK).
     • Tax Office (for payroll withholding).
4. Onboarding Compliance
   • Health & safety training.
   • Workplace orientation.
   • Assignment of equipment and access.

Hiring & Onboarding: Direct Employer vs. Gloroots

Q: How do you successfully manage a workforce in Austria?

Workforce management in Austria requires strict compliance with CBAs and cultural sensitivity. Employees value stability, precision, and clear communication, while younger professionals increasingly expect flexibility and development opportunities.

Key Considerations

• Compliance with CBAs: Rules vary by industry; employers must track wages, overtime, and leave.
• Work Culture: Professional, punctual, and structured, with respect for hierarchy but openness to collaboration.
• Employee Benefits: Beyond statutory entitlements, supplemental perks help retention.
• Performance Management: Employees expect structured reviews and career development.
• Unions: Active across industries; employers must respect collective agreements.

How Gloroots Supports Workforce Management

• Ensures payroll and HR policies align with CBAs.
• Helps design competitive benefits and perks.
• Provides HR expertise for employee relations and engagement.
• Supplies equipment for EOR employees where needed.

Q: What are the key steps and requirements in terminating employees in Austria?

Termination in Austria is regulated by law and CBAs, offering strong protections to employees. Employers must provide valid grounds, follow notice rules, and contribute to severance funds. Mishandling terminations can lead to disputes or reinstatement orders.

Termination Rules

• Grounds:
  • Business-related (redundancy, restructuring).
  • Personal (performance, conduct).
  • Must comply with CBA rules.
• Notice Periods (based on tenure):
  • 6 weeks to 5 months, depending on years of service.
  • Can be extended by CBAs.
• Severance:
  • Employer contributes monthly to Abfertigung Neu fund.
  • Employees receive payout from the fund upon termination.
• Probationary Period:
  • During probation (1 month), termination is easier and requires no notice.
• Final Settlement:
  • Employer must pay unused leave and outstanding entitlements.

Termination: Direct Employer vs. Gloroots

Q: What is the offboarding process in Austria?

Offboarding in Austria is formal and documentation-heavy. Employers must observe notice rules (often CBA-driven), calculate all final entitlements, and ensure severance fund (Abfertigung Neu) processes are completed. Errors—especially around unused leave, overtime, and statutory filings—can lead to disputes. Gloroots executes a compliant, employee-friendly exit with audit-ready paperwork.

Key Steps in the Offboarding Process

1. Confirm Grounds & Notice
   • Validate statutory/CBA grounds and the correct notice period or pay in lieu.
2. Employee Communication
   • Written notice in German (bilingual if needed), exit timeline, and next steps.
3. Final Payroll Settlement
   • Outstanding salary, unused annual leave, overtime/allowances, prorated bonuses (if applicable).
4. Severance Fund Handling
   • Confirm contributions to Abfertigung Neu and coordinate access/payout with the fund.
5. Statutory Filings & Certificates
   • Deregistrations with social insurance; provide employment certificate and final payslip.
6. Assets & Access
   • Return of equipment, badge/access revocation, data handover and IP confirmation.

How Gloroots Simplifies Offboarding

• Correct notice and payout calculations aligned to CBAs.
• Seamless coordination with social insurance and severance fund.
• Bilingual documentation and compliant records.
• Structured asset return and secure data offboarding.

Offboarding: Direct Employer vs. Gloroots (EOR)

Q: What costs and financial planning do you need with an Employer of Record in Austria?

Austria’s total cost of employment (TCE) blends gross salary with employer social contributions, severance fund payments, and CBA-driven allowances. Accurate budgeting prevents surprises at year-end or termination. Gloroots consolidates all items into a single monthly invoice, aligning with global compliance and best-practice payroll management.

Typical Cost Components (illustrative)

• Base Salary (market-driven by role/city/sector).
• Employer Social Contributions (pension, health, unemployment, accident; ~20–22% indicative).
• Severance Fund (Abfertigung Neu): 1.53% of monthly gross.
• CBA-Driven Items: Minimums, allowances, overtime premiums, 13th/14th payments where applicable by CBA.
• Benefits: Statutory health via funds; optional private health/dental, meal/commute subsidies.
• One-Offs: Equipment, onboarding/outplacement, training budgets.

How Gloroots Optimizes Cost Planning

• Predictable monthly invoicing (salary + statutory + EOR fee).
• Built-in severance accruals and allowance tracking.
• Market-aligned benefits design to control spend without hurting attraction/retention.
• Clear visibility of total employment cost by role and scenario.

Cost Planning: Direct Employer vs. Gloroots (EOR)

Q: What challenges might you face, and how do you solve them using EOR in Austria?

Austria offers exceptional talent and EU access, but employers must navigate CBA complexity, high documentation standards, strict timekeeping/overtime rules, and dense social insurance mechanics. Missteps can lead to back pay, penalties, or reputational harm. Gloroots neutralizes these risks with local HR, payroll, and compliance ownership, so you can scale confidently.

Key Challenges & Gloroots Solutions

Conclusion

Austria combines world-class talent, a stable economy, and EU market access, making it a prime location for global expansion. Its strengths in engineering, IT, life sciences, and finance, coupled with a highly educated and multilingual workforce, make it attractive for scaling teams.

The challenge lies in Austria’s complex labor framework, where CBAs, strict social security contributions, and extensive employee protections require precision in payroll and HR administration. Setting up a local entity demands capital investment, registrations, and months of preparation, often delaying hiring and increasing compliance risk.

With Gloroots as your Employer of Record in Austria, you can:

• Hire in days instead of months without setting up an entity.
• Stay fully compliant with labor law, CBAs, and tax obligations.
• Offer statutory and supplemental benefits to remain competitive.
• Simplify payroll, severance accruals, and HR documentation.
• Focus on building your Austrian team while Gloroots handles compliance.

Gloroots makes hiring in Austria simple, compliant, and fast.

Hire employees in Austria with Gloroots