Employment in Austria is shaped by a set of federal labour laws and, above all, by collective agreements, which cover almost every private sector employee and set minimum pay, bonuses and many working conditions. Here is what employers need to know about leave, pay, tax, social insurance and ending employment.
Leave rights come from the Holidays Act (Urlaubsgesetz), the rules on continued pay during illness and the Maternity Protection Act. Collective agreements and contracts can improve on them but never reduce them.
25 working days a year for a 5 day week, rising to 6 weeks (30 working days) after 25 years of service. Part-time employees receive the same number of weeks, pro-rata in hours.
6 weeks in the first year, 8 weeks after 1 year, 10 after 15 years and 12 after 25 years, each followed by 4 weeks at half pay. The entitlement renews each working year.
8 weeks before and 8 weeks after birth (12 weeks after a premature, multiple or caesarean birth). Employment is prohibited and the health insurer pays maternity benefit instead of salary.
Unpaid leave with job protection. For children born since November 2023 it runs until the child turns 2 only if both parents take at least 2 months; otherwise it ends at 22 months.
Fathers have a legal right to one month of unpaid leave from work within the first 3 months after the birth, with at least 3 months’ notice to the employer. The employer does not pay salary during this month; eligible fathers can instead claim the family time bonus (Familienzeitbonus) from the state, which is EUR 54.87 a day in 2026.
Set up each Austrian leave type in IceHrm with its own accrual, carry forward and approval rules, including pro-rata entitlements for part-time staff and the extra week after 25 years. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
Austria has no statutory national minimum wage. Minimum pay is set by sector collective agreements (Kollektivverträge), which are renegotiated every year and apply to around 98% of private sector employees.
8 hours a day under the Working Hours Act. Many collective agreements set a shorter normal week, often 38.5 hours.
Including overtime, with an average of no more than 48 hours a week over a 17 week reference period. Employees can refuse the 11th and 12th hour.
Paid on top of the hourly rate, or given as time off at a rate of 1.5 hours per overtime hour. Collective agreements often set higher premiums for night and Sunday work.
Not required by statute, but almost every collective agreement grants holiday pay and Christmas pay. They are taxed at a reduced rate.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so overtime premiums reflect what was actually worked and daily and weekly limits are easy to monitor. Time & attendance →
Austria taxes personal income at progressive rates. Employers withhold wage tax (Lohnsteuer) from each month’s pay and pay it to the tax office by the 15th of the following month. The tax brackets are adjusted for inflation each year.
| Taxable annual income | Rate |
|---|---|
| Up to EUR 13,539 | 0% |
| EUR 13,539 – EUR 21,992 | 20% |
| EUR 21,992 – EUR 36,458 | 30% |
| EUR 36,458 – EUR 70,365 | 40% |
| EUR 70,365 – EUR 104,859 | 48% |
| EUR 104,859 – EUR 1,000,000 | 50% |
| Over EUR 1,000,000 | 55% |
Tax credits such as the employee tax credit and the family bonus (Familienbonus Plus) reduce the tax payable. Employees can file an annual assessment (Arbeitnehmerveranlagung) to claim deductions and refunds.
Employers and employees both pay social insurance on earnings up to the maximum contribution base of EUR 6,930 a month in 2026 (EUR 13,860 a year for the 13th and 14th salaries). Employers also pay payroll-based levies that are not capped.
| Contribution | Employer | Employee |
|---|---|---|
| Pension insurance | 12.55% | 10.25% |
| Health insurance | 3.78% | 3.87% |
| Unemployment insurance | 2.95% | 2.95% |
| Accident insurance | 1.10% | – |
| Insolvency fund (IESG) | 0.10% | – |
| Housing contribution | 0.50% | 0.50% |
| Chamber of Labour levy | – | 0.50% |
| Total social insurance | 20.98% | 18.07% |
Build Austrian pay the way you already structure it, with your own salary components, deductions and formula columns, such as a 13th and 14th salary or a severance fund column. Want to know how well IceHrm handles payroll calculations for Austria? Contact us or see Payroll →
An employer can give notice without stating a reason, as long as the notice period and termination dates are respected. Where a works council exists it must be informed before notice is given, and in businesses with at least 5 employees a dismissal can be challenged in court as socially unjustified or discriminatory. Pregnant employees, parents on leave, disabled employees and works council members have special protection.
| Length of service | Notice |
|---|---|
| Up to 2 years | 6 weeks |
| After 2 completed years | 2 months |
| After 5 completed years | 3 months |
| After 15 completed years | 4 months |
| After 25 completed years | 5 months |
For employment that started on or after 1 January 2003, severance is funded through the 1.53% monthly contribution to a staff provision fund (Abfertigung Neu). The employer makes no separate payment when the employment ends; the employee can draw the balance from the fund in most cases after 3 contribution years, or leave it invested. Employees still under the old system (Abfertigung Alt) receive a lump sum from the employer on dismissal:
| Length of service | Severance |
|---|---|
| 3 years | 2 months |
| 5 years | 3 months |
| 10 years | 4 months |
| 15 years | 6 months |
| 20 years | 9 months |
| 25 years | 12 months |
Final pay includes any unused annual leave and the pro-rata share of the 13th and 14th salaries. Larger layoffs must be notified to the Public Employment Service (AMS) at least 30 days in advance.
Austria has 13 national public holidays. Good Friday has not been a public holiday since 2019; instead, every employee may choose one day of annual leave a year as a “personal holiday”, with 3 months’ notice. 24 and 31 December are not public holidays, although many collective agreements give time off.
Employees keep their normal pay for public holidays. Those who work on a public holiday are paid for the work on top of the holiday pay. Holidays that fall on a Sunday are not moved to another day.
Leave groups give each office its own holiday calendar, so staff in Austria get the right days off automatically alongside colleagues in other countries. Holiday calendars →
An employment contract can be concluded verbally, but every employee must receive a written statement of the main terms (Dienstzettel) when employment starts. The applicable collective agreement is determined by the employer’s business sector, not by the contract.
A probation period can last at most 1 month, and during it either side can end the employment at any time without notice or reason. Fixed-term contracts end automatically on their end date; renewing them repeatedly without an objective reason can turn them into a permanent contract.
Send contracts and written statements of terms for e-signing, store them on the employee’s record, and track onboarding with task lists so registrations and documents are done before day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Austria, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Austria? Talk to us.
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