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Employee Leasing in Austria

Serving as a major logistics hub connecting the entirety of Europe thanks to its central location, Austria offers great business potential for companies wishing to expand their activity into the Old Continent. The country has a world-renowned infrastructure and a high quality of life, making for a highly-lucrative consumer market. Moreover, thanks to its membership in the European Union, Austria benefits from major regulatory advantages.

Employee leasing with FMC Group helps businesses profit from the opportunities that the Austrian market has to offer at a reduced investment cost and risk. By delegating the administrative management of employees to FMC Group, companies can fully concentrate on their business strategy to rapidly grow their activity in the Austrian market.

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Stephan Dorn FMC Group

Content:

  • Advantages of Employee Leasing in Austria
  • Employee Leasing Services Offered by FMC Group
  • Advantages of the Austrian Market
  • Recruitment in Austria
    • Minimum Wage and Payroll
    • Social Contributions and Taxes
    • Working Hours and Overtime
    • Vacation Days
    • Parental Leave and Sick leave
    • Other Types of Paid Leave
    • Notice Period

Advantages of Employee Leasing in Austria

  • Employee leasing in Austria helps companies reduce their business expansion costs, as it allows them to expand their activity into the Austrian market without setting up a local subsidiary.
  • Companies that choose employee leasing can enter the Austrian market very quickly and enjoy great flexibility. This allows them to measure their business potential in the country as they go, allowing them to exit the market at minimal costs if the need arises.
  • Employee leasing helps businesses fully focus on their growth strategy, while FMC Group covers administrative and regulatory procedures relating to their expansion.

Employee Leasing Services Offered by FMC Group

  • Choosing candidates based on the client’s requirements;
  • Recruiting the best candidates after getting the client’s approval;
  • Negotiating employment contracts;
  • Paying taxes and social contributions according to local regulations;
  • Managing the payroll according to international standards;
  • Paying other expenses and allowances;
  • Monitoring paid leaves and other employee benefits according to employment contracts;
  • Implementing private insurance for employees at the best rates if requested;
  • Maintaining regular communication with the client about the management of their employees.

Management and Reporting Flow of Employee Leasing Services

Management and Reporting Flow Chart

Advantages of the Austrian Market

  • Austria’s geographical location provides great access to the emerging markets of Central and Eastern Europe. Vienna is only 266 kilometers away from the Hungarian capital Budapest and 299 kilometers away from the Czech capital Prague. Austria’s dense network of freeways means that all countries of Central and Eastern Europe are easily within reach. Moreover, thanks to its membership in the European Union, Austria can serve as a stepping stone to other markets, even in Western Europe.
  • Austria ranks amongst the most prosperous countries in the European Union. The Austrian population – despite being relatively small in numbers, at less than nine million inhabitants – has amazing purchasing power. The average household disposable income per capita is USD 37,001 per year, and about 72% of Austrian residents aged 15 to 64 have a paid job – well above the OECD employment average of 66%.
  • The business environment in Austria is very friendly. The country ranked 27th worldwide and 17th in the OECD high-income category in the latest World Bank’s Doing Business ranking. Austria currently has a corporate tax rate of 25% and it has been announced that it will be gradually reduced to 24% in 2023 and to 23% in 2024 to encourage investment.
  • The Austrian labor force has a very high level of productivity. In recent years, the Austrian economy has achieved remarkable productivity gains, which compensates for the relatively high labor costs in comparison with other countries in Central and Eastern Europe. According to the EU Commission, Austria ranks among the top performers in the European Union in terms of labor productivity per employee, with a value of 116.6% of the gross value added per person employed.
  • The Austrian Business Agency provides further information on the advantages of investing in Austria.

Recruitment in Austria

Minimum Wage and Payroll

  • There is no statutory minimum wage in Austria. The majority of employees’ salaries are regulated by collective agreements.
  • Salaries in Austria are paid monthly and they have to be paid by the last working day of each month.
  • It is customary to pay 13th and 14th-month bonuses in Austria. The payments are made in June and November.

Social Contributions and Taxes

Employer Contributions
Pension 12.55%
Health Insurance 3.78%
Unemployment Insurance 3.00%
Accident Insurance 1.20%
Insolvency Guarantee Fund Contribution 0.55%
Total 21.08%
Employee Contributions
Pension 10.25%
Health Insurance 3.78%
Unemployment Insurance 3.00%
Total 17.12%
Employee Income Tax
Up to EUR 11,000 per year 0.00%
Between EUR 11,001 and EUR 18,000 20.00%
Between EUR 18,001 and EUR 31,000 30.00%
Between EUR 31,001 and EUR 60,000 40.00%
Between EUR 60,001 and EUR 90,000 48.00%
Between EUR 90,001 and EUR 1,000,000 50.00%
From EUR 1,000,001 55.00%

 

Working Hours and Overtime

  • The legal working hours limit in Austria is set at 40 hours per week and eight hours per day.
  • Overtime work is paid at a rate of 50% higher than the regular pay rate.
  • Overtime work cannot exceed four hours per day and eight hours per week for more than 17 consecutive weeks.

Vacation Days

  • Employees in Austria are entitled to 25 days of paid leave per year after they complete six months of service.
  • Employees who complete 25 years of service become entitled to 30 days of paid leave per year.
  • Austria celebrates 10 public holidays:
    • Epiphany Day: January 6th
    • Easter Monday: Between late March and late April (moveable)
    • Ascension Day: Between early May and early June (moveable)
    • Pentecost Monday: Between late May and late June (moveable)
    • Feast of Corpus Christi: Between late May and late June (moveable)
    • Assumption Day: August 15th
    • National Day: October 26th
    • All Saints’ Day: November 1st
    • Conception Day: December 8th
    • Stephen’s Day: December 26th

Parental Leave and Sick Leave

  • Expecting mothers can take up to 16 weeks of maternity leave, divided equally into eight weeks before delivery and eight weeks after. The salary during maternity leave is fully paid by social security. After the end of maternity leave, employees can go on unpaid leave until the child is two years old. During this period, employees are entitled to a childcare allowance of EUR 33.88 per day.
  • Fathers can take one month of unpaid paternity leave within the first two years after the child’s birth. Employees have to notify their employer at least three months before the estimated delivery date to be eligible for this leave.
  • Employees in Austria are entitled to between six and 12 weeks of paid sick leave per year, depending on the length of their employment. Employers have to fully cover their employees’ pay during sick leave. If employees need a longer sick leave, pay becomes covered by social security.

Other Types of Paid Leave

  • When an employee loses an immediate family member or when they get married, they can take up to three days of paid leave.
  • Employees can take up to two weeks of paid leave per year to care for a sick child under the age of 12.

Notice Period

  • Employees wishing to leave their job have to respect a notice period of six weeks if they have not completed two years of service.
  • Between two and five years of service, the notice period is set at two months.
  • Between five and 15 years of service, it is set at three months.
  • Between 15 and 25 years of service, it is set at four months.
  • After 25 years of service, it is set at five months.

Further Useful Information

Disclaimer: Although we carefully researched and compiled the above information, we do not give any guarantee with respect to the actuality, correctness, and completeness.