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UPDATED NOV 5, 2026💡 Everything you need to know to hire and manage employees in Austria through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.
At a Glance
| Item | Detail |
|---|---|
| Currency | Euro (EUR) |
| Payroll cycle | Monthly. Toku runs one payroll per month in Austria. |
| Estimated employer costs on top of salary | Approx. 29-30%, plus mandatory 13th and 14th month salaries |
| Onboarding lead time | 5-7 business days |
| Standard working week | 40 hours (many collective agreements set 38-38.5 hours) |
| Probation period | 1 month |
| Annual leave | Five weeks per working year: 25 days on a five-day week, rising to six weeks after 25 years of service. In the first six months, entitlement accrues proportionately; from the seventh month, the full first-year entitlement is available. |
| 13th month salary | Required. Austria also requires a 14th month salary. |
| Minimum notice on termination | 6 weeks (rises with tenure) |
Onboarding a New Hire
Plan for 5-7 business days between submitting a new hire and their start date. Before day one, Toku registers the employee with Austrian social insurance, which must be completed before they start work. Your new hire just needs to provide their health insurance details and return the signed employment contract.
Submit the new hire through the Toku platform for the employment agreement, statutory registrations and payroll setup. See Onboard Contributors as a Client Admin in Toku for the steps. Toku will confirm the expected onboarding timing for your hire.
Employer Costs
On top of gross salary, employers in Austria pay the following contributions:
| Cost | Rate | Notes |
|---|---|---|
| Health insurance | 3.78% | On salary up to EUR 6,930/month (2026) |
| Pension insurance | 12.55% | Same ceiling |
| Accident insurance | 1.10% | Same ceiling |
| Unemployment insurance | 2.95% | Same ceiling |
| Housing promotion contribution | 0.50% | Same ceiling |
| Insolvency fund | 0.10% | Same ceiling |
| Severance fund (Abfertigung Neu) | 1.53% | On all gross salary from the second month of employment |
| Municipal tax | 3.00% | On total payroll, no ceiling |
| Family burden fund contribution (DB) | 3.70% | On total payroll, no ceiling |
| DB surcharge (DZ) | 0.31-0.40% | Varies by federal state |
As a rule of thumb, total cost of employment is roughly 129-130% of gross salary. Keep in mind that gross salary in Austria means 14 payments per year: nearly all employees receive a 13th month salary (holiday bonus, usually June) and a 14th month salary (Christmas bonus, usually November or December), each equal to one month's pay. Budget accordingly.
Employees pay their own social insurance (approximately 18.07% for those earning above EUR 2,630/month) plus progressive income tax of up to 55%. These are withheld from gross salary, not paid on top. Toku calculates and remits all of the above.
Compensation & Payroll
Toku runs one payroll per month in Austria, and employees receive a detailed payslip each cycle. Salaries are paid in EUR.
Austria has no statutory national minimum wage. Minimums are set by sector collective agreements and typically range from EUR 1,900 to EUR 2,300 per month for entry-level roles, with a EUR 2,000 monthly minimum (across 14 payments) being phased in sector by sector through end-2026.
The 13th and 14th month salaries are paid in June and November/December respectively. They receive favorable tax treatment for the employee (a flat 6% rate up to a ceiling), which makes them a valued part of the package.
Employment Contracts & Probation
- Toku issues a compliant local employment agreement for every hire, aligned with the applicable collective agreement.
- Indefinite-term employment is the standard. Part-time employment is fully recognized and protected.
- Fixed-term contracts are permitted but each renewal needs an objective justification; repeated renewals risk being treated as indefinite employment.
- Probation is 1 month under Toku's employment agreement, which is also the statutory maximum. During probation, either party may end the relationship without notice or cause.
Working Hours
The standard working week is 40 hours (8 hours per day); many collective agreements reduce this to 38 or 38.5 hours. Overtime is paid at 150% of the regular wage, or compensated with time off at a 1:1.5 ratio. Sunday and public holiday work is paid at 200% under most collective agreements.
Hard limits apply: no more than 12 hours per day or 60 hours per week including overtime, with a 48-hour weekly average over any 17-week period. Employees may refuse overtime beyond 10 hours per day or 50 hours per week without giving a reason.
Leave Entitlements
| Leave | Entitlement | Who pays |
|---|---|---|
| Annual leave | Five weeks per working year: 25 days on a five-day week, rising to six weeks after 25 years of service. In the first six months, entitlement accrues proportionately; from the seventh month, the full first-year entitlement is available. | Employer |
| Sick leave | 6-12 weeks at full pay (scales with tenure), then 4 weeks at 50% | Employer |
| Maternity leave | 8 weeks before and 8 weeks after birth (12 weeks for premature, multiple, or cesarean births) at 100% of average net earnings | Social insurance |
| Childcare allowance | Up to 365 days (income-dependent, 80% of last income) or up to 851 days (flat rate) | Government |
| Paternity leave (Papamonat) | 1 month within the first 3 months after birth, paid at a flat daily rate | Government |
| Care leave | 1 week per year to care for ill family members; an extra week for children under 12 | Employer |
| Bereavement leave | 1-3 days depending on relationship | Employer |
Employees must take at least 2 consecutive weeks of leave each year. Unused annual leave carries over and expires two years after the end of the year in which it was earned. Maternity pay and childcare allowances are funded by social insurance and the government, not by you.
Public Holidays (2026)
Austria has 13 paid public holidays in 2026. December 24 and 31 are half-days under many collective agreements but are not statutory holidays.
| Date | Holiday |
|---|---|
| January 1 | New Year's Day |
| January 6 | Epiphany |
| April 6 | Easter Monday |
| May 1 | Labour Day |
| May 14 | Ascension Day |
| May 25 | Whit Monday |
| June 4 | Corpus Christi |
| August 15 | Assumption Day |
| October 26 | National Day |
| November 1 | All Saints' Day |
| December 8 | Immaculate Conception |
| December 25 | Christmas Day |
| December 26 | St. Stephen's Day |
Benefits: Required vs. Common Extras
Statutory (included in employer costs above): public health insurance, pension insurance, workplace accident insurance, unemployment insurance, and the Abfertigung Neu severance fund. Every employee is covered from day one.
Toku offers fully sponsored international health coverage through Remote Health. See Remote Health, Your Global Insurance Plan for coverage details and enrollment.
Common extras in Austria include company pension schemes, meal vouchers (tax-free up to EUR 8 per working day), public transport passes (Jobticket), supplementary health insurance, and wellness programs. Toku can advise on the cost impact of any of these.
Ending Employment
Termination in Austria does not require a specific reason for most employees, but strict timing rules apply (notice generally takes effect at the end of a calendar quarter unless the contract allows mid-month dates), and strong protections cover pregnant employees, those on parental leave, and employees with disabilities. Involve Toku early so we can manage the process compliantly. For the process, see How to Terminate an Employee or Contractor.
| Service | Notice |
|---|---|
| During probation (first month) | None |
| Up to 2 years | 6 weeks |
| 2-5 years | 2 months |
| 5-15 years | 3 months |
| 15-25 years | 4 months |
| Over 25 years | 5 months |
Severance works through the Abfertigung Neu fund: the 1.53% monthly employer contribution (already included in the costs above) builds a fund the employee can access on termination or retirement. There is no separate severance lump sum for employees hired after 2002, which makes exit costs predictable.
Annual Leave at Termination
This section describes statutory annual leave. Any additional contractual or company-provided leave above the statutory minimum may follow different carryover, expiry, or payout rules under the employee's agreement or applicable policy, subject to local law.
Statutory leave termination payout: Required for legally outstanding leave. Open statutory leave is generally compensated when employment ends.
Statutory carryover / look-back: Prior-year leave remains relevant while it has not become legally time-barred. The guide's existing leave section notes unused annual leave can carry over and may expire two years after the end of the year in which it was earned.
Admin responsibility: Keep balances separated by leave year, encourage timely leave use, and do not rely on a blanket forfeiture clause.
Important exceptions: Collective agreements and protected circumstances can affect the timing and treatment of leave. Toku should review older balances before final termination figures are communicated.
See the Annual Leave / PTO Carryover & Termination Payout Guide for the cross-country framework.
Hiring Someone from Overseas?
Non-EU/EEA nationals need a residence permit with work authorization, most commonly the points-based Red-White-Red Card, with processing times of roughly 8-12 weeks. EU/EEA citizens can work in Austria without a permit under free movement rules. Talk to Toku before extending an offer to a candidate who needs sponsorship.
Last updated November 5, 2026 (onboarding link and annual leave guidance only). Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.