How to hire in Austria through an EOR

Fixed-term contracts in Austria have no legal cap on length or renewals, but courts will often reclassify them as indefinite if they chain together or don't point to a clear temporary need. It's a common issue for international companies hiring here for the first time.

Contract types

Most companies go with indefinite full-time contracts. They're the default, they fit Austria's strong employee protections, and collective bargaining agreements cover a lot of the detail for you.

Unless you have a clear reason to use fixed-term, indefinite is the safer default. Part-time works well when the role doesn't need full-time hours.

What has to be in the contract

Written contracts aren't actually required in Austria. Verbal agreements are valid, and collective agreements fill in a lot of the gaps. That said, you're still required to give employees a written "Dienstzettel" within one month of their start date.

The Dienstzettel needs to cover your business details, employee info, start date, work location, job title, duties, salary, bonuses, pay date, vacation entitlement, hours, the applicable collective agreement, notice period, and an end date if the contract is fixed-term.

There's no official language requirement, but German is standard if you want the contract to hold up in court. Probation periods run up to one month for blue-collar workers and three months for white-collar. During probation, either side can end the relationship with three days' notice and no reason required. After that, terminations need cause and proper notice.

Contractor vs. employee

Austria looks at how the work actually happens, not what the contract says. Employees take direction on tasks, hours, and location, use company tools, and work as part of your team. Contractors set their own schedule, use their own equipment, and operate independently.

Misclassification is expensive. Courts can reclassify contractors as employees and require you to cover back pay for benefits, vacation, social security contributions, and severance. Labor inspectors can fine you up to €2,200 per violation, and tax authorities can add penalties on top for unpaid contributions. Employees can also sue for damages separately.

Non-competes are enforceable if they protect a legitimate business interest, run no longer than one year after the contract ends, and include compensation of at least 50% of the employee's prior salary. IP created during employment belongs to you automatically, but it's worth putting it in writing anyway. For contractors, you'll need to assign IP explicitly since default rules favor the creator.

Getting the Dienstzettel right and classifying workers correctly will save you a lot of headaches. If you're hiring in Austria for the first time, working with an EOR can help you handle the local requirements without guessing.

Austria sets the legal floor at 25 paid vacation days per year for a standard 5-day week. In practice, most competitive employers offer 30 days or more.

Time off

Full-time employees on a 5-day week get 25 working days of paid annual leave per year. If they work 6 days a week, that rises to 30 days. Leave accrues from the employee's start date. In the first 6 months, it builds proportionally at around 2 days per full month worked. After 6 months, they're entitled to the full year's allowance.

From year 2 onwards, the full entitlement is available immediately. After 25 years with the same employer, it increases to 30 days (5-day week) or 36 days (6-day week). Part-timers get a pro-rated share based on their days worked per week.

Unused leave expires after 3 years, but EU rules make that difficult to enforce unless you've sent clear reminders in advance. Austria also has 13 paid public holidays. If they fall on a workday, employees get the day off with full pay.

All leave types

Here's what the law requires for each main leave type. Pay is at 100% of salary unless noted. You can't terminate someone for taking any of these.

Mandatory benefits

You're required to pay into social security covering health, pension, accident insurance, and unemployment. Total contributions sit at 32.56% of gross salary in 2024. Your share is around 21.56%; the employee's share is 11%, deducted directly from their pay.

There are no quirky mandates like meal vouchers or transport subsidies in Austria. Those are voluntary. Health insurance covers 80-90% of doctor visits and hospital stays. The pension system builds a state payout, which employees can top up with private contributions.

What people actually expect

The 25-day minimum won't help you compete for experienced hires. Most Austrian workers treat 30 days as standard, and many collective agreements require a 14th-month bonus payment on top of that. If you're not offering both, you're already behind most local employers.

Private health insurance is a common expectation. Public coverage handles the basics, but wait times for specialists can be long. Supplemental plans give employees faster access to care and English-speaking doctors. Budget around €100-200 per person per month.

Remote work is now standard across most industries. Expect to cover €50-100 per month for home office costs including internet and electricity. In tech and creative roles, 4-day weeks are becoming more common too.

Other things employees look for: a company phone or laptop, a learning budget around €1,000 per year, and 2-5 extra mental health days. If you stick to legal minimums, you'll fill junior roles but struggle to retain senior talent. Check the collective agreement for your industry to understand what the going rate actually looks like.

Letting someone go in Austria takes careful handling. The country has strong employee protections, particularly in companies with five or more staff, where workers gain dismissal rights after a six-month probation period. Get the process wrong and you're looking at court challenges, reinstatement orders, or compensation claims.

Firing someone

You don't technically need to give a reason for ordinary termination. But in companies with five or more employees, staff have general protection against dismissal after six months of service. If the firing importantly harms their livelihood and you can't justify it, they can sue for reinstatement.

Certain groups require special approval from authorities before you can dismiss them. This includes pregnant women, parents on parental leave, works council members, and severely disabled employees. For these individuals, dismissal is only possible in specific, serious circumstances.

Summary dismissal without notice is an option for serious misconduct, such as theft or a serious breach of trust. If it's a performance issue, document everything carefully. Trial periods of up to one month allow you to end employment without notice or a stated reason.

Unfair dismissal claims are genuinely common in Austria, so where possible, a mutual termination agreement is worth considering to reduce risk. If a court rules against you, it can order back pay or require you to reinstate the employee.

Notice periods run to either the 15th or the last day of the month. The figures above are minimums. Collective agreements or individual contracts can extend them in the employee's favour. Employees always give one month, regardless of tenure.

Severance

Austria uses a system called "Abfertigung Neu," which makes severance mandatory when you end employment. It doesn't apply if the employee resigns or if it's a mutual termination, unless you've agreed otherwise. It kicks in after three months of service.

Each month, 1.53% of the employee's gross salary goes into a dedicated fund. When employment ends, they receive the full amount as a lump sum. The payout works out to roughly one to four months' salary per year of service, depending on how long they've been with you. There's no cap, and the payout is tax-advantaged.

The calculation is based on average earnings over the final year of employment. Your EOR tracks and manages this for you. Severance doesn't apply to fixed-term contract endings or resignations.

Work permits and visas

You can hire foreign nationals through an EOR in Austria. The EOR acts as the legal employer, which means it sponsors the work permit and manages the application process. Non-EU workers need a work permit tied to a specific role.

The main route for skilled workers is the Red-White-Red Card, which uses a points-based system covering qualifications, experience, age, and language. There's also an Intra-Company Transfer option for employees moving within a group, and faster tracks for researchers and key specialists.

You'll generally need a job offer, proof of qualifications, and a labour market test, though some roles are exempt. Processing takes 8-12 weeks for most permits, or 2-4 weeks for shortage occupations. The EU Blue Card is available for high earners above €45,000 gross annually (2026 threshold).

Austria doesn't have a digital nomad visa. Family reunification is possible once a permit is in place. Your EOR can handle renewals, but you'll need to supply the relevant job details.

A few other things worth knowing

Austria follows GDPR strictly. You need a legal basis for processing employee data, must appoint a Data Protection Officer if you're handling data at scale, and are required to report breaches within 72 hours. Fines can reach 4% of global turnover.

Trade unions carry real weight here. Union density is over 25%, and collective bargaining agreements cover around 98% of workers through extension mechanisms. These agreements set wages, hours, and termination rules. Always check the relevant sector CBA, as it takes precedence over statutory minimums.

There's an important change coming on January 1, 2026. "Freelance employees" (employee-like freelancers under ASVG §4(4)) will gain statutory protections for the first time. This includes a four-week notice period (six weeks after two years), with notice ending on the 15th or last day of the month, and a one-month probation period. It applies to new contracts only, and CBAs can now cover these workers too. If you're using contractors in Austria, it's worth reviewing those arrangements before the deadline to avoid misclassification issues.

There's no legal requirement to provide outplacement support during redundancies. Non-compete clauses are enforceable for up to one year post-termination, provided they're limited to your line of business and the employee earned over €4,300 gross per month (2025 threshold, adjusted annually).