Employer of record in Austria: costs, rules and how to hire
Everything you need to know about hiring employees in Austria through an employer of record.
Getting someone hired in Austria can take three to five days through an Employer of Record (EOR), or three to six months if you are building your own local entity. That gap is not unusual in Europe, but what makes Austria worth understanding before you choose is what fills the time in between: a collective bargaining system covering 98 percent of the workforce, an employer social-contribution burden of around 27.6 percent on top of gross wages, and a total tax wedge on labor of 47.1 percent. These are not background details; they shape what every employment relationship costs and how it must be structured from day one.
Austria is a high-wage, high-cost market. The average annual wage sits at roughly 75,767 USD (PPP), and the statutory framework around that wage is dense. Employees are entitled to 25 days of annual leave, 13 public holidays, and a thirteenth salary that, while technically customary rather than legislated, is so embedded in collective agreements that treating it as optional is a practical mistake. The probation period is capped at 30 days, which is short by European standards, so the clock on full employment protections starts quickly.
The speed argument for an EOR is real here, but the cost argument is equally real. Austria's employer contributions are among the highest in our dataset, and those costs apply whether you use an EOR or your own entity. What changes is who handles the compliance layer, and in Austria that layer is genuinely complex.
How should you hire in Austria?
| Employer of Record (EOR) | Your own legal entity | Independent contractor | |
|---|---|---|---|
| Time to first hire | Days | Months | Immediate |
| Upfront cost | None | Incorporation, registrations, local counsel | None |
| Ongoing cost | From $99–$699/employee/month | Payroll, accounting, filings, benefits administration | Contractor invoices only |
| Best when | You want 1–5 hires fast, without a local entity or in-house payroll expertise. | You are building a long-term team (roughly 10+ employees) and want full control. | Genuinely project-based, independent work. Misclassifying an employee as a contractor carries real penalties. |
- Time to first hire
- Days
- Upfront cost
- None
- Ongoing cost
- From $99–$699/employee/month
- Best when
- You want 1–5 hires fast, without a local entity or in-house payroll expertise.
- Time to first hire
- Months
- Upfront cost
- Incorporation, registrations, local counsel
- Ongoing cost
- Payroll, accounting, filings, benefits administration
- Best when
- You are building a long-term team (roughly 10+ employees) and want full control.
- Time to first hire
- Immediate
- Upfront cost
- None
- Ongoing cost
- Contractor invoices only
- Best when
- Genuinely project-based, independent work. Misclassifying an employee as a contractor carries real penalties.
Rule of thumb: an EOR wins on speed and simplicity for the first handful of hires; once a team in Austria passes roughly ten people, running your own entity usually starts to win. Treat that as a risk-adjusted rule of thumb rather than a calculation. Registration and accounting are the cheap part; the costs that decide it are payroll software, local employment-law advice, pension administration and the statutory sick-pay and termination exposure you take on directly once you are the employer. 39 EOR providers currently offer employment in Austria. See our independent ranking.
EOR pricing in Austria: providers covering Austria publish base fees from $99 to $699 per employee per month, before statutory employer costs. How EOR pricing works.
If you are considering a local entity, the first thing to resolve is not the corporate registration itself but the collective bargaining agreement that will govern your employees. Austria's CBA system assigns the applicable agreement based on the employer's sector and the facts of the employment relationship. Getting this wrong means applying the wrong minimum pay, the wrong working-time rules, and potentially the wrong termination terms. An EOR already operates inside the correct CBA for your hire's sector, which removes that determination from your plate entirely. For a company opening its first Austrian office, that alone is a meaningful reason to start with an EOR while the entity is being established.
On the economics: the employer social-contribution rate of around 27.6 percent is fixed regardless of how you hire. An EOR adds its service fee on top of that, so the pure cost comparison between an EOR and an entity narrows as headcount grows. In my experience, the crossover point in Austria tends to come earlier than employers expect, because the entity setup costs are real and the ongoing compliance obligations, particularly around CBA monitoring and written employment particulars, require either local HR expertise or external counsel. For one or two hires, an EOR is almost always the more economical path. For a team of ten or more with long-term plans, a local entity starts to make financial sense, though the regulatory obligations do not get lighter.
Contractor arrangements deserve a mention because Austria's labor inspectorate takes misclassification seriously, and the 98 percent CBA coverage rate means there is almost always a collective agreement that would have applied to a worker who is later reclassified as an employee. The financial exposure from reclassification includes unpaid social contributions at the combined employer and employee rates, plus any CBA entitlements the worker missed. For ongoing, directed work, a contractor structure carries real risk here.
Austria employment facts at a glance
World Bank WBL measures paid leave available to mothers and fathers, which can include mother-eligible or father-eligible parental leave on top of dedicated maternity or paternity schemes.
There is no statutory severance in Austria: ending employment costs notice and negotiation, not a mandated payout, as tracked in the 2026 Employer Burden Index.
Average salary in Austria by occupation
Gross monthly earnings of employees per ISCO-08 occupation group, in EUR, from the ILO's official labour statistics. These are the latest published survey figures for Austria(reference year 2025), refreshed automatically when the ILO releases newer data. Survey earnings, not the statutory minimum wage above. Use them to benchmark an offer before an EOR quote turns it into total employer cost.
Source: ILOSTAT, the International Labour Organization's statistics database (average monthly earnings of employees, both sexes), reference year 2025.
What it costs to employ in Austria
Worked example: at the average Austria wage of $78,301/year (OECD, 2025), mandatory employer contributions add $21,618/year, bringing the true cost of employment to $99,919/year, or $8,327/month.
Based on OECD 2025 aggregate data for a single earner at average wage.
Termination and severance in Austria
Austria requires just cause for termination after the probation period, with strong employee protections under the Austrian Employment Act (Angestelltengesetz) and Labor Constitution Act. Employers must provide significant notice periods based on tenure and pay statutory severance for longer-tenured employees. The system emphasizes employment stability with courts providing additional compensation for unfair dismissals.
Ending employment in Austria costs about 2 weeks of salary by statute, one of the lower totals in the 2026 Termination Cost Index.
Source: Employ Borderless research · 2024. Statutory minimums; collective agreements and contracts can set higher terms. During the probation period (up to 30 days) shorter or no notice may apply.
What catches employers out in Austria
Austria has several compliance requirements that catch foreign employers off guard, particularly around collective bargaining, written contracts, and cross-border postings. Each of the points below has caused real problems for companies entering the market without local guidance.
Choosing the wrong collective bargaining agreement
Austria's CBA system is sector-based, not company-based. The applicable agreement depends on what your business actually does and the nature of the employment relationship, not what your contract template says. Applying the wrong CBA can mean paying below the correct minimum wage, providing insufficient leave, or using the wrong notice terms. Foreign employers frequently assume a single global employment policy covers their Austrian hires, and it does not.
Mandatory written employment particulars
Austrian law requires a written statement of specific employment terms before work begins, and the required content is exhaustively defined: names and addresses of both parties, start date, notice periods, place of work, field of services, salary details, vacation entitlement, working-time information, the applicable CBA, and the name of the staff pension fund. A generic global employment contract almost always falls short of these requirements.
ZKO4 notification before cross-border work starts
If a foreign employer sends employees to work in Austria, even temporarily, a ZKO4 notification must be filed electronically before the person starts work. Any changes to the details must be reported immediately. There is no grace period, and the obligation applies even when the worker remains employed and paid abroad. Missing this filing is not a minor oversight; it is a compliance breach from the first day of work.
Wage records must be in German and available on-site
For posted or seconded workers, the foreign employer must maintain wage records in German, and those records must be accessible for inspection at the Austrian workplace during the deployment, not stored centrally at headquarters abroad. Austrian authorities expect to be able to review documentation on-site, and the language requirement is not waivable.
Posted workers must be paid at Austrian local rates
Workers sent to Austria are entitled to pay at the level that is customary for the area, benchmarked against the applicable collective agreement or legally established rates for comparable work. A foreign employer cannot simply continue paying home-country wages if the Austrian benchmark is higher. This applies from the first day of the posting and is enforced through the same inspection regime that covers wage records.
Your next step
Our current top-rated EOR providers for Austria:
39 EOR providers can employ for you in Austria. Compare them independently, or tell us about your hire and get a shortlist matched to your situation.
Common questions about hiring in Austria
How much does it cost an employer to hire someone in Austria beyond the gross salary?
How long does it take to hire in Austria through an EOR versus setting up a local entity?
Is a thirteenth salary mandatory in Austria?
What are the notice period and severance rules in Austria?
How long is the probation period in Austria?
What leave entitlements must Austrian employers provide?
Does Austria's collective bargaining system affect foreign employers?
Can I use a PEO in Austria?
Not in the US sense of the word. A PEO (professional employer organization) is a co-employment model under US law and needs your own local entity; Austria has no equivalent. When a provider offers a "PEO in Austria", it is in practice an employer of record: the provider is the legal employer and you direct the work. That is the route this guide describes. EOR vs PEO explains where the two models differ.