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Employing in Austria

At a glance

Employment in Austria

Various statutes regulate Austrian labor relations and the individual rights and duties of employer and employees. The most important source is the Austrian Constitutional Act on Industrial Relations, which provides a framework regulating the interaction between employees and employers. On top of that, almost all employers and employees are subject to collective bargaining agreements.

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Payroll & Tax in Austria

In 2015, the Austrian Council of Ministers announced few key elements of the upcoming tax reform. In particular, the progressive income tax scale shall lead to overall tax relief of approximately €5 billion. Moreover, the reform will increase the withholding tax on capital income, including dividends and capital gains, from 25% to 27.5%. An exception to this increase applies to interest income from bank deposits.

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Immigration / Work Permits in Austria

Citizens of non-EU countries require work permits for all types of employment in Austria. Employment in Austria is subject to both, work permit and residence permit and, as a general rule, employers who desire to sponsor a work permit must meet several requirements for their perspective employees as listed in the Immigration and Work Permit Section.

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Incorporation

It is allowed to set up a business in Austria, provided they it is necessary to be citizens of the EU, the EEA, Switzerland, or to hold an Austrian residence permit. In any case, it is mandatory to apply for a trade license. This can be accomplished at the local authority (municipal or district council, Magistrat or Bezirkshauptmannschaft).

A number of different types of legal business structures can be registered in Austria, namely:

  • Limited liability companies;
  • Public Companies;
  • Partnerships;
  • Foreign branches.
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GEO Solutions or DIY Employment in Austria?

GEO Solutions or DIY Employment

Companies entering Austria must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities.  A GEO or Austria Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have an Austrian entity established that can run payroll.

A DIY approach will typically take 6-9 months until there is a properly incorporated WFOE ready to run payroll and cost up to 6 figures if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally, Shield GEO is responsible for all compliance issues related to the employment.

Using Shield GEO Employer of Record Services in Austria

Payroll Austria
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities.

 
Grossed income Tax Rate (%)
1-11,000 0
11,001-25,000 36.5
25,001-60,000 43.21
60,001 and over 50

Income tax is charged at progressive rates and entitles to a basic tax-free allowance and deductions (which may vary depending on personal circumstances).

The employer deducts tax from your salary and remits it to the tax authorities on behalf of employees.

Tax returns are due by 30 April — but you only need to file one if you earn over a minimum amount from sources other than your employment or you are employed by 2 or more employers at once.

Tax Returns Supplied

Yes

Employers Social Security and statutory contributions

21.76% calculated on gross salary

Corporate Income Tax Rate

25% on taxable profits

Sales Tax

VAT: 20%

Withholding Tax

Dividends 25%;

Interests 0%/25%;

Royalties 20%.

Other Tax

Municipal Employees Tax: 3% calculated on gross salaries;

Contribution to Pension Fund: 1.53% calculated on gross salaries;

Contribution to the Chamber of Commerce: 0.44% calculated on gross salaries;

Tax on insurance contracts: 1% & 11% calculated on insurance premium.

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