PEO Austria

Professional Employer Organization (PEO)

Employer of Record (EOR) | Remote Work

peo austria

World Bank Ease of Doing Business Ranking

Ease of Doing Business in Austria
  • DB Rank – 27
  • DB Score – 78.7

Rankings on Doing Business topics – Austria

rankings on doing business topics austria

Topic Scores

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Global PEO in Austria

Austria, as a Professional Employer Organization (PEO) country, offers a highly favorable environment for businesses seeking to expand their operations. With its strategic location at the heart of Europe, Austria serves as a gateway to various European markets. As a PEO destination, Austria provides comprehensive solutions for managing a company’s HR and employment-related functions, making it an attractive option for foreign companies looking to establish a presence without establishing a legal entity. The country’s business-friendly policies, skilled workforce, and stable economy further contribute to its appeal. Moreover, Austria’s commitment to innovation and technological advancements ensures that businesses operating within its borders have access to cutting-edge resources and expertise. Overall, Austria stands out as an excellent PEO country, offering a blend of accessibility, support, and opportunities for businesses to thrive in the European market.

What Is a PEO?

A PEO, or Professional Employer Organization, is a company that provides a range of HR and payroll services to small and medium-sized businesses. These services can include employee benefits, payroll, compliance with labor laws, and recruiting and training.

PEOs work by entering into a co-employment agreement with the businesses they serve. In this arrangement, the PEO becomes the employer of record for the business’s employees, taking on responsibilities such as payroll, tax withholding, and employee benefits. The business, however, retains control over its day-to-day operations and the supervision of its employees.

PEOs can help businesses streamline their HR and payroll processes, reduce costs, and free up time and resources to focus on their core business activities. They can also provide access to a range of benefits and resources that small businesses may not be able to afford or manage on their own.

PEOs are also understood as employer of record / EOR at times.

Austria – Country Overview

Global PEO Services (GPS) helps companies hire employees in Austria without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.

When hiring employees in Austria, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.

Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Austria labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Austria. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.

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Federal Republic

Employment Contracts in Austria

Written employment contracts are not mandatory, but employers are required to provide a written statement specifying the job duties and terms.

In most cases, the probationary period is not more than 1 month. Temporary agency workers are entitled to the same rights as permanent employees, both during and between work assignments.

Working Hours in Austria

Normal work schedule is 8 hours per day and 40 hours per week, subject to collective agreements. Shift workers may be asked to work up to 12 hours a day. Nursing mothers, pregnant women, and individuals under the age of 18 are not required to perform night work (work done between 10 pm and 5 am). Employees who work for at least 6 hours per day are entitled to a rest period of 30 minutes under the Working Time Act.

Employee Leave in Austria


Austria has 13 statutory public holidays. Employees who work on holidays are entitled to a 100% premium over their regular wages. The holidays are:

  • January 1 – New Year’s Day
  • January 6 – Epiphany
  • Easter Monday
  • International Workers’ Day (May 1)
  • Ascension Day
  • Whit Monday
  • Corpus Christi
  • Assumption (Aug. 15)
  • Austrian National Holiday (Oct. 26)
  • All Saints’ Day (Nov. 1)
  • Immaculate Conception (Dec. 8)
  • Christmas (Dec. 25)
  • St. Stephen’s Day (Dec. 26)

Employers should provide 5 weeks of paid leave to employees for every 6 consecutive months of employment. Employees who have worked for 25 years, receive an additional week, i.e., 6 weeks of paid leave for every 6 consecutive months of employment. Days on which employees fall sick while on leave are not factored in the annual paid leave allowance.

Sick Leave

Employers must provide 6 weeks’ sick leave at full pay and 4 weeks’ leave at half pay. After exhausting their sick leave, employees receive extra sick leave paid for by the health insurance provider.

If the sick leave is taken due to a work-related illness or accident, employers should provide 8 weeks’ sick leave at full pay. After 15 years of employment, employers should provide 10 weeks’ sick leave.

Compassionate Leave

Employers must permit employees to take unpaid compassionate leave to care for terminally ill children or close relatives.

Maternity Leave

Pregnant employees can take paid maternity leave, beginning 8 weeks before birth and ending 8 weeks after child birth. For multiple births or cesarean, the work restrictions post-delivery are extended to a minimum 12 weeks. In case the maternity leave was reduced before delivery, the paid leave is extended accordingly after delivery to a maximum 16 weeks. Maternity pay is 100% of employees’ average wages in the last 13 weeks of employment. Following maternity leave, employees can also take parental leave.


Leveraging in-country legal knowhow, PEOs offer their clients secure, compliant, and efficient payroll and tax management systems. Not only will these platforms centralize and streamline related HR functions, they will also always keep your payroll and tax administration compliant with local labor laws.

Employee Benefits in Austria

Both employers and employees make contributions to social insurance to fund accident, sickness, unemployment, and pension benefits.

Current rates:

  • For employees: 18.12% of average wages up to 4,860 Euros
  • For employers: 21.48% of average wages

Old age pensions can be collected by men at the age of 65 and women at 60 years with a total of minimum 300 months’ coverage or at least 180 months of coverage in the last 30 years. The age for women to start receiving the pension will be raised gradually to 65 from 2024 to 2033.

Workers’ Compensation

After a period of work incapacity (27 weeks at the latest) due to illness or injury, concerned employees will receive a disability pension if their earning capacity has been reduced by at least 20%. The reduction has to be for more than 3 months and must be a result of occupational disease or an accident at work. In the event of total loss of earning capacity, employees may receive a monthly pension which is two-thirds of the average insured earnings over the previous year.

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