In Austria, there is a system of compulsory insurance for all employed persons. It is structured as a compulsory insurance system. Compulsory insurance begins as soon as the legal requirements are met and covers the principal areas health, unemployment, accident and pension insurance. If a person is subject to compulsory insurance in Austria, the employer must submit a notification to the competent insurance institution. If the compulsory insurance ends, a deregistration must be submitted.
The remuneration to which the employee is entitled under employment law on the basis of the employment relationship serves as the basis for determining the social insurance contributions. The employer must pay around 21% social security contribution. The employee, on the other hand, must pay approximately 18% of the gross salary. The employee’s contribution rate is already deducted before payment, as the employer pays the entire social security contribution. In 2022, the maximum contribution base is 5,670 EUR gross per month (189 EUR gross per day).
Healthcare and Insurances
There are various statutory health insurance schemes in Austria. On the one hand, there is the Austrian Health Insurance, it is the largest social health insurance in Austria, in which about 82% of the people living in Austria are insured. The BVAEB is responsible for civil servants and railroad and mining employees. Self-employed persons in Austria must self-insure themselves and their dependents with the Social Insurance Institution for Self-Employed Persons (Sozialversicherungsanstalt der Selbstständigen).
Holidays and Annual Leave
In addition to bank holidays (of which Austria has 13 per year – see below) employees are entitled to a minimum of 25 paid working days (Arbeitstage) off a year (annual leave). The entitlement to annual leave increases to 30 days after 25 years of service. It may be contractually agreed that any increases in the amount of annual leave are already compensated with a voluntarily increased amount of annual leave, so that in particular there is no increase in the amount of leave after completion of the 25th year of service.
In the case of part-time employment, the annual leave entitlement is calculated pro rata.
The annual leave entitlement can only become time-barred after the expiry of two years from the end of the annual leave year in which it arose.
Bank Holidays in Austria
- January 1st (New Year’s)
- January 6th (Epiphany)
- Easter Monday
- May 1st (Labour Day)
- Ascension Day
- Whit Monday
- Corpus Christi
- August 15th (Maria Ascension)
- October 26th (Independence Day)
- November 1st (All Saints’ Day)
- December 8th (Immaculate Conception)
- December 25th (Christmas)
- December 26th (Boxing Day)
Bank holidays which fall on a weekend do not automatically result in the following Monday being designated an official holiday.
Maternity and Paternity Leave
Under Austrian employment law, parental leave means time off from work in return for no pay on the occasion of the birth of a child. Mothers are legally entitled to parental leave under the Maternity Protection Act and fathers under the Paternity Leave Act. With certain modifications, adoptive or foster parents are also entitled to parental leave.
Following maternity leave, parents are entitled to parental leave until the end of 2nd birthday of the child. The minimum duration of statutory parental leave is two months. Within this framework, the employee (father or mother) can unilaterally determine the duration of the parental leave and only has to announce it in time. Outside these time limits, parental leave is a matter of agreement – other parental leave periods can also be agreed on an individual contract and on a voluntary basis.
The mother must inform the employer at the latest on the last day of the protection period whether or for how long he/she wishes to take parental leave. The father must inform the employer at the latest three months in advance. If the entire period is not taken from the beginning, the employee may extend the parental leave within the maximum limit. The employee must announce this at the latest three months in advance.
Until the expiry of four weeks after the end of the duly announced parental leave, the employee enjoys special protection against termination and dismissal. The employer must apply to the court for approval of the termination or dismissal and cannot terminate or dismiss the protected employee without prior court’s approval. Court approval is only granted if certain reasons exist (e.g. restriction of operations).
During parental leave, the employer must inform the employee about important company events and further training measures.
Mother and father cannot take parental leave at the same time. Exception: When changing the caregiver for the first time, both can take one month of parental leave at the same time. The parental leave can be shared twice between the parents, whereby each part must be at least two months. In this case, the special protection against termination and dismissal ends four weeks after the end of the respective part of the parental leave.
“Deferred Parental Leave” – Employees and employers can agree that three months of parental leave are deferred and used at a later date, but in any case, before the child reaches the age of seven. The prerequisite is that the first parental leave ends at the latest at the end of the child’s 21st month of life (if the father also defers parental leave: 18th month of life).
The employees are obliged to notify the employer without delay of the inability to work and, at the employer’s request, which may be repeated after a reasonable period of time, to submit a confirmation of the competent health insurance fund or of a public or municipal doctor on the cause and duration of the inability to work. If the employee fails to comply with these obligations, he/she might lose the right to remuneration for the duration of the default.
The employer may require a medical certificate already from the 1st day of absence due to illness. Please note that the medical certificate must be requested by the employer in each individual case in order to trigger the consequences of default.
If an employee is prevented from performing his duties after commencement of the employment relationship due to illness or misfortune without having caused the prevention intentionally or through gross negligence, he/she shall retain his/her entitlement to remuneration for a period of up to six weeks. However, if the prevention of service is due to an accident at work or an occupational disease within the meaning of the provisions on statutory accident insurance, the period shall be extended to up to eight weeks.
Generally, both white-collar workers and blue-collar workers are entitled to paid sick leave.
The length of the period of continued wage payments the employee is entitled to depends on the employee’s seniority (between 6 and 12 weeks). Within these periods corresponding to the respective years of service, the full salary is paid. Additionally, all employees are entitled to a further payment of half of their salary for an additional period of four weeks.
In the event of an accident at work or an occupational disease, there is an entitlement to full salary for eight (or ten from a 15-year employment relationship) weeks.
A disability is defined as a physical, mental or psychological functional impairment or impairment of sensory functions of more than six months, which is likely to make participation in working life more difficult. The protection against discrimination extends to all disabled persons, not only to so-called beneficiary disabled persons with at least 50% degree of disability. Special additional rules apply to disabled persons with at least 50% degree of disability (e.g. special protection against termination).
There is no statutory disability leave. Disabled persons can be entitled to additional leave, if this is provided for in the CBAs, service law or company agreements.
Any Other Required or Typically Provided Leave(s):
There are three types of care leave:
- Care leave due to illness of close relatives
- Care leave for the care of a child (= caregiver leave)
- Care leave for accompanying a sick child during an in-patient stay in a sanatorium or nursing home (= accompanying leave).
The eligibility requirements are as follows:
- Necessary care or necessary support
- Joint household (exception: necessary care of own sick child)
- Obligation to take all reasonable precautions to avoid being prevented from work (alternative childcare etc.)
- Evidence: If the employee obtains a medical certificate on his/her own initiative, he/she has to bear the costs alone. If the employer requests a medical certificate, he/she has to bear the costs (in Austria such a medical certificate typically costs approx. 5 – 15€).
The entitlement period is 1 week per working year, in each case up to the maximum of the employee’s regular weekly working hours (e.g. in the case of part-time employment of 20 hours, the entitlement is 20 hours per working year). Care leave may also be taken on an hourly or daily basis.
If a child under the age of 12 falls ill, the employee is entitled to an additional week of care leave under certain conditions (new illness of the child and no other claims, e.g. under a collective labour agreement). Therefore, a maximum of 2 weeks of care leave may be taken per working year. If the employee has used up this entitlement, the employee may take leave without prior agreement with the employer in the event of the need for care for a sick child under 12 years of age.
Pensions: Mandatory and Typically Provided
The Austrian statutory pension system is not based on a funded system, in which the contributions one pays in are saved and then distributed again upon retirement, but on the basis of a pay-as-you-go system. Therefore, the pension insurance contributions of those actively working today are immediately used to pay the pensions of our current retirees.
In addition to the statutory pension insurance, there is also the possibility of a company pension plan and the voluntary private pension plan. The company pension scheme is a voluntary social benefit provided by the employer. In this context, an additional pension provision can be concluded within the framework of an employment relationship. For these company pensions, the special rules of the Company Pension Act (BPG) must be observed.
- Other Required or Typically Provided Benefits
There are various types of special benefits to which employees are entitled, either by law or by individual agreement:
13th and 14th Salaries: Special payments (Christmas and Vacation allowance) are generally governed by the applicable CLA. Special payments are mandatory if the applicable CBA regulates them. They are tax privileged and very attractive for employees. Therefore, yearly salaries have to be divided by 14 and not by 12.
With a bonus, the employer usually wants to reward a special performance of the employee that goes beyond the normal work requirements and his contribution to the success of the company. In principle, there is extensive contractual freedom for bonus agreements and profit sharing. A commission on the other hand, is a performance-related variable payment, the amount of which depends both on the result of the employee’s work and on objective circumstances beyond the employee’s control, such as the course of business and the market situation.
However, there are also benefits in kind, such as highway toll stickers, under which benefits in kind of all kinds are defined. In addition to these non-cash benefits, there are also non-cash benefits on the occasion of service or company anniversaries.
In addition to these benefits in kind, there are other benefits such as a company apartment, private use of a company car, use of a parking space at the place of work, employee discounts, annual passes for public transport, company cell phones and company computers, free or reduced-price meals, company kindergarten and childcare allowance, and the free provision of work clothing.