Payroll in Austria represents a process that companies and businesses use to recompense their employees, including: calculating the wages, bonuses and benefits of the employed persons. Futhermore, this process of Austrian payroll also ensures keeping accurate records of the payments made to the employees during one working month.
If you are looking for payroll services in Austria, our team can assist you as part of our comprehensive packages for companies of all sizes. You can find out more information about payroll and taxation below and, as needed, you can reach out to our company formation team in Austria for more details about specific matters, either related to taxation or to Austrian company formation in general.
| Quick Facts | |
|---|---|
| Employee/employer registration services [YES/NO] | YES |
Mandatory contributions for employees | 17–18% (health, pension, unemployment) |
Employment contributions for employers | 20–22% (social security, levies) |
| Payroll reporting requirements | Monthly filings required by the 15th of next month |
| Voluntary employee deductions | Private health insurance, transport, union fees. |
| Incentives for employees | Bonuses, wellness, training. |
| Special requirements for foreign employees | Work and residence permits. |
| Special requirements for Austrian citizens working abroad [YES/NO] | YES, tax & treaty rules may apply. |
| Specific services for foreign companies in Austria | -EOR (employer of record), -payroll outsourcing, -compliance support |
| Authorities to register with in Austria | -The Austrian Health Insurance Fund (Österreichische Gesundheitskasse – ÖGK) for social security, -tax office, -local authorities |
| Salary payment frequency in Austria | Monthly |
| Employee benefits | -25 vacation days, -13th & 14th salary, -bonuses. |
| Payroll components | -gross pay, -deductions, -bonuses, -net pay. |
| Salary payment period | Monthly, date depending on each company. |
| Overtime payment period | Paid with 50–100% bonus, or time off, depending on the company. |
Table of Contents
Employer and employee payroll contributions in Austria
Both employers and employees in Austria have the responsibility to pay the payroll contributions specific for the following:
- For health insurance, employers’ contributions are 3,78%, while the employee’s contributions – 3.87%;
- The accident insurance is covered by the employer – 1.20%;
- The old-age pension insurance is covered with 12.55% by the employer and 10.25% by the employee;
- The unemployment insurance is paid to the social security funds with equally 3% by the employer and the employee;
- The insolvency guarantee funds contributions are covered by the employer with 0.55%.
Our company formation agents in Austria can offer additional support for employers and employees regarding payroll contributions to the Austrian state. Moreover, our accountants in Austria can offer assistance for companies regarding the Austrian payroll payment process.
The tax on payroll in Austria
The employer in Austria is liable to a series of taxes, both the corporate income tax and other business-related taxes, as well as those that are applicable due to the fact that the business hires employees.
As far as payroll is concerned, the following apply:
- The payroll tax is levied by the municipality in which the business activates;
- It has a usual rate of 3% of the monthly gross salaries/wages paid by the company which has a permanent establishment in the country;
- Other payroll-related taxes can also apply and these can range between 5.77% and 5.85%;
- Companies that request payroll services in Austria will receive them as part of their package, such as the ones offered by our local team of tax specialists.
When working with a payroll provider in Austria, you can make sure that the payroll taxes are paid as part of the general corporate tax bundle. Our local team of company formation agents is in charge with this process.
Investors looking for complete services for opening a business in Austria can rely on our local team of experts.
Corporate taxation in Austria
The tax on payroll in Austria is only one of the taxes imposed on businesses. Our team summarizes the basis of taxation for companies below:
- a company registered in Austria is subject to tax on its whole domestic and foreign income; non-Austrian companies are only subject on their income derived from the country;
- the standard corporate income tax rate was subject to a reduction according to the Eco-social tax reform act, from 25% to 24% for the calendar year 2023, following a more reduced rate of 23% in 2025;
- both employers and employees are subject to social security contributions to varying degrees; these are made for the following categories: sickness, unemployment, pension, accident, and miscellaneous.
You can find out detailed information about these types of contributions, as well as access our payroll services in Austria, if you reach out to our team before or after incorporating your business in Austria, as well as before or after you have hired employees.
In addition to being a payroll provider in Austria, our team offers complete bookkeeping and accounting services for companies of all sizes, irrespective of the business field in which they activate. Please feel free to reach out to our team for complete details on our services and packages, as well as for complete information about all of the taxes a company is subject to in Austria.
Individual taxation in Austria
While the municipal tax on payroll in Austria is a tax falling on the employers, individual taxation is a matter that concerns the employee (either an Austrian citizen or a foreign national living and working in the country based on temporary or permanent residency).
You can find a brief summary of the individual tax rates applicable in Austria on the individual’s worldwide income below:
- 0% for an annual amount of up to EUR 13,308;
- 20% for annual amounts between EUR 13,309 to EUR 21,617;
- 30% when the yearly amount is between EUR 21,618 to EUR 35,836;
- 40% when the yearly amount is between EUR 35,837 to EUR 69,166;
- 48% when the yearly amount is between EUR 69,167 to EUR 103,072;
- 50% when the yearly amount is between EUR 103,073 to EUR 1,000,000;
- 55% when the yearly amount is above one million EUR.
Generally, individual income tax is withheld from salaries, interest, and dividends. Income tax on other types of income is subject to quarterly payments. Individuals follow a tax year that is the same as the calendar year and file income tax returns (as needed) with the local tax office after the end of the calendar year.
Understanding the basis for taxation is an important step for doing business in Austria, as well as for individuals who wish to start their own business as a sole trader or enter into an employment agreement with an Austrian employer.
Salary data in Austria
Based on several income reports made in the last years, gross incomes and average salary-reports, part of the payroll in Austria, we present the following statistical data:
- According to the General Income Report made by the Court of Audit in 2022, average gross income for workers and employees was EUR 31,406 per year;
- Based on another report, in 2023, the average salary for full-time employees was EUR 51,731 per year;
- The median salary for the same year was EUR 50,633 per year.
Furthermore, our company formation agents and accountants in Austria have a vast expertise with regard to starting a business in Austria. We can offer professional support with: documents preparation, business requirements, taxation issues and more.
Contact our team specializing in company incorporation in Austria for more information about business creation, taxes, as well as other business and commercial matters.