Austria
Regulations for Working in Austria
Overview
Reporting and documentation obligations apply to the posting of employees to Austria. Foreign service providers must register their employees with the Central Coordination Office of the Federal Ministry of Finance and ensure that wage and social security documents are available at all times. In addition to precise requirements regarding minimum wage, working hours and required documents, there are severe penalties for non-compliance.
All employees of foreign service providers in Austria must be registered with the Central Coordination Office of the Federal Ministry of Finance for the Control of Illegal Employment. They must also be able to present their payroll documents at any time. The authority provides various registration forms on its website.
A distinction is made between the forms:
EU Posted Workers Directive
When does it have to be reported?
All employees of foreign service providers in Austria must be registered with the Central Coordination Office of the Federal Ministry of Finance for the control of illegal employment.
Are there any exceptions?
- Short-term postings (1-7 days) may be exempted if the employee attends seminars, congresses, or business meetings without providing services.
- Temporary intra-group postings or the provision of highly qualified workers for up to two months per calendar year may be exempted under certain conditions.
Documents required
Certain documents must be available either in physical or electronic form at the employee's workplace in Austria.
This includes:
- Reporting documents
- Social security documents (e.g. A1 certificate)
- Official permits, such as work permits, if applicable
In addition, payroll related documents must be available in German or English, including:
- employment contract or a declaration of working and employment conditions
- payrolls
- Proof of payroll payments
- Remittance receipts
- Wage documents
- Working time records
- Wage grading documents
Legal representative in the country
A foreign employer must appoint a legal representative in Austria to facilitate communication with the Austrian authorities.
Non-compliance with Austrian posting regulations can result in severe penalties. Fines for failing to meet notification, documentation, or remuneration requirements
- range from €20,000 to €400,000
- In extreme cases, may be prohibited from operating in Austria for up to five years
Labor Law
Minimum wage and remuneration
Posted workers must receive remuneration that complies with Austrian regulations, including collective agreements and applicable minimum wage rates.
- This includes basic wages, bonuses and overtime pay
- Expense allowances, such as lump sums and tax-free daily allowances, are not counted towards the minimum wage
- If Austrian law prescribes special payments, such as bonuses, these must be paid to posted employees in pro rata monthly amounts
Working hours
Employees who are posted to Austria are entitled to
- a minimum break of 30 minutes if the working day lasts longer than six hours
- a minimum rest period of 11 hours between shifts
- a minimum weekly rest period of 36 hours
The maximum permitted working time is 12 hours per day or 60 hours per week. However, over a reference period of 17 weeks, the average weekly working time may not exceed 48 hours.
Failure to comply with the employment laws applicable in the country may also result in financial obligations, fines or demands under local termination and working time laws.
Social Security
When a worker is posted to Austria from an EU country, EU Regulation 883/2004 on the coordination of social security systems applies:
- A1 certificate available: employee continues to be insured by the home country
- without A1 certificate: The Austrian social security regulations, and the foreign employer must behave like an Austrian employer.
The consequences of a violation may include extensive administrative obligations, back contributions (interest), increased audit costs and severe sanctions. In addition, significant reputation damage can occur in this context.
Income Tax
Compensation for work in Austria is generally subject to Austrian taxation for foreign employers from the first day. It must be checked whether the activity in Austria triggers tax liability for the employer (permanent establishment).
If there is a withholding tax obligation, the employer must:
- register with the Austrian tax authorities for payroll tax deduction
- Calculate income tax on a monthly basis, withhold it and submit it by the 15th of the following month
- submit an annual salary report and the annual payslip (“L 16”)
Payroll processing does not have to be carried out in Austria, but can be carried out from abroad in compliance with Austrian regulations. The relevant documents must be able to be transmitted to Austria at any time at the request of the tax authorities.
The consequences in case of infringement may vary depending on the situation, but there is often an immediate obligation to file a tax return in the destination country, which can have further, extensive consequences for employees and the company.
Immigration & Visas
International activities require exact compliance with international visa and entry requirements. The traveller, the type of activity, the purpose of stay and the duration are decisive for this, whether a business visa, a work visa or other special permits are required.
The consequences in case of infringement may include entry bans and associated loss of revenue, sanctions, fines and reputation damage.
Permanent Establishment
Employees working abroad can establish a permanent establishment through their activities in the target country and thus trigger a chain of financial and administrative consequences for companies.
The consequences of a violation may vary depending on the situation, but each establishment entails a significant administrative burden. In addition to registration, profit allocation and filing of the corporate income tax return, income tax obligations usually also arise.
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