Payroll & Workforce Management in Austria

What running payroll in Austria costs and requires

Austria applies a flat 23% corporate income tax rate, unchanged since 2024 after a phased reduction from 25%, alongside a 20% standard VAT rate and employer social security contributions of 20.98% of gross salary under the ASVG system. Dividends are subject to 27.5% withholding tax (23% where the recipient is a corporation), reducible under double tax treaties. A GmbH can be formed with a reduced minimum share capital of €10,000 (€5,000 paid in cash) since 2024, or the standard €35,000 (€17,500 paid in) variant; an AG requires €70,000.

Austria pairs one of the EU's most developed cross-border group-relief systems with a labour market where nearly every pay minimum is set by sector collective agreement rather than statute, so both tax planning and payroll require ongoing tracking rather than a fixed rulebook.

What sits on top of gross salary

20.98% of gross salary (ASVG, 2026) — monthly contribution base capped at €6,930 — this is a direct cost the employer budgets on top of gross pay for every hire, not a deduction from it.

• Asymmetric loss recapture in Gruppenbesteuerung — — foreign subsidiary losses offset immediately against Austrian taxable income are clawed back and taxed once the subsidiary turns profitable or leaves the group
• First-tier-only foreign inclusion — — only directly held (>50%) foreign subsidiaries resident in the EU or in states with a comprehensive administrative assistance agreement with Austria qualify for the tax group
• No statutory minimum wage — — pay floors are set by roughly 95% sector-level collective agreements (Kollektivverträge), each with its own entry-level minimum, paid over 14 instalments per year
• 14 salary payments — — 13th (Christmas) and 14th (holiday) month payments are mandatory under virtually all collective agreements, affecting payroll cash-flow planning and pro-rating for new hires and leavers

Austria has no statutory minimum wage

No statutory minimum — set by sector collective agreements (Kollektivverträge), typically €1,800–2,000/month gross entry-level (2026), paid 14 times/year. Where no statutory floor exists, pay levels are typically set by contract, sector norms, or collective agreement where one applies — worth confirming for the specific role and sector before an offer is made.

Standard cycle and documentation

Payroll in Austria runs on a monthly cycle, in arrears. Payslips must itemize gross pay, statutory deductions, and net pay — incomplete or incorrect payslips are exactly what a labour or social security audit checks first, so the format is a compliance requirement, not a formality.

Employer obligations and deadlines

Annual accounts filed with the Firmenbuch within 9 months of fiscal year-end; corporate tax return due 30 June of the following year (31 March of the second following year if filed via a certified tax advisor under the quota system).

Employer registration runs through the Firmenbuch (Commercial Register), administered by the regional Commercial Courts (Landesgerichte), typically taking 3–6 weeks for a standard GmbH (notarised formation, capital deposit, Firmenbuch entry).

Frequently asked questions