working reading time: 8 min publication date: 10.09.2021


© Stadt Villach | Karin Wernig
Notebook and pen

Last month we introduced you to our Guide to Employment in Austria blog post series and gave an overview of the most important labor laws and organizations that exist to support and advocate for people employed in Austria. In this second installment we’ll cover how Austrian employment contracts work and what you should know about paychecks and the deductions that come out each month (hello, social insurance!).


The most important thing you should know about employment contracts (Arbeitsvertrag or Dienstvertrag) in Austria is that they are almost always negotiated on an industry-wide level between unions (which represent employees) and the organizations which represent Austrian employers (usually the Austrian Economic Chambers or Wirtschaftskammer) . These contracts, called collective labor agreements (Kollektivverträge), stipulate remuneration, benefits, and working guidelines for all employees in each industry, and cover 98% of employees in the country. For around 2% of employees, for example those employed in the recreational or entertainment industries (e.g.: showpeople or market vendors), there are no specific collective labor agreements. In general, any employment offer or salary/benefits negotiation for a job in an industry that has a collective labor agreement must at least meet the requirements put forth in these agreements.

In your contract you should find all the details about your duties (Aufgaben), work hours (Arbeitszeit), breaks (Pausen), overtime (Überstunden), pay (Gehalt or Lohn), what your notice period is in case you quit or are fired (Kündigungsfrist), details about vacation days (Urlaub), and more. Because your contract is legally binding once you’ve signed it, it’s important to read it and understand it thoroughly, so you’re aware of your rights and responsibilities.


Interestingly, there is no federal minimum wage law in Austria - but because the vast majority of employees in the country are covered by collective labor agreements, there are de facto industry-specific minimum wage laws in place, the lowest of which is € 1,500 per month (gross income, based on full-time employment). However, because nearly all collective labor agreements include 14 monthly paychecks per year rather than 12 - two extra bonuses which are normally paid in June (Urlaubszuschuss or Urlaubsgeld) and December (Weihnachtsremuneration or Weihnachtsgeld) - in reality this figure goes up to €1,750 per month.

© Stadt Villach | Karin Wernig
An apprentice of Technoholz working with wood
© Stefanie Kaiser
Money and e-card
© Stadt Villach | Karin Wernig
A man signs a work contract


Many collective labor agreements also regulate when paychecks must be paid, although there may be individual differences, depending on the field of employment. For example, employees must receive their entire monthly pay by the last day of the month. However, before employees receive their paychecks, there are a couple standard deductions that are taken out.

First there is social insurance, or Sozialversicherung, which is mandatory for people who are employed and self-employed, also covers dependents, and is calculated based on your income.

  • The first part of social insurance is medical/health insurance (Krankenversicherung), which covers expenses related to preventative medicine, illness, dental, and maternity care, as well as ensuring income in case of an inability to work due to illness, having a baby, and so on. Your insurance card, called an e-card, verifies your insurance coverage - so don’t forget to bring it to every doctor’s visit!
  • The next part of social insurance is accident insurance, or Unfallversicherung, which applies in case of a work-related accident or illness and covers both medical care and ensures income in such cases.
  • The third category is deductions which go towards your pension or retirement, called Pensionsversicherung.

And finally, when your yearly income is above € 11,000, a wage tax (Lohnsteuer) is also taken out of your paycheck each month. Your income tax rate is based on how much you earn overall, and there are handy online tables where you can see what percent of your income will be taken out each month.

A note about marginal employment: If you are employed for very few hours per month, or what’s called geringfügig (in 2021 this is a maximum of € 475.86 earned per month, and is raised every year), you will have only accident insurance through your job, and not health insurance or pension insurance. But because health insurance is mandatory in Austria, you would in this case continue to be insured as you were before you were marginally employed - for example, through your partner. If you have no other way of having health or pension insurance, there is the option of taking out a private personal insurance plan.


Being employed in a foreign country can include all kinds of small (and large!) details that may be different than what you’re used to in your home country, but we hope this overview of how contracts, paychecks, and paycheck deductions work has helped you understand this aspect of working in Austria. Still have questions or have you noticed something else about this topic? Let us know via our Villach in English Facebook page or by writing an email to!

And don’t forget to keep an eye out for the third installment of our Guide to Employment in Austria, in which we’ll discuss all the many employment benefits that Austrian employees are entitled to - for example, vacation days, care leave, and educational leave.