No Minimum Wage in Austria. What Employers Actually Pay.

Austria is one of the few EU countries without a national statutory minimum wage. There is no single number that applies to every worker. Instead, minimum pay is set through sector-specific collective bargaining agreements (Kollektivverträge), negotiated between trade unions and employer associations. There are over 800 active CBAs in Austria, and they cover approximately 98% of all employees.

This system works because membership in the Austrian Economic Chamber (Wirtschaftskammer Osterreich, WKO) is compulsory for most businesses. When a CBA is concluded between the WKO’s sectoral subunit and the relevant trade union, it automatically applies to all employers in that sector and all their employees, regardless of whether the employees are union members. This is known as the “non-member effect” (Aussenseiterwirkung).

The practical result is that virtually every employee in Austria has a legally binding minimum salary set by their sector’s CBA. The employer cannot pay below this floor. If they do, they face fines of up to EUR 50,000 per affected employee under the Wage and Social Dumping Prevention Act (Lohn- und Sozialdumping-Bekampfungsgesetz, LSD-BG).

For international companies hiring in Austria through an Employer of Record, the CBA question is the first compliance hurdle. The EOR must identify the correct CBA for the employee’s role, apply the right classification and pay grade, and ensure the salary meets or exceeds the CBA minimum. Getting this wrong creates retroactive liability that compounds over the entire employment period.

Every CBA contains a salary table (Gehaltstabelle for white-collar workers, Lohntabelle for blue-collar workers) that classifies employees into groups based on the type of work they perform. Within each group, pay increases with seniority, typically through biennial advancement steps (Biennalsprung).

The classification criteria vary by CBA but generally include the nature of the work performed (manual vs clerical, simple vs complex), the qualifications required (vocational training, university degree, specific certifications), and prior relevant work experience. Some CBAs also recognise years of service with previous employers for the purpose of advancement.

When a CBA refers to “minimum wage” or “minimum salary,” it means the lowest amount that can legally be paid to an employee in that classification and advancement step. The employer can always pay more. The difference between what the CBA requires and what the employer actually pays is called the overpayment (Uberzahlung). Overpayments are common, especially in sectors with talent shortages.

CBA minimum wages are paid 14 times per year. This is because virtually all Austrian CBAs include the 13th month (Christmas allowance, Weihnachtsremuneration) and 14th month (holiday allowance, Urlaubszuschuss) as mandatory special payments. When you see a CBA minimum quoted as EUR 1,900 per month, the annual cost is EUR 1,900 multiplied by 14, which equals EUR 26,600 gross per year, not EUR 22,800.

CBA minimums are renegotiated annually. The metalworking sector (Metallindustrie) traditionally opens the autumn bargaining round and sets the pattern for other sectors. Recent rounds have delivered increases of 3 to 5% following high inflation in 2022-2024, though 2026 agreements in export-oriented industries have moderated to increases below the inflation rate according to the European Commission.

Sources: WKO Collective Agreement Database (wko.at/kollektivvertrag), ÖGB (oegb.at)

Figures are for the lowest entry-level classification (Einstiegsstufe or equivalent) unless noted. Actual rates depend on the specific CBA version, employee classification, and advancement step. Employers should verify the exact rate from the applicable CBA for their specific hire.

Austria’s 14-payment system is one of the most distinctive features of its employment framework. Virtually all CBAs require employers to pay two additional monthly salaries per year on top of the 12 regular monthly payments.

The 13th month salary (Weihnachtsremuneration or Christmas allowance) must be paid by December 1. The 14th month salary (Urlaubszuschuss or holiday allowance) must be paid by June 30. Both payments equal one full month’s gross salary (or the CBA-specified amount, which is usually the same).

These payments are pro-rated for employees who join or leave during the calendar year. If an employee starts on July 1, they receive half of each special payment for that calendar year.

The 13th and 14th month payments receive preferential tax treatment under Austrian law. The first EUR 620 per year is tax-free. The next EUR 24,380 is taxed at 6%. The next EUR 25,000 is taxed at 27%. The next EUR 33,333 is taxed at 35.75%. This makes the effective tax burden on these payments significantly lower than on regular monthly salary, which is one reason the system has persisted.

For employers, the key implication is budgeting. A monthly gross salary of EUR 3,000 means EUR 42,000 in annual salary payments (not EUR 36,000), plus employer social security and payroll taxes on all 14 payments. The 13th/14th month payments are not a bonus. They are a mandatory, legally enforceable part of the compensation package.

Austrian employer costs above gross salary are approximately 29 to 31% depending on the province. This is in addition to the gross salary paid 14 times per year.

The main components of employer on-costs in 2026 are as follows.

Social security (employer share): 20.98% of gross salary. This covers health insurance at 3.78%, pension at 12.55%, unemployment at 2.95%, accident insurance at 1.1%, and minor contributions at 0.6%. The maximum monthly contribution base is EUR 6,930 in 2026.

Family Burden Equalisation Fund (FLAF): 3.7% of total income. Reduced from 3.9% effective January 2025.

Municipal Payroll Tax (Kommunalsteuer): 3% of total income.

Severance Fund (Mitarbeitervorsorgekasse): 1.53% of gross income. Applies from the second month of employment under the Abfertigung Neu system. The employer contributes monthly to a portable fund that the employee can withdraw as a lump sum after termination (minimum three years of employment) or transfer to a new employer.

Surcharge to FLAF: 0.36% (minimum rate).

Other fixed contributions: Disability contribution of EUR 20/month, public transportation levy of EUR 10/month (Vienna) or EUR 2/week, and Chamber of Commerce levy of 0.31-0.40% depending on the province.

A quick calculation for an employee earning EUR 3,000 gross per month: EUR 3,000 x 14 payments = EUR 42,000 annual gross. Employer on-costs at approximately 30% = EUR 12,600. Total annual employment cost before the EOR fee = approximately EUR 54,600, or EUR 4,550 per month.

Austrian employees pay progressive income tax withheld by the employer each month. The 2025/2026 brackets are:

The 13th and 14th month payments are taxed separately at the preferential rates described above, not at the employee’s marginal income tax rate. This is a significant tax advantage for Austrian employees.

Employee social security contributions are 17.07% of gross salary (on regular payments) and a reduced rate on special payments.

Austria’s CBA-driven minimum wage system produces higher effective pay floors than most of its neighbours, but the comparison is not straightforward because of the 14-payment structure.

Austria’s effective minimum is higher than Germany’s statutory minimum on an annualised basis because of the two extra payments. For companies choosing between Austria and neighbouring countries for a Central European hire, the total employment cost in Austria is significantly higher than in the Czech Republic, Slovakia, or Hungary, but the workforce is among the most productive and educated in Europe.

Underpayment in Austria is not just a contractual breach. It is a criminal-administrative offence under the Wage and Social Dumping Prevention Act (LSD-BG).

The penalties are substantial. For a first offence, fines range from EUR 1,000 to EUR 10,000 per affected employee. For repeated offences, fines can reach EUR 20,000 to EUR 50,000 per affected employee. In severe cases, the company can be banned from public procurement contracts.

Austrian authorities actively enforce these rules, particularly for posted workers and temporary staff. The financial police (Finanzpolizei) conduct workplace inspections and can request payroll records on the spot. If the employer cannot demonstrate that the correct CBA has been applied and the minimum wage met, the fine is immediate.

For EOR clients, this means the EOR bears the legal risk as the employer of record, but the reputational and operational consequences fall on everyone. If your EOR applies the wrong CBA or miscalculates the minimum salary, the underpayment liability accumulates for every month of employment and must be corrected retroactively with interest.

Part-time employees receive the CBA minimum on a pro-rata basis. An employee working 20 hours per week in a sector with a 38.5-hour CBA minimum of EUR 2,000 would receive at least EUR 1,039 gross per month (20/38.5 x EUR 2,000).

Apprentices are not subject to the regular CBA minimum wage. Instead, their remuneration is set separately in the CBA’s apprentice pay scale, which increases with each year of apprenticeship. Typical apprentice pay ranges from EUR 800 to EUR 1,800 per month depending on the sector and year.

Marginal part-time employees (geringfugig Beschaftigte) earn below the marginal employment threshold, which is EUR 551.10 per month in 2025. These employees are exempt from most social security contributions but retain accident insurance coverage.

Posted workers sent to Austria by foreign employers must be paid at least the Austrian CBA minimum for the applicable sector. This is enforced under the LSD-BG, and penalties apply to the posting employer.

Interns and trainees may receive reduced rates if the CBA provides for it, but many CBAs do not distinguish between interns and regular employees. Unpaid internships are legally problematic in Austria if the intern performs productive work.

Austria is preparing to transpose the EU Pay Transparency Directive (2023/970) by June 2026. The directive requires employers to disclose pay ranges in job advertisements, provide employees with information about pay levels for comparable work, and report on gender pay gaps.

For Austria, this directive will interact with the CBA system in important ways. Since CBA minimum wages are already public and sector-specific, the transparency requirements may be easier to implement than in countries without collective bargaining. However, the directive also covers actual pay (IST-Gehalt), not just CBA minimums. Companies that pay significant overpayments to some employees but not others will face new disclosure obligations.

Austria’s unadjusted gender pay gap stands at approximately 13%, with the widest gap in finance (18%) and the narrowest in hospitality (4%) according to Statistik Austria. The directive is expected to accelerate pay equity audits, particularly in sectors where overpayments above the CBA minimum vary significantly between male and female employees.