Employer of Record & PEO in Austria | INS Global
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PEO in Austria

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INS Global operates as a local partner that provides international companies with global Human Resources outsourcing services.

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A Professional Employer Organization (PEO), which is similar to an Employer of Record (EOR), is a business partner employed by international companies that want to outsource their HR services and expand into new markets and countries without wanting to set up a separate legal entity.

PEOs can be used in many different ways, from legally employing overseas staff and managing employee services to handling payroll and HR.

With a PEO you will be able to save your company a good deal of time and money, and skip the complications of having to work through every required local procedure on your own.

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PEO in Austria - Summary

The Benefits of using a PEO

Certified Legal Compliance

The professional advisors that work with a PEO have intimate knowledge of local legal and administrative procedures; they are well equipped to ensure legal compliance in all aspects so that you avoid making any costly errors.

Reduced Set Up Time and Costs

When entering a new market any issue with HR or local laws can lead to a surprisingly high number of fees and fines. With a PEO you can set up quickly in your target market as well as bypass time-consuming pitfalls and  misunderstanding.

Improved Focus on Company Growth

By taking care of a multitude of different HR tasks such as headhunting, payroll outsourcing, and contractor management, a PEO frees you to invest your time and energy towards success and growth in your company goals.

Accelerated Market Entry

Typically it takes anywhere from 4 months to one year to establish a new company in a foreign market. A PEO can accomplish the same results in less than a week. *Estimate

Streamlined Company Structure

Your PEO partner will fully all the required aspects of HR services, allowing every part of the process to be streamlined into a single point of contact.

Why a PEO is Better Than Company Incorporation?

The process of integrating your company in a foreign market is usually an intricate and time-consuming process that requires a legal and physical presence in order to start operating there.

A Global PEO helps you avoid these issues by acting as a legal intermediary for essential HR services.

A PEO:
  • Minimizes time spent
  • Reduces costs
  • Avoids potential administrative or legal pitfalls
  • Makes the most of local resources and expertise
Hiring an Overseas Employee

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.

5/5

How Does Our PEO in Austria Operate?

INS Global’s PEO in Austria can be utilized to manage your employee recruitment and assignment needs in 4 comprehensive steps:

  1. We meet with you to learn what your requirements are and then formulate a plan that will best fulfill your needs.
  2. Our team of professionals will provide a legal entity that you can use to bring in staff to begin operations in Austria.
  3. We take on all the administrative and legal requirements of HR and employee regulation compliance in Austria, including hiring and paying your staff.
  4. Our experts handle the myriad of details of HR service while your staff proceeds with daily operations and moving your company towards success in the Austrian market.

PEOs (Professional Employer Organization) vs. EORs (Employer of Record)

Once you’ve decided to expand into the Austrian market and want to make the most of a PEO agreement, it’s important that you understand the difference between PEOs and Employer Of Records, in order to choose the one that best fits your business needs:

  • A PEO provides HR outsourcing services to employees of other companies that are expanding globally.
  • The services that can be provided include, but are not limited to, tax compliance, payroll outsourcing management, and regulatory assurance.
  • An EOR is a company that acts like a PEO while also legally and officially hiring employees on behalf of their clients.
  • Besides the services provided by a PEO, an EOR is also responsible for all liabilities regarding onboarding and employment.
  • In a PEO agreement the contract remains between your company and the employee.
  • In an EOR agreement the contract is directed by your company but made between the EOR and your employee.

INS Global offers both Professional Employer Organization and Employer of Record services in Austria. Contact our team of experts today, or read this article to learn more about the specifics of these two services.

Labor Law in Austria

Employment Contracts In Austria

An employment contract in Austria should clearly define all of the employee’s duties and benefits, and the salary must be in euros.

Typically a probation period does not last longer than one month, except in the case of apprentices, in which it may last three months.

Austria prides itself in having strong legislation to protect workers and worker’s right.

Any workplace with at least five workers can set up a work council.The number of members in a work council depends on the number of workers.

A work council’s involvement extends to the social, personal, and economic issues an employee might face.

The council is allowed to preside over a variety of decisions such as notices of dismissal, payment, health and safety, disciplinary methods, and more.

Working Hours and Overtime in Austria

  • A working week in Austria is typically 8 hours a day, 40 hours a week.
  • Many industries have collective bargaining agreements (CBA) that may decide on shorter work schedules, such as 38 hours a week.
  • Expectant mothers, nursing mothers, and minors (those under the age of 18) cannot be required to work night shifts.
  • Overtime hours must be compensated with either additional time off or 50% more than the average wage.
  • For overtime on weekends or night shifts the rate can go up to 100%.
  • Depending on the CBA between the union and the worker, the pay for overtime can be increased.
  • The notice time before terminating employment of an employee, and the resultant severance pay, depends on the length of time they have worked for the company.

Annual Leave and Public Holidays in Austria

There are 13 days of paid public holidays every year in Austria. If an employee is asked to work on one of these holidays, they are entitled to an additional 100% of their usual wage. 

As long as an employee has worked for a minimum of 6 months they will receive five weeks of paid vacation days. This extends to those who both part time and full-time employees. For those who have worked more than 25 years, the number of paid vacation days is raised to six weeks.

Sick Leave in Austria

The amount paid sick leave varies according to how long the employee has worked with the company. Starting from one year of employment, an employee can take up to six weeks of sick leave with full pay, and an additional 4 weeks at 50% of their wage.

The number of weeks of full pay increases with the number of years worked. A medical certificate may be required when applying for sick leave.  Sick leave that extends beyond the allotted time will be covered by the state.

Maternity and Paternity Leave in Austria

Maternity leave in Austria is 16 weeks, typically 8 weeks before birth and 8 weeks after. During this time the mother continues to receive her wages at the same amount they were paid in the weeks before the leave. Freelance contractors are also eligible for paid maternity leave.

Both parents can take unpaid parental leave until the child is 2 years old, as long as they live with the child in the same household. Other instances of paid leave include the care for a sick child under 12 years old, which is 2 weeks; leave for marriage or bereavement, which can be between 1-3 days depending on collective agreement; and unpaid leave up to 6 months to care for an ailing family member.

Tax Law and Social Security Contributions in Austria

Corporate tax in Austria is 25%, although there are plans to reduce it to 24% by 2023. 

The Austrian social system covers a wide range of needs including maternity leave, unemployment, pensions, medical care, and more. Insurance is mandatory for both self-employed and those employed by a company.

Personal income tax varies depending on the amount of income; it can be as low as 0% to as high as 55%.

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FAQs

No, it is necessary to use a local entity abroad to comply with each country labor law.

Foreign companies can either set up a local entity in each country or use the services a local PEO (Professional Employment Organization) to hire the staff on-site directly.

The employer of record is the legal entity liable for the staff employed in a specific country. In practice, a foreign company can either open a subsidiary to become the employer of record of its abroad employees or use a PEO to act as the employer of record.

Liabilities may vary from country to country and include all the staff management responsibilities: labor contract issues, payroll management, and tax compliance, social security management, expenses claim declaration, hiring and termination
procedures, etc.

In general, 1-month is necessary to have an employee based out abroad using an existing PEO as the employe of record. When incorporating a new subsidiary to be the employer of record, the delay varies from 4-12 months.

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