Lyla Lindsey
Austria's minimum wage is a complex topic. Unlike many other countries, Austria does not have a national statutory minimum wage. Instead, minimum wages are set according to sector through collective bargaining agreements, which cover almost all employees across all industries. These agreements set minimum monthly salaries, with the lowest wage across sectors being around €1,700 gross per month. However, this can vary by industry, job role, and experience level. This article will explore the intricacies of Austria's minimum wage system, including the role of collective bargaining, the impact of experience and industry on wages, and the legal recourse available to workers.
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What You'll Learn
Austria's minimum wage varies by sector
Unlike many other EU countries, Austria does not have a national statutory minimum wage. Instead, the minimum wage is set according to the sector through collective bargaining agreements, which cover almost all employees across all industries. These agreements set minimum monthly salaries, which vary by industry, job role, and experience level.
The lowest wage across sectors is around €1,700 gross per month, which amounts to €23,800 per year, €457.69 per week, or €11.44 per hour for a 40-hour workweek. However, this can differ based on the number of hours worked per week, with some agreements stipulating a 38-hour workweek. Basic salary, overtime, bonuses, and idle-time compensation are all counted towards the minimum wage.
The collective bargaining agreements are negotiated between trade unions and employers' associations and usually take place annually. These agreements effectively function as a national minimum wage, and employers that don't comply can face severe fines ranging from €2,000 to €20,000 for a first offense and up to €50,000 for repeat offenses.
In addition to the sector-specific minimum wages, certain groups have their own minimum salary requirements. For example, foreign nationals must earn at least the minimum wage, and specific categories like international company executives or internationally renowned researchers have a minimum salary of €7,740 gross per month for work authorization-exempt status.
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Foreign nationals must be paid at least minimum wage
Austria does not have a national minimum wage. Instead, minimum wages are set according to sector through collective bargaining agreements, which cover almost all employees across all industries. The Austrian Federal Economic Chamber (WKO) and the Austrian Trade Union Federation (ÖGB) have agreed that the minimum wage in collective agreements should be €1,500 gross per month. However, most industries pay more than this based on their own collective agreements.
Foreign nationals must be paid at least the minimum wage. However, there is no minimum salary level for the work permit category, as long as it is above the minimum wage. Foreign nationals who are graduates from Austrian universities are not subject to a minimum salary level. Their minimum salary is determined by the applicable collective bargaining agreement. For other categories of foreign workers, the minimum salary necessary to be granted work authorization-exempt status is EUR 7,740 gross per month.
The salary of a foreign national must be sufficient to cover the cost of living of the principal and any accompanying dependents. Applicants must submit bank statements with their residence permit application to demonstrate access to sufficient funds. Employers must guarantee the salary in EUR regardless of payroll location and/or exchange rate fluctuations. If accompanying dependents are family members, then the income must be sufficient to provide for the family.
Benefits and allowances cannot be included in the minimum salary calculation. Salaries must be paid per the above-listed amounts 14 times per year in general (applicable to local hire permits).
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Severe fines for employers who don't comply
Unlike many other EU countries, Austria does not have a national statutory minimum wage. Instead, minimum wages are set according to sector through collective bargaining agreements. These cover almost all employees across all industries.
While there is no statutory minimum wage, there are still severe penalties for employers who do not comply with the minimum wage set out in the relevant collective bargaining agreements. These penalties aim to ensure fair competition between Austrian and foreign companies and to protect workers from underpayment.
The Austrian Wage and Social Dumping Prevention Act (Lohn- und Sozialdumping-Bekämpfungsgesetz, LSD-BG) ensures that all employees with their usual place of work in Austria have an absolute right to the remuneration to which they are entitled under the law, ordinance, or collective agreement. Under LSD-BG, the non-granting of minimum wage components, such as bonuses, supplements, or special payments, constitutes an administrative offence. Underpayment of employees is generally punishable by a fine of up to €50,000.
The penalties for non-compliance depend on the number of employees a company has. A company with more than three employees, for example, could be fined anything from €2,000 to €20,000 for a first offense or up to €50,000 for a repeat offense. There are also penalties for not keeping appropriate payment records and discrimination based on age, race, and gender.
In addition to the financial penalties, managers and directors are personally liable for the penalties, and a ban on services of between one and five years may be enforced for recurring violations.
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Employees receive 14 monthly payments per year
Unlike many other EU countries, Austria does not have a national statutory minimum wage. Instead, minimum wages are set according to sector through collective bargaining agreements. These cover almost all employees across all industries. Most of these agreements set minimum monthly salaries, and in many cases, the lowest wage across sectors is around €1,700 gross per month. This can vary by industry, job role, and experience level.
Employees in Austria receive 14 monthly payments per year. That means that, at the current rate of EUR 1,700 per month, the effective minimum wage in Austria amounts to:
- EUR 23,800 per year
- EUR 457.69 per week
- EUR 11.44 per hour
These figures are for an employee working 40 hours per week. The payroll cycle in Austria is monthly, and employees are typically paid by the last working day of each month. The additional 13th and 14th payments are made at the end of June and the end of November and function as holiday and Christmas bonuses. These additional payments are taxed at a much lower rate than normal salary (6%).
In the few cases in which there is neither a collective agreement nor any other form of collective legal arrangement, employers owe employees appropriate or customary remuneration. This applies, for example, to employees in fitness centres (with the exception of apprentices, for whom an apprentice wage applies).
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Austria's payroll cycle is usually monthly
Austria does not have a national statutory minimum wage, unlike many other EU countries. Instead, minimum wages are set according to sector through collective bargaining agreements. These cover almost all employees across all industries. Most of these agreements set minimum monthly salaries, and the lowest wage across sectors is typically €1,700 gross per month for a 40-hour workweek. This can vary by industry, job role, and experience level.
The standard workweek in Austria is eight hours per day and 38.5 or 40 hours per week, depending on the collective bargaining agreement in place, with a maximum of 12 hours per day (including overtime). Overtime exceeding 40 hours per week is compensated at 150% of the regular pay. Alternatively, employees may receive time off in lieu at a ratio of 1.5 days for each overtime day worked.
Basic salary, overtime, bonuses, and idle-time compensation are all counted towards the minimum wage in Austria. The minimum wage amount of €1,700 per month was negotiated by social partners in January 2017 and functions as a national minimum wage. Employers that don't pay it can face severe fines ranging from €2,000 to €20,000 for a first offence or up to €50,000 for repeat offences.
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Frequently asked questions
Unlike many other EU countries, Austria does not have a national statutory minimum wage. Instead, minimum wages are set according to sector through collective bargaining agreements. These cover almost all employees across all industries. The lowest wage across sectors is around €1,700 gross per month, but this can vary by industry, job role, and experience level.
Foreign nationals must be paid at least the minimum wage. However, there is no minimum salary level for the work permit category as long as it is above the minimum wage. For example, a single expat must have a salary of at least €1,273.99, while married couples must earn at least €2,009.85.
The minimum salary requirements for work permits vary. For instance, the minimum salary for a Special Work Permit and Temporary Residence Permit application for highly qualified employees is €7,740 gross per month.
The minimum wage for employees in Austria is typically €10.625 per hour, amounting to around €1,700 per month for a typical 40-hour work week.
Employers that don’t comply with the minimum wage in Austria face severe fines. A company of more than three employees could be fined anything from €2,000 to €20,000 for a first offence or up to €50,000 for a repeat offence.
