Weekly Tip 3 #Location Austria: Stumbling blocks in expanding to Austria - Negotiating salaries

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If you intend to hire employees for your Austrian subsidiary, it is recommended in any case to negotiate salaries with them on an annual basis.

Adapt your salary negotiations and job advertisements to Austrian conditions. If you intend to hire employees for your Austrian subsidiary, it is recommended in any case to negotiate salaries on an annual basis with them and not on a monthly basis. Due to valid labor laws, the annual gross salary in Austria is divided into fourteen parts which are taxed at different rates. Twelve installments are paid as monthly salary and taxed at the prevailing rate. The Christmas bonus (13^th salary) and the Holiday bonus (14^th salary) are so called “special payments” (Sonderzahlungen). These two parts of the annual salary enjoy a tax advantage. The respective collective bargaining agreement or individual employment contract regulates the entitlement, amount and date of these special payments.

“Employees in Austria are used to referring to the total annual salary in job announcements and negotiations. This is an important aspect to consider when successfully designing job advertisements”, says Friedrich Schmidl, Director for Northern Germany at ABA-Invest in Austria.  

For more tips also check:

• Weekly Tip 2: Comprehensive market overview
• Weekly Tip 1: Focus on strategy first