Austria
Mandatory employee benefits in Austria include health, accident, pension, unemployment, and social assistance, which form a robust framework for safeguarding individuals’ financial well-being and providing social security throughout their lives. With a strong emphasis on solidarity and social responsibility, Austria’s social insurance programs contribute to the country’s reputation for high living standards and quality of life.
Country Insight
The social employee benefit systems in Austria are governed by strict regulations and provide comprehensive coverage, ensuring that citizens have access to essential services and support in various life situations. Benefits are provided mainly in the form of benefits in kind, which are the same for all insured persons (principle of solidarity), or in the form of contributory cash benefits (e.g. pensions, sickness benefits). Any employee whose gross salary is above the marginal earnings threshold is covered by health insurance.
Statutory Personal Insurances in Austria
Health Insurance
Austria’s statutory health insurance is integrated into the social insurance system and managed by various carriers, including the Austrian Health Insurance Fund (ÖGK) and the Social Insurance Institution for Self-Employed Persons (SVS). Anyone working or residing in Austria is legally required to register with a health insurance provider and pay contributions. Contributions are primarily financed through payroll deductions and vary based on income. Health insurance provides comprehensive coverage, including medical treatments, medications, dental care, hospital stays, and rehabilitation services. Patients also have access to primary care physicians as well as specialists and hospitals.
Accident Insurance
Accident insurance in Austria is legally mandated and provides protection for work-related accidents, occupational diseases, and accidents that occur outside the workplace. Accident insurance falls under the jurisdiction of the General Accident Insurance Institution (AUVA) and the Accident Insurance Institution for Railways and Mining (VAEB). Employers are required to insure their employees against work accidents and occupational diseases. Contributions are calculated based on risk classes and employment sectors. Benefits include medical treatments, rehabilitation services, financial compensation, and assistance with vocational reintegration.
Pension Insurance
The pension system in Austria is based on three pillars:
First Pillar (State Pension): This pillar consists of the state pension scheme, which provides a basic level of retirement income. Contributions are made by both employers and employees throughout their working lives. The amount of pension received is calculated based on the contributions made and the number of insurance years.
Second Pillar (Occupational Pension): The second pillar includes voluntary company or occupational pension schemes established by employers. These schemes supplement the state pension and aim to provide additional retirement income. Participation in these schemes is optional for employers and employees.
Third Pillar (Private Pension): The third pillar comprises private pension plans, such as voluntary individual pension savings accounts or insurance policies. Individuals can choose to contribute to these plans to further supplement their retirement income. Contributions to private pension plans may be eligible for tax benefits.
The retirement age in Austria varies depending on several factors, including the individual’s birth year and the duration of insurance periods. Currently, the standard retirement age is gradually increasing for both men and women. As of 2024, the retirement age for men and women is 65 years, with plans to increase it to 65.5 years by 2033.
Austria’s pension system is characterized by its stability and sustainability, with a strong emphasis on ensuring adequate retirement income for its citizens. The system undergoes periodic reviews and adjustments to adapt to demographic changes and economic conditions.
Furthermore, Austria offers various incentives and support measures to encourage individuals to save for retirement, including tax advantages for pension contributions and voluntary pension schemes.
Unemployment Insurance
Unemployment insurance provides financial support for employees who become involuntarily unemployed. Contributions are shared between employers and employees. To receive benefits, insured individuals must meet certain requirements, such as a certain number of contribution months. Benefits may include financial assistance, job placement services, and training programs to facilitate reemployment.
Social Assistance
Austria offers a comprehensive system of social assistance to support individuals in need. This includes financial aid, housing assistance, healthcare services, and other social support programs. Social assistance aims to ensure the well-being and dignity of all citizens, providing a safety net for those facing economic hardship or social challenges.
Parental Leave
Parental leave in Austria is governed by the Austrian Parental Leave Act (Elternteilzeitgesetz), which provides eligible employees with the opportunity to take time off work to care for their children.
Duration: In Austria, parental leave can be taken until the child reaches the age of three. However, the exact duration of parental leave can vary depending on individual circumstances and agreements between the employer and employee.
During parental leave, the employee is entitled to receive parental leave benefits from the Austrian Family Allowance Fund (Familienbeihilfefonds). These benefits amount to a certain percentage of the individual’s previous earnings, with a minimum and maximum cap.
Eligibility: Both parents are eligible to take parental leave in Austria. This includes biological parents, adoptive parents, and legal guardians. Additionally, in cases where one parent is unable to take parental leave, the other parent may take their share of the leave.
Flexible Work Arrangements: Austrian law also allows for flexible work arrangements during parental leave, such as part-time work or working from home, to accommodate the needs of both the employer and the employee.
Job Protection: Employees who take parental leave are protected from dismissal during the leave period and have the right to return to their previous position or an equivalent position upon their return to work.
Supplementary Employee Benefits in Austria
Health Insurance
In Austria, health insurance typically covers a wide range of medical services, including hospitalization, doctor visits, medications, and more. Group health insurance plans negotiated by employers often offer discounted premiums and comprehensive coverage, ensuring top medical care for employees without significant financial burdens.
Risk Life Insurance
This type of insurance provides financial support to surviving dependents in the event of the insured person’s death. It is particularly crucial for individuals who have financial obligations such as loans or mortgages, as it helps ensure that their dependents are not burdened with debt after their passing.
Expat and Business Trip Coverage
For employees traveling abroad for business purposes, it’s essential to have adequate medical coverage in case of illness or accidents. Expat and business trip coverage ensures that employees receive medical care comparable to what they would have in their home country. This coverage may include medical expenses, emergency evacuation, repatriation, and other related costs.
Accident Insurance
Accident insurance provides financial protection in the event of accidental injuries resulting in disability, death, or related expenses such as rescue and repatriation costs. It helps alleviate the financial burden on employees and their families during challenging times.
Occupational Disability Insurance
This insurance helps replace lost income in the event of involuntary retirement due to illness or injury that prevents the insured individual from working. It provides financial support to ensure continued financial stability despite the inability to work.
Future Protection (Pension Plan)
Future protection plans, as outlined in §3/1/15a EStG, refer to tax-optimized company pension plans. Employees can contribute up to €300 per year tax-free, and withdrawals after leaving the company are also tax-free, making it an attractive option for retirement savings.
Pension Fund / Company Collective Insurance
These are collective retirement savings schemes provided by employers, covering old-age, disability, and survivor benefits. Employer contributions are tax-deductible, and employees enjoy deferred taxation on contributions until retirement.
Pension Commitment/Direct Benefit Commitment
This is an individualized retirement provision model wherein the employer commits to providing old-age, disability, and survivor benefits based on a contribution-based structure. Tax benefits are available for both the employer and the employee, with taxation occurring only when benefits are paid out.
Severance Pay Outsourcing/Direct Insurance (Old System)
This involves outsourcing severance pay obligations to insurance providers, offering liquidity and balance sheet reduction benefits to the employer. Employees’ claims remain subject to the ‘old’ severance pay law, which may result in loss in case of self-termination.
Company Pension Funds (New System)
Introduced for employees joining after 2003, company pension funds offer retirement savings opportunities with potentially significant investment performance differences over the years. Employees may have the option to change funds annually without additional charges.
Employee Perks
- Support for physical and mental health: health programs, EAP (employee assistance programs), care management, etc.
- Transportation benefits: subsidized public transportation passes, commuter benefits, or parking discounts
- Educational assistance: financial assistance or reimbursement for employees pursuing further education or professional development courses relevant to their jobs.
- Company car or company vehicle
- Flexible working hours/Home office
- Company health management: fitness memberships, vaccinations, health screenings, or employee wellness programs
- Meal allowances or vouchers
- Employee discounts: discounts and perks for products or services offered by partner companies.
- Childcare/childcare allowance
- Sabbatical
This information about mandatory and supplemental employee benefits in Austria comes from Asinta’s Central and Eastern European Partner, the GrECo Group. If you need support with your benefits in the country please contact Asinta and we will put you in touch with the local experts at GrECo.