Key takeaways
- Employers must pay posted workers at least the minimum wage set by the relevant Austrian collective agreement.
- A ZKO3 notification, or ZKO4 for hiring out, must be submitted before the posted worker begins work in Austria.
- In 2026, postings are exempt from notification if the gross monthly salary is at least €8,085 paid 14 times a year.
- Failure to keep required documents on-site can result in administrative penalties of up to €20,000.
- Underpayment of posted workers can lead to capped administrative penalties of up to €400,000.
Introduction to Austria's LSD-BG Compliance
Sending employees to work in Austria requires strict adherence to local labor standards. Under Austria's Wage and Social Dumping Combating Act (LSD-BG), foreign employers posting workers to the country must pay them at least the minimum wage established by the relevant Austrian collective bargaining agreement, known as the Kollektivvertrag, for their specific sector. This rule applies regardless of the law governing the employment contract.
The Austrian authorities actively police compliance. Standardizing pay across borders means you cannot simply rely on home-country pay scales or general European averages. Every sector has its own Kollektivvertrag, and identifying the correct agreement is the first mandatory step for any cross-border posting.
Understanding the 13th and 14th Salary Requirements
Matching the basic hourly rate of the Kollektivvertrag is only part of the financial obligation. Most Austrian collective bargaining agreements entitle employees to two extra monthly payments per year. These are the 13th salary, known as Urlaubsgeld or holiday pay, which is typically paid in June, and the 14th salary, known as Weihnachtsgeld or Christmas bonus, which is paid in November.
For foreign employers, calculating these payments for temporary postings requires careful accounting. If a posted worker does not work the entire calendar year in Austria, they must be paid a pro-rata, or aliquot, share of both the 13th and 14th monthly salaries. This calculation is based strictly on the number of months or days worked during the Austrian posting.
These special payments benefit from a preferential flat tax rate of just 6% under Austrian tax law. This low tax rate makes the net payout higher for the worker while keeping the structure compliant with Austrian payroll standards. Employers must ensure their home-country payroll systems can process these specific allocations correctly.
Additionally, employers must monitor the total duration of the deployment. Under Austrian labor law, if a posting exceeds 12 months, the employer must apply the full provisions of Austrian labor law if they are more favorable to the worker. This is known as the principle of favorability. Tracking the 12-month limit is vital to prevent unexpected shifts in employment terms, leave entitlements, and working hour restrictions.
Sources & further reading
- 01Austrian Posting of Workers Platform vertexaisearch.cloud.google.com
- 02Austrian Federal Ministry of Finance vertexaisearch.cloud.google.com
