It is essential for companies planning to run Payroll Services in Austria to have a clear plan and make the right moves from day one. The Republic of Austria is among the world’s wealthiest nations with a high standard of living. At the same time, its geographical location puts it at the heart of Europe’s trade corridors, stretching north, south, east and west. The potential is enormous, but so are the challenges. Payroll is one of them, and companies planning to operate payroll for their staff often first open a subsidiary in the country. Taking the proper steps from day one is vital for long-term success.
Setting up a subsidiary in Austria to run payroll is one option, but this involves a protracted registration process and poses many challenges. Our Professional Employment Organisation (PEO) and Employer of Record (EOR) services provide complete solutions to every issue your company will face before your planned move into the Austrian Market. Our teams step in from the start, locating top-rated talent in Austria, then guiding you through such procedures and navigating the administration of the Austrian payroll system for you.
Remote payroll – This option allows businesses to operate under a single payroll system by adding employees in Austria to the parent company’s payroll. However, these employees must operate under different regulations, which is likely to cause problems.
Internal payroll – You may operate payroll for your subsidiary, especially if you are committed to growing your company’s presence in Austria. However, this does require hiring dedicated HR staff who understand Austria’s employment and compliance laws.
Austria payroll processing company – If you are considering outsourcing, then working with an Austrian payroll company will help in processing your payroll – but not when it comes to compliance.
Austria payroll outsourcing – However, another option is available to solve both concerns – by working with Bradford Jacobs. We can handle payroll and compliance for all your employees in Austria. We lift the administrative stress from your shoulders so you can focus on what you do best.
Austria’s robust economy is 28th in the world, with a nominal Gross Domestic Product of US$481.21 billion in 2021, predicted to grow by 4.9% in 2022. Further, Austria is a wealthy nation, ranked 13th in the world with a per capita GDP of US$53,973 and sixth in the European Union (EU). Foreign companies planning to expand their international horizons by moving into Austria can capitalise on its location in Southern Central Europe.
The economy is a stable mix of industry and manufacturing, a strong service sector, agriculture and a tourism market that places Austria on the fringe of the world’s top 10 most-visited holiday destinations. The potential is clear but making a move comes with challenges and pitfalls. Initially, these will revolve around payroll, employment legislation and taxes, whether companies move their staff into the country or recruit locally.
Making mistakes will be costly in time and money. The demands are even more significant when foreign companies establish a subsidiary as their route into Austria – a legal requirement before hiring staff and operating payroll. When launching a subsidiary, investors usually open the equivalent of a private limited liability company, known as a GmbH. It is incorporated through the Commercial Register, operates under the Austrian Company Act and follows the Code of Corporate Governance, which sets out the management rules.
Once the company incorporation process moves, employers must prepare to register employees. The procedure includes the following:
Note: Nationals from European Union (EU) nations and those from the European Economic Area (EEA) nations of Iceland, Norway and Liechtenstein, plus Switzerland, have free access to the Austrian employment market and do not require authorisation from labour market authorities in most cases.
The private limited liability company (GmbH) is the most popular business structure for foreign companies establishing a subsidiary in Austria. It is incorporated through the Commercial Register, operates under the Austrian Company Act and follows the Code of Corporate Governance, which sets out the management rules.
Procedures for incorporation include the following steps:
Note: A GmbH ‘privileged at foundation’ is to encourage start-ups with limited financial resources and can have a minimum share capital of €10,000 (US$9,970) with €5,000 (US$4,985) paid in cash. The ‘privileged’ period ends after ten years when share capital must comply with regulations.