The compensation models at a glance
From traditional salary structures to innovative flexible remuneration packages, the Austrian job market offers a wide range of ways to reward you for your performance.
The salary
The traditional compensation model, in which employees receive a fixed monthly salary, is widespread in Austria. In this model, remuneration does not depend on the individual, measurable performance of the employee, but is agreed in advance - when the employment contract is signed. Salary negotiations are based on factors such as the qualifications and experience of the applicant, the position to be filled and the branch of the company. Of course, there are always salary adjustments or salary increases over the years of service, the extent of which may well be based on your performance. However, the employer is obliged to adjust the minimum wage in accordance with the collective agreement.
Is your next salary negotiation coming up? With our 10 tips, it will be a success.
Performance-related remuneration: Premiums, bonuses
Another common compensation model is performance-related pay, where employees receive additional bonuses or awards based on their performance. This model motivates employees to work harder and achieve better results, as their pay is directly linked to their performance. Companies can set performance targets that are individually tailored to their employees to boost motivation and increase productivity. However, implementing this model can be complex and requires accurate performance evaluation.
Profit sharing
Profit sharing is a compensation model in which employees receive a share of the company's profits. This model creates a direct link between the company's success and the employee's remuneration, as they benefit directly from the company's financial performance. It motivates employees to work for the success of the company and to actively participate in achieving the company's goals. However, profit sharing can lead to lower pay in economically difficult times, which can be frustrating for you as an employee.
Flexible compensation packages
As the world of work changes, flexible remuneration packages are becoming increasingly important. These models allow employees to adapt their salary package to their individual needs by choosing between different remuneration components, such as cell phone allowance, travel allowance, additional vacation days or the option to work from home. Flexible compensation packages increase employee satisfaction and loyalty to the company, as they have the opportunity to adapt their remuneration to their personal circumstances.
Treats under Austrian law
In Austria, there are some additional benefits that employees usually receive, such as special payments or the new severance payment.
Christmas and vacation pay
Most companies in Austria grant employees a 13th and 14th monthly salary. These additional wages - called Christmas and vacation bonuses - are usually paid in May/June and November. You can find out more in our article: The tradition of the 13th and 14th monthly salary: A look at Austria's working world.
Severance pay new
Your employer is obliged to pay part of your gross salary to the Austrian Health Insurance Fund from the 2nd month of your employment, which then forwards this to the company pension fund. If you leave the company, you are entitled to the amount paid in under certain conditions. You can find out what these conditions are and everything else you need to know about new severance pay here: New severance pay | Chamber of Labor.
