Quick Answer: What compensation models are there in Austria?
In Austria, the most common compensation models are fixed salaries, performance-related remuneration (bonuses, premiums), profit sharing, and flexible benefits. These are supplemented by statutory special payments such as the 13th and 14th salaries and the new severance pay.
The compensation models at a glance
From traditional salary structures to innovative flexible compensation packages, the Austrian job market offers a wide range of options for rewarding employees.
1. The traditional 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.
2. Performance-related remuneration: premiums, bonuses
Another common compensation model is performance-related pay, where employees receive additional bonuses 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.
3. Profit sharing
Profit sharing is a remuneration 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 remuneration of its employees, as they benefit directly from the company's financial performance. It motivates employees to work hard for the success of the company and to actively participate in achieving the company's goals. However, profit sharing can lead to lower remuneration in times of economic downturn, which can be frustrating for you as an employee.
4. Flexible compensation packages
In the wake of changes in the world of work, benefit models are becoming increasingly important. These models enable employees to tailor their salary package to their individual needs by choosing between different remuneration components, such as mobile phone expense reimbursement, travel expense reimbursement, 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 tailor their compensation 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.
Expert conclusion: Your path to optimal compensation
The Austrian job market offers you numerous opportunities to customize your salary. Whether it's a fixed salary, bonus, or flexible benefits, it's important that you ask specific questions during the application process and clearly state your requirements.
👉 Tip: Before salary negotiations, find out about the minimum wage for your industry as stipulated in the collective agreement.
Updated on September 29, 2025
FAQ: Remuneration models in Austria
What is the starting salary in Austria?
That depends heavily on the industry, education, and position.
Are 13th and 14th salaries mandatory?
Not by law, but they are guaranteed by almost all collective agreements—so they are de facto standard.
Which is better: a fixed salary or a bonus model?
A fixed salary offers security, while bonus models reward above-average performance. Many companies combine both.
What benefits are popular in Austria?
Home office, flexible working hours, further training, job tickets, health offers, and mobility budgets.
How does inflation affect salaries?
Many collective agreements include automatic adjustments. In addition, companies negotiate individual salary increases.
