Austrian severance pay: new scheme or old
Which of the two systems applies to your job, and what the calculator shows for each.
Which severance pay (Abfertigung) you are owed in Austria depends on when your job started. If it began on 1 January 2003 or later, the new scheme (Abfertigung neu) under the Company Employee Provision Act (BMSVG) applies; otherwise the old scheme (Abfertigung alt) under section 23 of the Salaried Employees Act, unless you signed a transfer agreement. Under the new scheme your employer pays 1.53 % of gross pay including the 13th and 14th salary into a provision fund (Betriebliche Vorsorgekasse, BV-Kasse); on €3,200 a month with 14 payments that is €685.44 a year, or €5,484 after eight years before any returns. Under the old scheme the employer pays a multiple of your last monthly pay: 2 months after 3 years of service, rising to 12 after 25. On the same salary, eight years would give €11,200 gross. Both are taxed at a flat 6 %. The calculator shows the fund balance with a return you assume yourself, and the number of months and amount for the old scheme.
Balance in the provision fund
€5,883
paid out at 6%: €5,530
| Contribution 1.53 % of 14 payments a year | €685.44 |
|---|---|
| Paid in, total | €5,484 |
| Balance with your return assumption | €5,883 |
| Wage tax 6% on payout | − €353 |
Payout possible if the employer ends the job or by mutual agreement; if you resign, the money stays in the fund and moves with you.
Checked by Radif Partners · Editorial policy · Calculation method
What the calculator shows for each scheme
Pick the scheme and enter your average monthly gross. For the new scheme it asks for the years paid into the provision fund and an assumed rate of return. It takes 1.53 % of 14 payments a year, as section 6 BMSVG requires, and deducts 6.0 % wage tax on payout. With the default values (€3,200, eight years, a two percent assumption) that is €5,883 in the fund and €5,530 net. It ignores the contribution-free first month, so the result is slightly high.
For the old scheme, years with the same employer count. The calculator picks the step under section 23(1) of the Salaried Employees Act, adds one sixth for special payments to the monthly pay and deducts 6.0 %. At €3,200 and eight years that is 3 months at €3,733.33, €11,200 gross and €10,528 net.
Old and new on the same salary
| Years of service | Old: months | Old: gross | New: contributions, no returns |
|---|---|---|---|
| 3 | 2 | €7,467 | €2,056 |
| 5 | 3 | €11,200 | €3,427 |
| 10 | 4 | €14,933 | €6,854 |
| 15 | 6 | €22,400 | €10,282 |
| 20 | 9 | €33,600 | €13,709 |
| 25 | 12 | €44,800 | €17,136 |
The old scheme rises in steps and rewards long loyalty to one employer; the new one grows evenly and follows you from job to job, which suits people who move around, including expats. How the provision fund works, when you can take the money and what the three contribution years mean is covered in the guide to the new severance scheme. When the old-scheme claim is lost, when it falls due and what happens on death is in the guide to the old severance scheme.
Moving from the old to the new scheme
According to the Business Service Portal, an employer and an employee hired before 2003 can agree in writing to switch to the new scheme from a set date. Either the entitlement earned so far is frozen, and that part stays under the old rules, including loss on resignation; or it is converted into a lump sum and transferred to the provision fund. From the switch date the employer pays 1.53 % either way. In the calculator, enter the years up to the switch for the old part and the years after it for the new part.
The flat 6.0 % tax is set out in section 67(3) of the Income Tax Act. If you claim unemployment benefit after losing your job, the unemployment benefit calculator works out the daily rate.