Hiring in Germany from Austria: guide for Austrian firms

An Austrian company can employ someone who lives and works in Germany without a German subsidiary, but German law then governs much of the job: the person is subject to German social-security law, the company needs a Betriebsnummer and a representative based in Germany, and the statutory minimum standards of German employment law generally apply. The route changes if the person is a border-zone commuter under Article 15(6) of the Germany-Austria double-tax treaty, a regular teleworker under the multilateral framework agreement or an existing Austrian employee posted to Germany with a PD A1 requested through ELDA. Compare direct employment, genuine contracting and an Employer of Record (EOR) once the real work pattern is fixed.

Quick answer

Is this a German local hire, commuter, teleworker or posting?

Record where the person lives, where work is physically done, the expected split of days, the contract duration and whether the person is already employed by the Austrian company.

• A German local hire lives and works in Germany on an ongoing basis. This is the main case of this guide.
• A border-zone commuter has a main home in the border zone and usually works in the border zone, for example at the Austrian workplace. The treaty rule is about taxation, not about social security.
• A hybrid teleworker lives in Germany and works partly at home and partly at the Austrian workplace.
• A posted employee keeps an existing Austrian employment and works in Germany for a limited time. The A1 certificate guide explains the form itself.

A Swiss company in the same position should read hiring in Germany from Switzerland, because the treaty and telework route differ. For wider EU questions see hiring in the EU from Austria.

Does German social-security law apply to an Austrian employer?

According to DVKA (page updated 26 May 2026), a person who works exclusively in Germany is subject to German social-security law, also where the employer is based abroad, and the foreign employer must pay the German contributions. Health, care, pension and unemployment contributions go to the health fund (Krankenkasse) where the employee is insured. Accident-insurance contributions go to the competent accident-insurance institution, and minijobs go to the Minijob-Zentrale.

Employer and employee can agree in writing that the employee pays the contributions. The legal basis is Article 21(2) of Regulation (EC) No 987/2009: an employer without a place of business in the competent state may agree with the employee that the employee pays the contributions on the employer’s behalf, without prejudice to the employer’s underlying obligations. The employer sends the agreement to the competent institution. It is optional, and the DVKA glossary states that liability for contributions and reports stays with the employer.

Do not rely on § 28m SGB IV for this. Its Abs. 1 makes the employee the payer only where the employer is a foreign state, an international organisation or a person not subject to German jurisdiction that does not pay. An ordinary Austrian company is not covered by that wording.

Which German registrations does the Austrian company need?

• Betriebsnummer. The Federal Employment Agency states that employers with a seat abroad also need one when they employ people for whom reports to German social insurance are due. The application form asks whether the employer has office space in Germany and expressly does not count an employee’s home office. Its guidance is dated 2016, so use the current application page of the Betriebsnummern-Service. If the employee has taken over the contribution duties under Article 21(2), the number applies only to that employee.
• Representative in Germany. Under § 28f Abs. 1b SGB IV an employer without a seat in Germany must appoint a representative with a seat in Germany to fulfil the payroll-record duties of Abs. 1 Satz 1; the DVKA FAQ adds that the representative also files the social-security reports. The DVKA glossary notes that this can be a tax adviser or the employee, and that liability remains with the employer.
• Electronic reports. § 28a SGB IV requires the employer or another obliged party to report to the collection point (Einzugsstelle) at the start and end of insured employment, among other events. An immediate report (Sofortmeldung) to the pension-insurance data centre at the start of work is required by § 28a Abs. 4 SGB IV for employers in listed sectors such as construction, hospitality, transport and logistics, building cleaning and security; the Federal Employment Agency says that otherwise the health fund decides whether one is due.
• Payroll records. § 28f Abs. 1 requires German-language payroll records (Entgeltunterlagen) kept in Germany.

Does the Austrian company have to withhold German wage tax?

Under § 38 Abs. 1 EStG, German wage-tax withholding applies where the employer is an “inländischer Arbeitgeber”: it has a residence, habitual abode, management, seat, Betriebsstätte or permanent representative in Germany. An Austrian company with none of those links is not an inländischer Arbeitgeber and has no German withholding duty under this provision. Whether an employee’s home office or a dependent agent creates a Betriebsstätte or permanent representative is a separate question for a German tax adviser; see the guide on permanent establishment and remote employees.

The absence of German withholding does not settle the employee’s own tax position. How it is handled, and which Austrian payroll reporting remains, should be confirmed with a Steuerberater or the competent Finanzamt before the first payment.

The treaty decides which state may tax. Under Article 15 Abs. 1 of the Germany-Austria treaty, employment income is taxed in the residence state unless the work is performed in the other state. The 183-day rule in Abs. 2 only protects work in the state where the person does not live, so it is not a shortcut for a German resident working in Germany.

How does the Austria-Germany commuter rule work?

Since 28 December 2023, Article 15 Abs. 6 allows taxation only in the residence state if the person has a main home near the border in that state and usually works near the border. Item 8 of the protocol defines “near the border” as municipalities wholly or partly within a zone of 30 kilometres on each side of the border. Work is usually done there if the person works on at most 45 working days a year wholly or partly outside the zone, and those days do not exceed 20 percent of actual working days.

The BMF consultation agreement of 20 December 2023 adds that the rule requires living and working in the zone, but not daily commuting across the border, and that it does not matter whether the employee works in the residence-state zone (for example at home) or in the other state’s zone. If the status lapses, for example by exceeding 45 days, Article 15 Abs. 1 to 3 apply again and taxation is split.

The consultation agreement is an interpretation agreed between the authorities, not the treaty text; check the municipality annexes and day count.

What changes for regular telework between Germany and Austria?

DVKA and the Austrian social-insurance umbrella body both confirm the multilateral framework agreement on cross-border telework, in force since 1 July 2023. Where its conditions are met, an application under Article 16(1) of Regulation (EC) No 883/2004 can keep the employer state’s law when telework in the residence state is between 25 percent and less than 50 percent of total working time, with no third state involved. Each agreement covers at most three years and can be extended by a new application.

In Austria the Dachverband checks the application, and the Austrian health insurer then issues the PD A1. The route is an application, not an automatic result, and it concerns social security only; tax follows the treaty.

What applies to a posting from Austria to Germany?

A posting is a different case from a local hire. According to USP (updated 27 July 2026), posted employees stay insured in Austria if, among other conditions, they were subject to Austrian law for one month immediately before the posting, the posting is expected to last no more than 24 months, they do not replace another posted person and the company carries on substantial activity in Austria. A person newly hired in Germany for a German role typically does not fit this route. Beyond 24 months an exception agreement can be sought. Applications for the PD A1 go exclusively through ELDA.

Other German duties are separate:

• German minimum wage applies to the posted employee.
• Zoll requires a written notification under § 16 MiLoG with the MiLoMeldV only for postings into the sectors listed in § 2a SchwarzArbG (for example construction, hospitality, transport and logistics, building cleaning, security), and under § 18 AEntG where AEntG working conditions monitored by Zoll apply. Foreign staffing agencies have their own notification duty (§ 16 Abs. 3 MiLoG, § 18 Abs. 3 AEntG). Zoll directs employers to file online through the Meldeportal-Mindestlohn.
• For wage tax, a German receiving company that bears the pay economically is an inländischer Arbeitgeber under § 38 Abs. 1 Satz 2 EStG.

Which German employment rules go into the contract?

• Written terms. Under § 2 Nachweisgesetz the employer must record the essential terms in writing, sign and hand them over; electronic form is excluded. Text form with electronic transmission can be used if the employee can access, store and print the document and the employer asks for a receipt, but the employee can demand the signed written form, and text form is not available for employees in the § 2a SchwarzArbG sectors. Deadlines are staged: first working day, seventh calendar day or within one month of the agreed start, depending on the term.
• Minimum wage. BMAS states a minimum wage of EUR 13.90 gross per hour since 1 January 2026. Check the BMAS page for later rates.
• Leave. § 3 Bundesurlaubsgesetz sets at least 24 Werktage a year. Werktage are all days except Sundays and public holidays, so this is based on a six-day week. On a five-day week it works out to 20 days (our calculation).
• Dismissal protection. Under § 23 KSchG the general protection does not apply to a Betrieb with in der Regel ten or fewer employees (for employment starting after 31 December 2003); part-timers working up to 20 or up to 30 hours a week count as 0.5 or 0.75, and trainees are not counted. How a single German employee of an Austrian company is counted needs German employment-law review.

This guide assumes the person has the right to work in Germany; confirm that with the competent authority if status is unclear.

What does this mean for your hiring model?

For the general comparison of the three models, see hiring employees abroad: employee, contractor or EOR.

Why is contractor status not a contractual choice?

The Clearingstelle of German Pension Insurance decides on application, under § 7a SGB IV, whether a relationship is dependent employment or self-employment, on an overall assessment of the case. The procedure can be run in advance, before the activity starts. A contract label does not decide the outcome. See the guide on false self-employment and contractors abroad before choosing this model.

When may an EOR help?

An EOR may help when employment is the right relationship, the group has no suitable German employer and the company does not want to run the direct foreign-employer registrations. Lending an employee to another company generally requires a permit under the Arbeitnehmerüberlassungsgesetz (AÜG) before the lending starts, according to the Federal Employment Agency. Ask any provider for written proof of its permit. Employer of Record in Germany explains the AÜG permit, the 18-month limit and equal treatment.

In Deel’s dated EOR workflow, Deel is selected as legal EOR. The flow asks for country, location, visa needs, title, seniority, job scope, compensation and work arrangement, and it includes role and location restrictions before quote and agreement review. Obtain written confirmation for the exact German location, role and employing entity.

If the model fits after comparison, ask Deel about EOR options in Germany (opens in a new tab). Compare the written proposal with direct foreign-employer payroll and any German group entity.

When may an EOR not fit?

An EOR may not fit when the group already has a suitable German entity, when running the Betriebsnummer, representative and reports directly is manageable, when the work is genuinely independent and a status procedure supports that, or when an existing Austrian employee is on a temporary posting with a PD A1. A provider may also decline the exact role. An EOR does not decide the company’s permanent-establishment position.

What requires a separate corporate-tax review?

Neither direct employment nor an EOR decides whether the Austrian company creates a German permanent establishment. Ask a German tax adviser to review the worker’s authority, sales role, workspace and the business reason for working in Germany, and reopen the conclusion when duties or locations change.

Key terms

Employee

A worker engaged under a local employment contract, with the employer responsible for payroll, social security contributions and compliance with local labour law.

Contractor

A self-employed individual or business engaged for specific services under a commercial contract, without the employment protections or payroll obligations that apply to employees.

Employer of Record (EOR)

A third-party provider that legally employs a worker on behalf of a client company in a country where the client has no local entity, handling local payroll, contracts and compliance.

Permanent establishment

A tax concept describing a fixed place of business or sufficient business activity in a country that can trigger local corporate tax obligations for a foreign company.

Misclassification

Treating a worker as a contractor when, based on the actual working relationship, local law would classify them as an employee, which can create back taxes, penalties and employment claims.

Final checklist

• Separate German local hire, border-zone commuting, regular telework and temporary posting.
• If German social security applies, obtain a Betriebsnummer, appoint a representative in Germany and set up the electronic reports.
• Use an Article 21(2) agreement only as an optional process arrangement; employer liability stays.
• Check the treaty day counts and the 30 km zone before assuming commuter tax treatment.
• For postings, apply for the PD A1 through ELDA and check whether the sector triggers a Zoll notification.
• Issue written terms under the Nachweisgesetz and set pay at or above the minimum wage.
• Review permanent establishment separately from the choice of legal employer.
• If an EOR remains appropriate, ask Deel about EOR options for your Germany hire (opens in a new tab) and compare the written answer with an alternative.