Whether you are entitled to severance pay depends on when your employment relationship began. If it began on or after 1 January 2003, the new scheme under the BMSVG applies. Your employer pays around 1.53% of your gross remuneration into an occupational severance and retirement fund on an ongoing basis, and you keep the balance. For contracts that began earlier, the old scheme applies: as a rule, you become entitled after 3 years of service, and the amount rises with length of service (roughly 2 to 12 months’ remuneration). How the employment ends can affect your entitlement.
‘Will I get severance pay – and if so, how much?’ Many employees only ask themselves this question when their employment comes to an end. The answer depends above all on one date: the date your employment began. Since 1 January 2003, Austria has had a different system from the one that applied before. On this page, we explain in plain terms when you are entitled to severance pay, how the ‘old’ and the ‘new’ scheme differ, and what disputes are most often about in practice.
Severance pay under the NEW scheme (BMSVG) – the system from 2003
For employment relationships that began on or after 1 January 2003, severance pay under the new scheme applies, as set out in the Federal Act on Corporate Staff and Self-Employment Provision (BMSVG). The basic principle is simple: from the 2nd month of employment, your employer pays 1.53% of your gross monthly remuneration (guideline figure) into an occupational severance and retirement fund on an ongoing basis. The fund invests the balance for you.
The key difference from the old scheme: the balance you build up ‘moves with you’. You keep it even if you change employer – regardless of who ended the employment relationship.
Payout and access to the balance
You cannot access the balance whenever you like. A payout is generally possible only if certain conditions are met – for example, after a minimum number of contribution years and for certain types of termination. Otherwise, you can leave the balance in the provision fund, where it will continue to be invested, or transfer it to a new fund.
Severance pay under the OLD scheme – for contracts before 2003
If your employment relationship began before 1 January 2003 and was not transferred to the new scheme, severance pay under the old scheme applies. Under this scheme, your employer does not pay ongoing contributions into a provision fund. Instead, your employer pays the severance pay only when the employment relationship ends – and only if certain conditions are met.
As a rule, you only become entitled after 3 years of service, and the amount is tiered by length of service: the longer the employment relationship lasted, the more months’ remuneration you are entitled to.
| Continuous service | Severance pay (guideline, in months’ remuneration) |
|---|---|
| 3 years or more | approx. 2 months’ remuneration |
| 5 years or more | approx. 3 months’ remuneration |
| 10 years or more | approx. 4 months’ remuneration |
| 15 years or more | approx. 6 months’ remuneration |
| 20 years or more | approx. 9 months’ remuneration |
| 25 years or more | approx. 12 months’ remuneration |
The scale is a guideline. Each individual case needs to be checked – special payments (the 13th and 14th monthly salaries), the basis of calculation and the type of termination all play a role.
When are you entitled to severance pay?
Whether you are entitled to severance pay, and how much, depends on two questions: which system applies (old or new) and how the employment relationship ends. Under the old scheme, the type of termination is particularly important, because it decides whether you are entitled at all. Under the new scheme, the balance you have built up is generally secure, but whether it can be paid out depends on certain conditions.
The situations that typically matter are termination with notice by the employer, termination by mutual agreement, a justified premature resignation for good cause and retirement. By contrast, resignation by the employee and a summary dismissal due to the employee’s fault can put your entitlement at risk under the old scheme.
Common points of dispute
Resignation by the employee
Under the old scheme, resignation by the employee can mean losing the entitlement to severance pay. This is exactly where many disputes arise – for example, when it is unclear whether the employee really resigned or whether the employment ended in a different way. Under the new scheme, by contrast, you keep the balance you have built up; however, an immediate payout after you resign is not always possible.
Summary dismissal
A justified summary dismissal due to the employee’s fault can cost you your severance pay under the old scheme. Conversely, if the employer dismisses you without justification, your entitlement to severance pay remains – and the dispute then often turns on whether there really was a ground for summary dismissal. A careful legal review is worthwhile here, because a lot depends on it.
How we help
We check which severance pay scheme applies to you, whether you are entitled and how much you can realistically expect – clearly, in plain terms and without false promises. We pursue your claim both out of court and before the Vienna Labour and Social Court (ASG Wien) – for example, if your severance pay has not been paid or there is a dispute about how the employment ended.
Contact: Teamanwälte, Mag. Johannes Bügler · Baumgartenstraße 82, 1140 Vienna · Phone +43 1 419 13 18 · office@teamanwaelte.at. Make an appointment for an initial assessment of your entitlement to severance pay.
For an overview of the whole area, see our page on Employment & social security law. Related topics: Challenging a termination and Summary dismissal.
Note: This page provides general information and does not replace legal advice on your individual case. The amounts, percentages and scales given are guidelines and must be checked in each individual case. We do not guarantee any particular outcome. For a binding assessment of your entitlement, please book a personal consultation.