Severance Pay in Austria in 2026: Understanding the Abfertigung neu System

In Austria, severance pay is not a one-off payment from your employer. Instead, savings build up each month in a dedicated fund. This guide explains who is covered, how much the employer pays and when you can access the money.

Abfertigung neu at a glance

• The new severance system, Abfertigung neu, applies to employment relationships that began on or after 1 January 2003.
• The employer pays 1.53 percent of monthly pay and special payments. The first month of employment is exempt from contributions.
• The savings are not lost when employment ends, including when you resign yourself.
• You can generally access the money after three contribution years and when employment ends for certain specified reasons.
• You must notify the fund in writing within six months after employment ends.

Who is covered by Abfertigung neu?

If your employment began on or after 1 January 2003, the new system applies to you. It is governed by the Betriebliches Mitarbeiter- und Selbständigenvorsorgegesetz (BMSVG), the law on occupational provision for employees and self-employed people.

Since 1 January, freie Dienstnehmer are also included in the system. This applies to freie Dienstnehmer relationships that are subject to compulsory insurance under the Allgemeines Sozialversicherungsgesetz (ASVG) and last longer than one month. It also covers freie Dienstnehmer relationships that were already in existence on 31 December 2007.

Every employer is responsible for making contributions, including EU companies operating in Austria.

How are the severance savings built up?

The system is contribution-based. The employer pays contributions on monthly pay (Entgelt) and any special payments (Sonderzahlungen).

• Contribution rate: 1.53 percent of monthly pay and special payments
• Starting point: the beginning of employment, although the first month is contribution-free
• Collected by: the responsible health insurance provider
• Paid into: the fund selected by the employer

The fund is called a Betriebliche Vorsorgekasse (BV-Kasse), or occupational provision fund. There are eight such funds in Austria, and the employer generally decides which one to contract with.

Severance savings also build up during certain periods listed in the law when the employment relationship continues but no pay, or reduced pay, is received. Examples include military, training or civilian service; periods during which you are entitled to maternity allowance (Wochengeld) or sickness benefit (Krankengeld); and periods when childcare benefit (Kinderbetreuungsgeld) is paid. In these cases, the employer or the Familienlastenausgleichsfonds pays into the fund.

Unlike the old system, where the amount increased in steps, your entitlement grows continuously under Abfertigung neu.

When can you receive the money?

Two conditions must be met at the same time. First, at least three contribution years must have accumulated since the first contribution or the last time you exercised your right to dispose of the money. Periods accumulated with different employers are added together.

Second, the employment relationship must end in one of the following ways:

• termination by the employer (Kündigung),
• lawful or faultless dismissal with immediate effect (Entlassung),
• lawful early departure by the employee (berechtigter vorzeitiger Austritt), including departure because of childbirth (Mutterschafts- or Vaterschaftsaustritt),
• termination by mutual agreement (einvernehmliche Auflösung),
• expiry of a fixed-term contract (Zeitablauf),
• the employee’s death.

In the event of death, the spouse or registered partner, as well as children for whom family allowance (Familienbeihilfe) is paid, are always entitled to payment. This is known as Todfallsabfertigung.

What happens if you resign?

You do not have the right to dispose of the money if you resign, leave without an important reason, are dismissed because of your own fault or have not accumulated three contribution years. An exception applies when you resign during part-time work under the MSchG or the VKG.

The money is not lost in these situations. It remains in a contribution-free severance account with the existing fund and continues to be invested.

The rules are more favourable when you retire. If you receive your own pension, such as an old-age pension (Alterspension) or corridor pension (Korridorpension), or reach the age threshold for an early old-age pension or corridor pension, you can dispose of the money in any event. This also applies if employment ended in an unfavourable way or you do not have three contribution years.

What options do you have?

If you are entitled to exercise your right to dispose of the money, you have four options:

1. receive the severance payment,
2. continue investing it with the existing fund,
3. transfer it to the new employer’s fund,
4. transfer it to an institution providing retirement benefits, such as a pension fund (Pensionskasse).

If you do not make a declaration, the savings are moved to a contribution-free account and the fund continues to invest them.

The invested amount is protected by a capital guarantee (Kapitalgarantie): when you exercise your right to dispose of the money, you will receive at least the amount paid in by the employer. The procedure is free of charge and there is no official form.

How and when must you notify the fund?

You must notify the fund, not your employer, of your decision. You have six months after employment ends to state your choice in writing.

• Notify the fund: in writing within six months after employment ends
• Fund payment: within five working days from the end of the second calendar month following the application

Example

The employment relationship ends on 18 March 2012. The decision must be submitted in writing by 18 September 2012 at the latest. If the application is submitted on 15 May 2012, the fund must pay by 6 August 2012 at the latest (5 August fell on a Sunday).

Frequently asked questions

Is the severance contribution deducted from my salary?

No. The employer pays the 1.53 percent contribution. The health insurance provider collects it and forwards it to the fund.

Do I lose the money if I change jobs?

No. The accumulated savings remain yours regardless of how employment ends and regardless of the length of employment.

What happens if I do not tell the fund what I want?

The money is transferred to a contribution-free severance account and the fund continues to invest it.

How many severance funds are there in Austria?

There are eight. The employer generally chooses which fund to contract with.

Practical steps

1. Check when your employment relationship began and whether Abfertigung neu applies.
2. Identify your employer’s Betriebliche Vorsorgekasse (BV-Kasse).
3. Check whether at least three contribution years have accumulated, including periods with previous employers.
4. Confirm how your employment ended and whether it gives you the right to dispose of the savings.
5. Send your written decision directly to the fund within six months after employment ends.
6. If you need professional advice, contact a lawyer, legal adviser, health professional, employment-law or employment-services specialist, or another relevant professional.

This article is based on sources available online and does not constitute advice. Use it at your own risk. Source: usp.gv.at