Severance Pay in Austria (Abfertigung): Abfertigung NEU vs Abfertigung ALT

Abfertigung is the Austrian term for statutory severance pay, money owed to an employee when an employment relationship ends. Austria currently runs two entirely separate Abfertigung systems side by side, depending on when the employment relationship began.

Contracts that started after 31 December 2002 fall under Abfertigung NEU, a defined-contribution system where the employer pays a fixed percentage into a fund every month. Contracts with continuous service reaching back before that date can still fall under the older Abfertigung ALT, a lump sum tied to a non-linear scale of completed years.

This page explains how each system works, the exact figures behind both, what happens to the money if an employee resigns, and a worked example of how NEU contributions accumulate over time.

Information last verified on 22 July 2026. This page provides general legal information about Austrian law and does not constitute legal advice in an individual case.

What Is Abfertigung

Abfertigung is a payment owed to an employee at the end of an employment relationship, on top of any final wages, unused leave payout or notice pay. It exists to cushion the transition between jobs and to recognise years of service already given to one employer.

Two systems currently coexist. Which one applies to a given employment relationship depends on a single date, not on the employee's current age, industry or contract type.

Which System Applies: the 1 January 2003 Cutoff

Abfertigung NEU, governed by the Betriebliches Mitarbeiter und Selbständigenvorsorgegesetz (BMSVG), applies to employment relationships whose contractually agreed start falls after 31 December 2002, meaning on or after 1 January 2003. Almost every employment relationship beginning today falls under this system.

Abfertigung ALT, governed by § 23 AngG for Angestellte, applies to continuous service that began before that cutoff. An employee whose current job started, say, in 1998 and has continued uninterrupted since then is still assessed under the older ALT scale for that service, unless they and the employer agreed to convert the arrangement into NEU, a separate opt-in process (Einfrieren or Übertragung) not covered on this page.

There is no third option and no automatic mixing of the two scales within a single continuous employment relationship. The date the relationship was agreed to start is what decides the system, not the date any particular dispute happens to arise.

Abfertigung NEU: How the BV-Kasse System Works

Under Abfertigung NEU, the employer does not owe a lump sum at the end of the job. Instead, from the start of the employment relationship, the employer pays a running monthly contribution to a Betriebliche Vorsorgekasse (BV-Kasse), a dedicated pension-style fund chosen for the employee.

The contribution rate is 1,53 percent of the employee's monthly Entgelt, plus any Sonderzahlungen such as the 13th and 14th monthly payment common in Austria. The first month of the employment relationship is always contribution free, and no contribution is owed at all if the whole relationship lasts one month or less.

Unlike ordinary social insurance contributions, this base is not capped. The Höchstbeitragsgrundlage under § 108 Abs 3 ASVG, which limits how much of a high salary is subject to pension and health insurance contributions, is expressly disapplied for the BV-Kasse contribution. A high earner's employer keeps paying 1,53 percent on the full Entgelt, with no ceiling.

The money belongs to the employee from the moment it is paid in. It sits in the BV-Kasse, is invested by the Kasse, and grows or is topped up according to that investment performance, subject to statutory guarantees on the Kasse's side. This page does not state an exact guaranteed return figure, since that detail depends on the specific Kasse and current regulation and should be confirmed with the fund itself.

Vesting: 36 Months to Unlock a Payout, Not to Earn the Money

A common point of confusion is when the Abfertigung NEU entitlement exists versus when it can actually be paid out. These are two different questions with two different answers.

The entitlement itself exists from day one. Every contribution the employer pays is immediately the employee's money, held in their individual BV-Kasse account.

What needs three Einzahlungsjahre, meaning 36 Beitragsmonate of contributions since the first payment, is the right to have that balance actually paid out when a job ends. If an employee leaves a job with fewer than 36 contribution months behind them, the balance is not lost and not forfeited. It simply stays in the BV-Kasse and carries forward.

This portability is sometimes called the Rucksackprinzip, the backpack principle. Contribution months from every employer an employee has worked for are added together toward the 36 month threshold, so changing jobs never resets the counter and never costs the employee anything already contributed.

Abfertigung ALT: The Pre-2003 Scale

Abfertigung ALT works completely differently. It is a single lump sum, calculated as a multiple of the employee's last month of Entgelt, and it only becomes payable once the employment relationship has lasted an uninterrupted three years or more.

The scale is not a smooth progression. It steps up at specific milestones and the size of each step is not consistent, which makes it easy to misstate from memory.

Notice the jump between 10 and 15 years of service: the multiple goes from 4 months straight to 6 months, skipping a 5-month step entirely. The basis for the calculation is the employee's Entgelt for the last month of the relationship, not an average over the years worked.

What Happens on Resignation

Whether resigning costs an employee their Abfertigung depends entirely on which system applies, and the two answers point in opposite directions.

Under Abfertigung ALT, an employee who resigns forfeits the entire lump sum. § 23 Abs 7 AngG denies the Abfertigung claim where the Angestellte gives notice themselves, subject to narrow exceptions in § 23a such as retirement eligibility or certain long-service and parental situations. This is the single highest-stakes fact for anyone with pre-2003 continuous service who is considering resigning rather than negotiating an exit some other way.

Under Abfertigung NEU, resignation does not destroy the money. The contributions already paid remain in the BV-Kasse and continue to carry forward to the next job under the Rucksackprinzip described above. What resignation does affect is the payout: § 14 Abs 2 Z 1 BMSVG excludes a payout specifically where the employee ends the relationship by resigning, so the balance stays locked in the Kasse until a later job ends in a way that does qualify, such as an employer-initiated dismissal, mutual agreement, or another recognised event.

A separate consequence applies regardless of which Abfertigung system covers the employee. Resigning voluntarily, or being dismissed for one's own fault, triggers a four week Sperre on Arbeitslosengeld under § 11 Abs 1 AlVG, meaning unemployment benefit is withheld for four weeks from the end of the relationship. An einvernehmliche Auflösung, a mutually agreed end date negotiated between employer and employee, is treated differently from a unilateral resignation for this purpose. Because neither party unilaterally quit, the Arbeiterkammer confirms this route does not trigger the same Sperre and requires no Kündigungsfrist to be observed, which is one reason it is commonly counselled as an alternative exit when both sides want to part ways.

Worked Example: Calculating Abfertigung NEU Contributions

Consider an employee with a monthly gross Entgelt of 3.000 euros who also receives the standard two Sonderzahlungen each year, meaning their annual income is effectively spread across 14 monthly payments rather than 12.

The annual BV-Kasse contribution base is 14 times the monthly Entgelt, or 42.000 euros a year. At 1,53 percent, the employer pays roughly 642,60 euros into the BV-Kasse for a full contribution year.

Over 10 years of continuous employment at this salary, and ignoring any salary increases along the way and the single contribution-free first month, the running total works out to roughly 1,53 percent multiplied by 14 multiplied by the monthly Entgelt multiplied by the number of years, or about 6.426 euros in contributions paid into the BV-Kasse.

This figure is the contributions paid in, not the eventual payout. The BV-Kasse invests the money over the years it sits in the account, so the amount actually available when the employee later cashes it out will differ from the raw sum of contributions, in either direction within whatever guarantee applies, depending on the fund's investment results. A calculator that only sums 1,53 percent of Entgelt over time is estimating contributions, never a final payout figure.

The Abfertigung-Rechner runs this same calculation for an employee's own salary and timeline, and states plainly that its output is an estimate of contributions paid, not a payout guarantee.

Abfertigung NEU and ALT at a Glance

How This Interacts With Notice Periods

Abfertigung is a separate entitlement from notice pay. The length of notice an employer or employee must give under § 20 AngG follows its own scale based on completed Dienstjahre, and it applies regardless of which Abfertigung system covers the employment relationship. See the notice periods page for the full Kündigungsfrist scale and how it differs for employer-initiated and employee-initiated notice.

Because the exit route matters so much for Abfertigung ALT specifically, and affects the Arbeitslosengeld Sperre regardless of which Abfertigung system applies, it is worth working out the notice and severance consequences together before deciding how to end a job, rather than treating them as unrelated questions.