Letter from the table: Magdalena Gruber on the cost of a first hire

RC/TM/2026/T.7
22 October 2026
Table letter — stance: amend

Dear Team Council,

I want to amend the First Ten Hires proposal, not abandon it. Please make the first-hire relief work alongside the cashflow problem that often comes just before a small employer decides whether they can afford a person.

On 3 August, I made an offer to someone I had been hoping to bring on for months. The agreed monthly gross pay was €1,650 for the hours we discussed. I had put aside enough for that number. I had not put aside enough for all the other numbers that arrive with it.

Before the employee could start, I needed to settle the correct classification and pay under the applicable collective agreement. Austria does not have one general statutory minimum wage; minimum rates are generally set through sectoral collective agreements. I asked my payroll adviser to check the classification rather than guess. That was the right thing to do, but it meant I could not treat the gross wage in my offer as the whole cost of employing someone.

On 18 August, the payroll estimate came back: about €2,140 a month on average when employer charges and the cost of the 13th and 14th payments were accounted for. The estimate was specific to my circumstances, not a universal Austrian rate. There was also a €96 setup charge and a monthly payroll fee. Those amounts were not shocking on their own. Together, they changed the decision. I had planned around

€1,650; I now had to plan around a recurring cost closer to €2,200, plus the work of getting the administration right.

I did not want to make the employee carry this uncertainty. I asked my adviser to confirm the collective-agreement classification, spoke with the relevant local business-advice service, and arranged the payroll. The employee had to be registered with the Austrian Health Insurance Fund (ÖGK) before starting, using the electronic reporting system. We completed that registration on 31 August for a 1 September start. I also asked the adviser to map the related reporting and payment dates, rather than assume they all fell due at the same time.

The salary estimate was only half the story. One customer owed me €3,400 on an invoice due 30 September. It was paid on 16 October. While I waited, the new employee still needed to be paid on time, and I had to keep enough money available for payroll charges and ordinary operating costs. The customer’s delay did not reduce the work or the obligation. It reduced the cash available to meet them.

This is where I see a direct connection with the Cashflow Council’s work. A payment delay can become a hiring barrier even when the employer has found the right person and has enough expected income over the year. The Team Council is looking at the cost and process of employing someone; the Cashflow Council is looking at when money actually arrives. For a very small employer, those are not separate problems. They meet in the bank account on the same day.

My diary entry for 16 October was not “Can this job ever pay for itself?” It was “Can I keep the promise I made while the money I am owed is still missing?”

I understand why employment contributions exist. They support protections and services that matter to employees and to society. I am not asking for a new employee to lose coverage, or for unpaid contributions to become

someone else’s problem. I am asking for the public system to recognise that the first formal hire has a different risk profile from the fiftieth. The employer is learning the registration and payroll process, and has not yet built up the cash reserves that make routine costs routine.

Please amend the First Ten Hires approach in three ways:

• Make any phased reduction or credit apply automatically to eligible small employers’ first ten hires, with clear eligibility rules and a predictable end date. Do not make a first-time employer discover the relief only after hiring or paying for specialist advice.

• Provide one guided registration route that connects the employer’s required payroll and social-insurance steps, explains what must be done before the first working day, and gives a dated schedule of what is due next. ÖGK registration before work begins is a necessary rule; the surrounding process should not require an owner to assemble the rest from scattered instructions.

• Design the relief so it supports cashflow as well as lowering the total cost. A credit that arrives long after the employer has paid wages and charges may help the annual accounts but fail at the moment the hiring decision is made. Coordinate this with the Cashflow Council’s work on payment timing, while keeping employee wages and protections intact.

I know a simpler route cannot remove every cost or guarantee that every new job will work out. Nor should small employers be exempt from understanding the rules. But the rules should be legible before the commitment, and the first months should not make a modest business choose between paying correctly and keeping enough working cash to operate.