An hour of work has many prices: what it costs the employer, what appears on the payslip, what arrives net, and how much of it can really be consumed once VAT is paid. Here you can see the complete chain, the comparison of employment, sole proprietorship and GmbH, and an adjustable household budget.
Regular monthly pay: the employer's true costs on the left, what remains on the right.
Annual view with two equal special payments, before employee tax assessment. Preferential taxation within the annual one-sixth limit; not a flat 6% of gross pay.
This model assumes an adult employee working in Vienna throughout the year, with twelve equal monthly salaries and two special payments. A 13th and 14th salary is not a universal statutory entitlement; collective agreements and employment contracts are particularly relevant. Weekly hours only convert the amounts into hourly figures; they do not check collectively agreed minimum pay.
Wage tax is income tax withheld by the employer. The 2026 marginal rates are 0% up to €13,539, followed by 20%, 30%, 40%, 48%, 50% and 55% above €1 million. Each rate applies only to the portion in its bracket. The basis is taxable income, not total gross pay including special payments.
Standard regular employee contributions in Vienna total 18.32%, including the 0.75% housing contribution. Lower salaries have reduced unemployment contributions. The contribution ceiling is €6,930 per regular month and €13,860 annually for special payments. Special payments carry neither the Chamber of Labour levy nor the housing contribution.
Employer charges include 21.23% regular social insurance up to the ceiling, plus 1.53% severance-fund contributions, 3.7% family equalisation fund contribution, Vienna’s 0.36% surcharge and 3% municipal tax. The latter four standard charges are not capped at the insurance ceiling. Vienna’s separate employer levy, the e-card service fee, sector-specific levies and exceptions are omitted.
Results are payroll amounts before employee tax assessment. The €496 employee transport tax credit and €132 work-expense allowance are included. The supplementary tax credit, social insurance refund, family bonus, commuter allowance and personal deductions are not. Final annual net income can therefore be higher, particularly at low incomes.
A customer pays an amount. They can pay it to a self-employed person, or spend it as an employer on an employee. This page follows the same euro down both routes to the net figure, on the law as it stands in 2026: VAT, social insurance under GSVG and ASVG, the progressive income tax schedule and wage tax including the favoured 13th and 14th salary.
Self-employed on the left, employed on the right. Both columns are the same height because the customer pays the same both times. Green is what arrives.
Equal payer budget, not equal working hours or services. Employee-side overhead is not modelled; business expenses apply only to self-employment. Net values exclude personal tax assessment and any SVS health-contribution credit. Fund contributions include severance provision, not only taxes.
The share of the customer's euro that arrives, depending on how much the customer pays per year. Progressive taxes, contribution ceilings and business expenses shape the curves.
VAT is generally charged on taxable transactions. The business owes output VAT to the tax authority and can deduct eligible input VAT. A business customer can recover the invoiced tax only if entitled to input VAT deduction; exempt activities may not qualify. The business-customer comparison assumes full recovery and uses the amount excluding VAT.
A private customer bears the gross price. At 20% VAT, a €120,000 payment contains €100,000 net revenue and €20,000 output VAT before input VAT credits. VAT is 16.67% of the gross price, not 20%. Whether its economic burden takes the form of higher consumer prices or lower business receipts depends on competition and demand.
The model assumes standard 20% VAT even below the small-business threshold. Since 2025, the Austrian small-business exemption generally requires turnover not exceeding €55,000 in the current and preceding calendar years, with a 10% tolerance in the year of exceedance. Exempt businesses generally charge no VAT and cannot recover input VAT. That option, reduced rates, reverse charge and cross-border cases are not calculated here.
Employees generally receive five weeks of paid holiday, six when statutory conditions are met, continued pay during illness and unemployment insurance. Public holidays add days off only when they fall on scheduled working days. Self-employed people must price in downtime and business risk. SVS also provides health and pension insurance, but not automatically equivalent protection against every risk.
Equal annual expenditure by the payer does not imply equal productive hours or equal risk. Calling an employment relationship a contract for services does not change its legal nature. This comparison illustrates arithmetic; it does not determine employment status.
Model assumptions. The SVS calculation approximates an established business with stable profit: 18.5% pension insurance, 6.8% health insurance, 1.53% self-employed severance provision and €155.40 annual accident insurance. It includes minimum and maximum bases and the basic profit allowance (15% on up to €33,000 profit, at most €4,950). Provisional contributions, reassessments and start-up rules can materially change cash flow. Severance provision actually uses the provisional health-insurance base; this model assumes it equals the current base. The GmbH line shows only 23% corporation tax and 27.5% dividend tax on full distribution, together 44.175% of profit. It excludes director remuneration, social insurance, minimum corporation tax and extra administration costs; it is not a complete net-income forecast.
Legal forms for founding a business in Austria, in brief: the choice determines liability, tax logic, social insurance and founding effort. It can be changed later, but a switch costs time and advice.
A natural person operates the business and is personally liable. A trade licence is required where the activity falls under trade law; liberal professions and other self-employed activities require separate assessment. No statutory minimum capital applies, but ongoing chamber, insurance and administration costs may arise.
OG partners have unlimited personal liability. In a KG, general partners are unlimitedly liable; a limited partner’s external liability is governed by the registered liability amount and is discharged to the extent the contribution has been paid. Profits are generally attributed to the partners for tax purposes. Registration in the commercial register is required.
A separate legal entity, generally liable through its own assets. Minimum share capital is €10,000, normally with at least €5,000 paid in for a cash formation. Personal guarantees and director liability can still apply. Formation documents and commercial registration are required; some single-member companies qualify for simplified digital formation. Managing shareholders may fall under ASVG or GSVG depending particularly on ownership and control.
The Flexible Capital Company also has €10,000 minimum share capital. It supports enterprise-value shares for participation schemes and simplified share transfers. It does not confer a separate tax concession; costs, governance and the ownership structure matter.
The OECD tax wedge measures income tax and covered employee and employer contributions, less cash benefits, as a share of labour costs for a defined household. Here it describes a single person without children at the national average wage in 2025, not all households. Our model curve uses Austrian 2026 rules and a different scope of charges, including severance-fund contributions and Vienna’s surcharge; it is therefore not identical to the OECD methodology.
Tax wedge 2025, single person without children at the average wage. The vertical line marks the OECD average. Austria is fourth of 38. The chart shows selected countries.
Austria's wedge is not one number. Computed with the same engine as the first tab: employer cost against annual net including the 13th and 14th salary.
Selected countries: OECD tax wedge 2025 and social protection benefits as a percentage of GDP in 2024 (Eurostat database, retrieved 25 September 2026). The EU marker uses the November 2025 early estimate. These have different denominators and years: the gap between points is neither an individual loss nor a refund rate.
Many states are absent because they are not OECD members. No personal income tax does not automatically mean no contributions or other taxes. A comparison must also consider mandatory private insurance and access to services.
No personal income tax on employment income does not mean tax-free living. VAT, business taxation, insurance and residency status need separate consideration.
The personal income tax exemption for many residents has exceptions, particularly for French nationals. Social contributions and indirect taxes still matter.
These systems differ. The absence of personal wage taxation does not establish zero contributions or identical entitlements for nationals and migrants.
No personal income tax does not prove that pensions or mandatory contributions are absent. The two jurisdictions require separate assessment; no full tax calculation is provided here.
The OECD records no positive tax wedge at the average wage. Mandatory payments to non-government schemes can fall outside its definition. The figure does not mean tax credits cancel all taxes and contributions.
Mandatory contributions to privately organised schemes are not fully captured by the OECD tax wedge. The 7.5% figure is therefore not a complete measure of mandatory deductions.
Household electricity, second half of 2025, annual consumption 2,500–4,999 kWh, including taxes and levies; Eurostat nrg_pc_204. Marker: EU-27, 28.96 ct/kWh. Austria: 32.72 ct/kWh. These are not industrial electricity prices.
Assumes the entire net amount is spent. VAT share means tax divided by the final price, not the statutory VAT rate. At 20% VAT this is 16.67%. Saving, exempt purchases and reduced rates change the mix.
This cycle uses the selected gross monthly salary. The net share depends on income. VAT is already included in consumer prices; it is not deducted from the bank balance a second time. The chart splits net pay into embedded VAT and the value before VAT. That value is not inflation-adjusted purchasing power.
Selected salary × 14 and selected VAT share of spending; an illustrative model, not a measured household rate.
Where does the money go privately? The starting point is the average figures from the 2024/25 household expenditure survey (Statistics Austria): €4,170 of spending per household per month. Set your own household net income and shift the shares; whatever is left is your savings rate. The €4,170 measures average consumption spending, not average income. The survey includes imputed rent for owner-occupied housing; mortgage principal repayments are not consumption spending. Personal cash flow and statistical shares are therefore only partly comparable.
All sliders are percentages of household net income. Use annual net including special payments ÷ 12 for an annual-average budget. Starting income €4,200 is an example, not a statistical average.
Bar = your amount · marker = Austrian spending mix applied to your total spending. Negative balance extends left of zero.
The saving model reinvests returns. Its constant return is an assumption, not a forecast. An amortising loan payment consists of interest on the remaining debt and principal repayment; with payments made as agreed, interest is not automatically added to the debt.
The longer the horizon, the more the returns overtake the contributions. That is exactly why time is the most important factor in building wealth.
Simplified annuity at a constant borrowing rate, excluding fees and transaction costs. The KIM-V expired on 30 June 2025. FMA guidelines still specify a maximum 90% loan-to-collateral ratio, 40% debt-service ratio and 35-year term. Banks assess individual cases; this display is not a lending decision.
Income: include 13th/14th net payments and divide the annual total by 12. Other instalments: include existing loans. Living costs, fees and purchase costs are additional.
Example assumptions: 10% purchase costs and €15,000 reserve, not mandatory amounts. Costs are paid from your own funds and do not increase the loan in this model. The reserve is retained cash, not an expense. Include transfer tax, registration and mortgage fees, legal/notary costs and any agent or financing fees in the cost percentage; adjust it for your actual quotes and any exemptions. Renovation and furnishing are additional. Austria: purchase costs
Taxes finance federal, regional and municipal government; social insurance contributions mainly go to insurance institutions. This chart shows only the 2026 federal budget adopted in 2025: €125.9bn outflows and €107.6bn inflows, a planned negative financing balance of €18.3bn. These are budgeted amounts, not final 2026 outcomes.
Federal budget bill 2026 (Ministry of Finance). The largest revenue sources are VAT and wage tax, precisely the taxes covered in Price & balance and in this tool.
Historical projection example: Statistics Austria’s 2023 population projection, baseline 2022. Age groups are not equivalent to employment or pension-recipient status.
Austria’s statutory pension system is mainly pay-as-you-go: current contributions and tax-funded federal payments finance current pensions. In the displayed 2026 plan, about €20.3bn is assigned to pension insurance (UG 22); the €34.2bn also includes civil-servant pensions. These payments are already included in federal outflows. They must not be added again to the €18.3bn federal financing shortfall, nor is that whole shortfall a pension deficit.
The funding pressure is real. The BMF’s long-term 2025 scenario projects public pension spending from 14.9% of GDP in 2024 to 15.9% in 2035 and 15.8% in 2060. Ageing, health, care and interest costs together put the public finances under pressure. This indicates a need for fiscal and policy adjustments, not a proven date when pensions stop. Employment, productivity, effective retirement age, contributions, taxes and benefit rules all affect sustainability.
A personal pension gap is different: the difference between the net income someone will need in retirement and their expected net pension. It depends on their pension account, work history and living costs; it cannot be read off the national budget deficit.