Taxes & Payroll Costs in Austria 2026: Founder's Guide for the First 90 Days

The first 90 days after founding a GmbH in Austria are crucial from a tax perspective – but many international founders underestimate the complexity of the Austrian tax system. This guide explains the most important types of tax for your first three months: Corporate Income Tax GmbH (23% on company profits, minimum KöSt of EUR 500 in the first five years), Value Added Tax UVA (standard rate 20%, small business regulation up to EUR 55,000 annual turnover (gross, with limited tolerance)) and payroll costs Austria (typically 20–30% in addition to the gross salary). You will learn when which registrations, advance returns and payments are due, how to set up your payroll accounting and which tax obligations apply to you as managing director personally. At the end, you will receive a concrete 90-day plan and access to our free PDF guide with checklists and a discussion guide for your tax advisor.

Checklist: Taxes & Payroll – The First 90 Days

Corporate Income Tax & Annual Financial Statements

• Tax registration of the GmbH with the tax office – Registration with questionnaire for tax registration (week 1–2)

• Apply for FinanzOnline access – Access for digital tax returns and communication with the tax office (week 1–3)

• Set up accounting system – Choose software for ongoing bookkeeping (week 2–4)

• Clarify advance payments KöSt – Discuss amount and dates of quarterly KöSt advance payments with tax advisor (week 4–8)

Value Added Tax & UVA

• Apply for UID number – Value added tax identification number at the tax office (week 1–2)

• Determine UVA frequency – Clarify whether monthly, quarterly or no UVA obligation (week 2–4)

• Check small business regulation – Decide whether small business regulation makes sense or opt-out is better (week 2–4)

• Prepare first UVA – If UVA obligation: first preliminary value added tax return for the first full month (week 8–12 at the latest)

Income Tax & Advance Payments (Founder)

• Clarify personal tax liability – Check residence, unlimited/limited tax liability, DTA (week 1–4)

• Structure salary vs. distribution – Discuss optimal remuneration structure with tax advisor (week 4–8)

• Advance payments income tax – If you expect a noticeable income tax liability from self-employment or additional income, the tax office will usually set quarterly advance payments. Plan this liquidity early (from week 12)

Payroll Accounting & Payroll Costs

• Find payroll accounting partner – Choose tax advisor, specialized office or software solution (week 1–4)

• Register for social security – Register all employees and managing directors with ÖGK / SVS (before first salary, week 4 at the latest)

• Determine salary structure – Clarify gross salaries, collectively agreed minimum wages, special payments (week 2–6)

• First payroll – Process salaries, income tax, social security contributions, DB/DZ, municipal tax (from week 4–8)

• Permanent establishments & audits – Preparation for GPLA audits (joint audit of payroll-related taxes) and industry-specific reports, e.g. BUAK in the construction industry (week 4–8)

Corporate Income Tax for GmbH & Holdings 2026 – What Founders Need to Know

The corporate income tax (KöSt) is the central corporate tax for corporations in Austria. Since 2024, the tax rate has been a uniform 23% on the annual profit of your GmbH, FlexKap or AG. Even if your company makes losses in the first year or does not generate any profit, a minimum corporate income tax of EUR 500 per year is due in the first five years after foundation. This minimum tax is directly linked to the reduced minimum share capital of EUR 10,000 for GmbH and FlexKap.

How does corporate income tax work in practice?

The KöSt is calculated on the taxable result (profit after operating expenses) and declared annually. The tax return must be submitted electronically via FinanzOnline, usually by June 30 of the following year at the latest (with tax advisor representation, extended deadlines until the end of February of the year after next). Already during the current financial year, the tax office requires quarterly KöSt advance payments, the amount of which is based on the last assessed tax. In the first financial year, the advance payments are often set on the basis of an estimate or to zero.

Double Taxation: Understanding KöSt + KESt

An important concept for founders is the two-stage taxation: Profits are first taxed at the company level with 23% KöSt. If you distribute profits as a shareholder (dividends), capital gains tax (KESt) of 27.5% is additionally due on this distribution – but only on the amount already taxed after KöSt. This structure is central to your decision between salary payments and profit distributions.

What does that mean for international founders?

If you come to Austria from abroad or set up holdings with international structures, you should have double taxation agreements (DTA) checked early on. Some constructions can lead to unwanted double taxation or tax disadvantages. A structured tax setup in the first 90 days is essential.

Value Added Tax & UVA – The Most Important Rules for 2026

The value added tax (VAT) is a consumption tax that you levy on the sale of goods and services and pay to the tax office. The standard tax rate in Austria is 20%, reduced rates of 10% (e.g. food, books, certain services) and 13% (e.g. overnight stays, cultural services) apply to special categories.

Small Business Regulation: Up to EUR 55,000 Annual Turnover

If your expected annual turnover is below EUR 55,000 (gross, with limited tolerance), you can benefit from the small business regulation. This means: You do not charge value added tax and do not have to submit preliminary value added tax returns (UVA). The disadvantage: You also cannot claim input tax from your incoming invoices (e.g. for office equipment, software, service providers).

When is the small business regulation worthwhile?

The regulation makes sense for:

• Low investments and low operating expenses

• B2C business with end customers who cannot deduct input tax

• Simple administration and low compliance costs

Opt-out is better for:

• High start-up investments (office equipment, IT, marketing)

• B2B business with VAT-liable customers

• International business within the EU

You can voluntarily waive the small business regulation and opt for regular VAT registration – but then you are bound to it for at least five years.

UVA Obligation: When do you have to submit preliminary value added tax returns?

The frequency of the preliminary value added tax return (UVA) depends on your annual turnover:

The UVA is submitted electronically via FinanzOnline. If you miss the deadlines, late payment surcharges and interest are threatened. For new foundations, the tax office determines the UVA frequency on the basis of the expected turnover; in practice, you should plan and monitor this together with your tax advisor. The first UVA is due for the first full business month.

UID Number: Obligation for EU Business

If you offer goods or services within the EU, you need a value added tax identification number (UID). You apply for this at the tax office and usually receive it within a few days. The UID enables the reverse charge procedure for B2B transactions within the EU.

Wage Tax & Payroll Costs in Austria – Basics for Employers

As soon as your GmbH employs employees – including yourself as managing director –, you become an employer with extensive payroll accounting and social security obligations. The payroll costs Austria are surprisingly high for many international founders: In addition to the gross salary, employer contributions of typically 20–30% are incurred, in some industries even more.

What are payroll costs?

Payroll costs include all taxes that the employer has to pay in addition to the gross salary:

• Social security contributions: Health insurance (KV), pension insurance (PV), unemployment insurance (AV), accident insurance (UV). These contributions are divided between employer and employee, with the employer's share being significantly higher.

• Employer contribution (DB): 3.9% of the gross salary, is borne by the employer.

• Surcharge to the employer contribution (DZ): 0.41% to 0.49% depending on the federal state, also employer's share.

• Municipal tax: 3% of the gross salary, depending on the location of the permanent establishment (not in all municipalities).

• Other levies: In certain industries (e.g. construction) additional contributions such as BUAK levy.

Calculation example (simplified):

With a monthly gross salary of EUR 4,000, additional employer costs of approximately EUR 800–1,200 are incurred, depending on the industry, location and social security category. The total costs for the employer are therefore approximately EUR 4,800–5,200.

Special features for managing directors

Managing directors can be treated differently under social security law:

• Employed managing directors (minority shareholders with less than 25% shareholding): Are subject to ASVG social security like normal employees – full social security obligation.

• Self-employed managing directors (majority shareholders with more than 25% shareholding): Can fall under GSVG social security, which has different contribution rates and conditions. The SVS (Social Insurance Institution of the Self-Employed) is responsible here.

This distinction has significant effects on payroll costs and should be clarified early on with a tax advisor and the responsible social security institution.

Payroll accounting in practice

The monthly payroll accounting includes:

• Calculation of gross salary, wage tax and social security contributions

• Transfer of the net salary to employees

• Payment of wage tax and social security contributions to the tax office and ÖGK

• Monthly reports to the tax office (wage slip) and social security

For international founders, it is recommended to outsource payroll accounting to a tax advisor or specialized payroll service provider. Errors in payroll accounting can lead to significant back payments and penalties.

Taxes for Founders as Natural Persons

As managing director and shareholder of a GmbH, you are personally subject to Austrian income tax (ESt) if you have your residence or habitual abode in Austria. The amount of your personal tax burden depends on how you structure your income from the GmbH.

Income Tax Rate Brackets 2026

Austria has a progressive income tax system with several rate brackets between 0% and 55%. The entry level (0%) currently applies to a taxable annual income of around EUR 13,300, the highest level of 55% from around EUR 1 million. The exact limits are adjusted regularly and should be checked with the Federal Ministry of Finance (BMF). The progression runs over several levels of 20%, 30%, 40%, 48% to 50% and finally 55% for very high incomes.

These levels apply to income from dependent employment (salary) and self-employment (e.g. freelance income).

Salary vs. Profit Distribution: Two Ways, One Goal

As managing director, you can be remunerated in two ways:

• Profit distribution: The GmbH distributes profits to you as a shareholder after taxation with KöSt (23%). You pay 27.5% capital gains tax (KESt) on this distribution – a fixed rate without progression. Advantage: No social security contributions. Disadvantage: Only available after KöSt.

• Salary: You pay yourself a monthly managing director salary as a GmbH. This is subject to wage tax (progressive ESt rate) and social security contributions. The salary is also an operating expense of the GmbH and reduces the KöSt assessment basis.

Advance Payments Income Tax

If you expect high income (e.g. from freelance work, rental or as a self-employed managing director), the tax office requires quarterly income tax advance payments. These are based on your last assessment and will be offset against the actual tax liability later.

Expats and Double Taxation

If you move to Austria from abroad or continue to have income abroad, you must observe double taxation agreements (DTA). Austria has concluded DTA with most countries, which regulate where income is taxed and which credits are possible. Individual tax advice is essential here.

Important: The optimal remuneration structure depends on many individual factors – amount of income, social security status, family circumstances, long-term plans. This article only provides an overview. Concrete tax planning must always be done with a tax advisor.

What to do next? Concrete 90-Day Plan

You now have an overview of the most important types of tax and payroll costs in Austria. But how do you implement this concretely? Here is your structured 90-day plan:

Days 1–30: Lay the tax foundations

• Find a tax advisor and payroll accountant: Look for a tax advisor with experience in international foundations and your industry (SaaS, FinTech, Consulting). Clarify whether payroll accounting should be done internally, by the tax advisor or via specialized software (e.g. Lexware, BMD, RZL).

• Set up FinanzOnline access: Apply for access data from your tax office or have this done by your tax advisor. FinanzOnline is the central platform for all tax reports and declarations.

• Choose accounting system: Decide on an accounting software (e.g. Lexoffice, sevDesk, BMD) or outsource the accounting completely. Important: The system must cover Austrian requirements (UVA, KöSt, payroll accounting).

• Apply for UID number: If you have not already done so, apply for your value added tax identification number from the tax office immediately.

Days 31–60: Clarify payroll and UVA obligations

• Register for social security: Register all employees and yourself as managing director with the responsible social security institution (ÖGK for employees, SVS for self-employed). Deadlines are strict – registration before the first day of work.

• Determine UVA frequency: Clarify with your tax advisor whether you have to submit UVA monthly, quarterly or not at all. Set up reminders for the 15th of the month deadlines.

• Process first salaries: If you already have employees, the first payroll accounting must be done correctly. Wage tax, social security contributions, employer contribution and municipal tax must be paid on time.

Days 61–90: Tax annual planning and optimization

• Discuss KöSt advance payments: Have your tax advisor calculate the expected KöSt burden for the first year. Clarify whether and in what amount advance payments are due.

• Tax setup for expats: If you are structured internationally, discuss double taxation agreements, exit taxation, foreign holdings and tax residency.

• Plan long-term remuneration structure: Develop a strategy with your tax advisor: Which combination of salary, distributions and, if applicable, royalties is optimal for you?

Free PDF Guide: "Taxes & Payroll Costs in Austria 2026 – Founder's Guide for the First 90 Days"

Would you like a detailed step-by-step guide with checklists, schedules and a discussion guide for your tax advisor? Download our free PDF guide. The guide contains:

• Complete 90-day checklist with all tax and payroll tasks

• Schedule with concrete deadlines for UVA, KöSt advance payments, social security

• Conversation guide for your initial consultation with a tax advisor or payroll accountant

• Overview of tax types and rates (corporate income tax, VAT, income tax, capital gains tax, payroll-related costs)

• Checklist for expats: Special tax issues with an international background

Non-binding initial consultation with NEXORA

Every GmbH structure is unique – whether it's a holding company, SaaS startup, consulting boutique, or FinTech company. NEXORA supports you in setting up your tax and payroll setup correctly from the start. In a free initial consultation:

• We analyze your company structure and business model

• We identify tax optimization potentials and compliance risks

• We create a customized 90-day plan for your taxes and payroll

• If required, we can connect you with specialized tax advisors and payroll partners in Vienna

Book your free initial consultation now – bring your questions, and together we will develop your tax roadmap for Austria.

Schedule a consultation now

About NEXORA Unternehmensberatung:

NEXORA Unternehmensberatung GmbH is your partner for market entry, digitization and compliance in Austria. We support international founders, scale-ups and investors in building structures in Vienna – with a clear focus on FinTech, RegTech and digital business models. Our mission: Practice instead of theory, speed instead of bureaucracy.

Legal Notice

This article is for informational purposes only and does not constitute tax, legal, or financial advice. The information presented is based on the legal status as of December 2025 in Austria and is subject to change at any time due to changes in laws, regulations, or case law. Tax rates, thresholds, advance payment regulations, and social security contributions are presented in a simplified manner and may vary depending on the individual situation, industry, legal form, and personal circumstances.

The percentages, deadlines, and guidelines mentioned in this article are for guidance only and do not replace individual consultation. For binding information on your specific tax and social security situation, please consult a licensed tax advisor, auditor, or attorney. NEXORA Unternehmensberatung GmbH assumes no liability for decisions made on the basis of this article or for any damages arising from the application of the information presented.