Income taxes in Austria in 2025: what you should know as a self-employed expat

Navigating the Austrian tax system can be complex, especially if you’re self-employed. While full-time employees have their income tax deducted automatically by their employers, freelancers and business owners need to manage their own tax obligations. Here’s a breakdown of what you should know in 2025 if you’re an expat working independently in Austria.

Austria’s progressive income tax – new 2025 rates

Austria applies a progressive income tax system, meaning the more you earn, the higher the percentage of tax you pay. As of 2025, the tax brackets are as follows:

• Up to €13,308 – 0% (tax-free)
• €13,308 to €21,617 – 20%
• €21,617 to €35,836 – 30%
• €35,836 to €69,166 – 40%
• €69,166 to €103,072 – 48%
• €103,072 to €1,000,000 – 50%
• Above €1,000,000 – 55%

If your total earnings remain below €13,308 per year, you won’t have to pay any income tax. However, even if you earn below this threshold, you may still need to file a tax return depending on your work status.

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Tax obligations for self-employed expats

Unlike salaried employees, self-employed individuals must calculate and pay their own taxes. Here’s what you need to keep in mind:

1. Income tax (Einkommensteuer)

If you’re a freelancer (Neue Selbständige) or a sole trader (Einzelunternehmer), you must declare your earnings and pay income tax based on the progressive brackets above. If your earnings exceed €11,693 per year, filing a tax return is mandatory.

2. Social security contributions (Sozialversicherung)

Freelancers must contribute to Austria’s Social Insurance for the Self-Employed (SVS). If your net annual income surpasses €6,010.92 (as of 2025), you’ll be required to register with the SVS and start paying contributions for health, pension, and accident insurance.

3. Value-added tax (Umsatzsteuer)

If your revenue exceeds €35,000 per year, you must register for VAT (USt) and charge 20% VAT on your invoices. Certain professions, such as writers and artists, may qualify for reduced rates or exemptions.

Gewerbe vs. Neue Selbständigkeit

Self-employment in Austria falls under two main categories: Gewerbe (Trade) and Neue Selbständigkeit (New Self-Employment).

• Gewerbe: Covers professions that require official registration with the Wirtschaftskammer Österreich (WKO). It can be further divided into regulated (requiring qualifications) and unregulated (freie Gewerbe) trades.
• Neue Selbständigkeit: Includes professions that do not require a Gewerbe registration but must still be reported for tax and social security purposes. Common examples include freelance writers, digital marketers, and private tutors.

If you are self-employed, you are not a member of the Arbeiterkammer (Chamber of Labour), which supports employees. However, Gewerbe holders automatically become WKO members.

Understanding Werkvertrag and Dienstvertrag

In Austria, self-employed work is often structured under Werkvertrag (Contract for Work and Services) instead of a Dienstvertrag (Employment Contract).

• Werkvertrag: Payment is based on delivering a specific result rather than working fixed hours. You do not have an employer—only a client. This means you handle your own taxes and insurance contributions.
• Dienstvertrag: If your work involves set hours, dependency on an employer, or regular payments, it may be classified as employment, requiring payroll taxation (Lohnsteuerpflichtig).

If unsure, consult Arbeiterkammer or WKO to confirm your contract classification, as misclassification can lead to legal and tax consequences.

Tax return filing obligations

If you are self-employed, you need to file an Einkommensteuererklärung (income tax return) if:

• Your self-employment income exceeds €11,693 per year.
• You earn both as an employee (Dienstvertrag) and freelancer, with combined earnings above €12,756 per year, and your freelance income is more than €730.
• You exceed the VAT-exempt threshold of €35,000 per year.

Examples of self-employment in Austria

To give you a clearer idea of how self-employment works, here are some common professions among expats:

1. Digital Consultant – If you work remotely providing IT consulting, digital marketing, or project management, you’ll typically operate as a Neue Selbständige, meaning no business license (Gewerbe) is required.
2. Private Tutor – If you teach languages or provide tutoring services, you’ll be self-employed and need to register with the Finanzamt for tax purposes.
3. Freelance Photographer – If you take photos for magazines or sell prints, this falls under Neue Selbständige. However, if you work on commissioned shoots like weddings, you may need a business license.
4. Content Creator – Whether you make money from YouTube, TikTok, or affiliate marketing, your earnings count as taxable self-employment income.
5. Personal Trainer – Providing fitness coaching as a freelancer requires proper registration, and you may also need specific qualifications depending on the services you offer.

How to get started as a self-employed expat

If you’re planning to work independently in Austria, follow these steps:

1. Register with the Tax Office (Finanzamt): Within a month of starting your activity, you need to request a tax number (Steuernummer).
2. Determine whether you need a business license (Gewerbe): Not all freelancers require one, but certain professions do.
3. Enroll in social security (SVS): If your income exceeds the threshold, sign up to pay into Austria’s self-employed social insurance system.
4. Keep records of your invoices and expenses: You’re required to store financial records for at least seven years.
5. File your taxes annually: If your income exceeds the tax-free threshold, submit your annual tax return online via FinanzOnline.

Final Thoughts

Austria’s tax system can seem overwhelming at first, but understanding the key obligations for self-employed workers makes it easier to stay compliant. If you’re planning to work as a freelancer or business owner, consulting a tax expert can help you optimize your tax situation and avoid costly mistakes.

For more information, visit Finanzamt Österreich or seek guidance from WKO (Wirtschaftskammer Österreich) and SVS (Sozialversicherung der Selbständigen).