6 ms·

You don't want to pay the ultra-high taxes and social security in Austria. While corporate taxes are ok, they went berserk with personal income.

by geff82 10y ago

geff82 10y ago
If you make a decent salary, expect a hard 50% to go to the state. No reduction for marriage or children.
- pvitz 10y ago
  The 50% tax rate is a marginal tax rate. If you would earn e.g. 100.000 EUR per year, you would pay about 39% (tax plus social security). 200.000 EUR per year -> 42% (tax plus social security) totally. This calculation was done for an employee, not for the employer. Also, there are things like child support, tax credit and allowances as well as social security benefits. In the best case, you will not need to pay for health insurance for your children till the age of about 24 and so on...
- stewbrew 10y ago
  Do have children? You get family support for each child. You get money for child care (Kinderbetreueungsgeld) for at least 1 year. You get affordable child care (kindergarten) starting from 1.5 yrs (at least in Vienna).
mherrmann 10y ago
If you live in Vienna you do however get to enjoy the highest quality of life in the world [1]. And not just this year either. Vienna has kept the title as the best city to live in for several years. Also, you don't have to pay hundreds of thousands of $ to send your kids to college. 1: https://www.theguardian.com/business/2016/feb/23/vienna-named-worlds-top-city-for-quality-of-life https://www.theguardian.com/business/2016/feb/23/vienna-name...
- atmosx 10y ago
  Vienna is outstanding. Just by living there you achieved a "high quality" life. You can move around with a Bike, the food is amazing if you know where to look, the city is vibrating, full of events and happenings and sightscenes, open concerts and people are amazing :-)
ckastner 10y ago
Taxes aren't as bad as you make them out to be (the system is progressive), and I believe the benefits far outweigh the costs. Free higher education (university) for example, or excellent healthcare.
- duckingtest 10y ago
  50% income tax above €51k. Hardly progressive. So let's say you earn €120k gross as a developer. Using this calculator [0] - input 8571 monthly because of some weird bonuses - it turns out you get €73344,69. That's not all - the company also has to pay 21.7% as a social tax. So in total, you get 50% of what you earn. But wait, there's also 20% vat! Which makes the total tax rate 58.14%. There's NO way a startup in Austria is going to compete for talent with the rest of the world. Maybe Austria works for official company residency but not actual work. >the benefits far outweigh the costs Yes there are benefits and costs. It costs those that are highly productive and benefits the rest. >or excellent healthcare. which young people don't need, and by the time they are going to need it, the demographic situation (in the whole Europe) is going to be horrible and benefits are going to get seriously downsized. [0] http://bruttonetto.akwien.at/ http://bruttonetto.akwien.at/
  - ju-st 10y ago
    Which company pays 120k € for a developer?
    - jahnu 10y ago
      In Vienna? Exactly none. Experienced good motivated devs can get 80k if they are lucky.
  - deleted 10y ago
    [deleted]
  - pvitz 10y ago
    You are mixing up some facts. By taking your number of 120.000,- EUR salary before tax and entering it into the tax calculator of the Ministry of Finance [0], I get about the same number for the final salary. Therefore, the employee had to pay about 39% tax and social security. The employer, however, had to pay the salary of 120.000,- to the employee and about 22% of the salary to the state and social insurance. Apart from that, 120.000,- EUR for a developer in Vienna seems a bit too much. I would expect something between 40.000 - 65.000 on average and higher salaries in the banking / insurance sector. 120.000,- EUR is e.g. the salary of a head of unit in a big Austrian insurance company. [0] http://onlinerechner.haude.at/bmf/brutto-netto-rechner.html http://onlinerechner.haude.at/bmf/brutto-netto-rechner.html
loevborg 10y ago
Speak for yourself. Some people are happy to pay high income taxes in return for stability, good schools and health care and a (more) equitable society.
- josu 10y ago
  If I understand correctly he is talking about one's employees. Wages are usually the number one cost in a startup, if on top of having to pay competitive wages, which are pretty high in Austria, you also have to pay lots of taxes, then your burn rate goes up through the roof. I don't know that much about the situation in Austria, but it would be nice if someone could develop that point.
  - ckastner 10y ago
    I am under the impression that $110K won't get you far in Silicon Valley. For €100K, you can have a princely life in Vienna. If disposable income is what matters, I believe developers are much cheaper here.
    - pfg 10y ago
      Sounds about right. With €100k/y, you're definitely in senior management territory in Austria. In comparison to other countries like Germany, salaries are generally lower for software-related jobs (despite the GDP per capita being higher).
stefanix 10y ago
True. Here is the thing that works well in Austria: the ramen stage. The standard of living you can have on little income is phenomenal. Hardly a country like it. The trick is to keep all the capital in the company, pay the 25% corporate income tax, and only cash out once you made it. Total taxes will still be in the 50% range but if you fail you will still have had a nice ride. Hiring people in Austria is another issue. Part of the high standard of living is all the employee protections. E.g. by US standards there is an ungodly amount of holidays. If you are a core team of founders or hire people remotely this can be mitigated. Actually counter intuitive why Austrians tend to be more risk adverse. It's really a mental block rather than a systemic issue.
- stewbrew 10y ago
  It's a common (Austrian) myth that Austrians are risk averse and conservative. It's all about "Gemütlichkeit". I remember some studies though that e.g. the Austrian labour market has greater fluctuations than in some neighboring countries. Also recent studies have shown that income inequality is quite high -- contrary to a common belief. Super rich people have a good time in Austria.

You don't want to pay the ultra-high taxes and social security in Austria. While corporate taxes are ok, they went berserk with personal income.

by geff82 10y ago

You don't want to pay the ultra-high taxes and social security in Austria. While corporate taxes are ok, they went berserk with personal income.

geff82 10y ago

If you make a decent salary, expect a hard 50% to go to the state. No reduction for marriage or children.

pvitz 10y ago
The 50% tax rate is a marginal tax rate. If you would earn e.g. 100.000 EUR per year, you would pay about 39% (tax plus social security). 200.000 EUR per year -> 42% (tax plus social security) totally. This calculation was done for an employee, not for the employer. Also, there are things like child support, tax credit and allowances as well as social security benefits. In the best case, you will not need to pay for health insurance for your children till the age of about 24 and so on...
stewbrew 10y ago
Do have children? You get family support for each child. You get money for child care (Kinderbetreueungsgeld) for at least 1 year. You get affordable child care (kindergarten) starting from 1.5 yrs (at least in Vienna).

mherrmann 10y ago

If you live in Vienna you do however get to enjoy the highest quality of life in the world [1]. And not just this year either. Vienna has kept the title as the best city to live in for several years. Also, you don't have to pay hundreds of thousands of $ to send your kids to college. 1: https://www.theguardian.com/business/2016/feb/23/vienna-named-worlds-top-city-for-quality-of-life https://www.theguardian.com/business/2016/feb/23/vienna-name...

atmosx 10y ago
Vienna is outstanding. Just by living there you achieved a "high quality" life. You can move around with a Bike, the food is amazing if you know where to look, the city is vibrating, full of events and happenings and sightscenes, open concerts and people are amazing :-)

ckastner 10y ago

Taxes aren't as bad as you make them out to be (the system is progressive), and I believe the benefits far outweigh the costs. Free higher education (university) for example, or excellent healthcare.

duckingtest 10y ago
50% income tax above €51k. Hardly progressive. So let's say you earn €120k gross as a developer. Using this calculator [0] - input 8571 monthly because of some weird bonuses - it turns out you get €73344,69. That's not all - the company also has to pay 21.7% as a social tax. So in total, you get 50% of what you earn. But wait, there's also 20% vat! Which makes the total tax rate 58.14%. There's NO way a startup in Austria is going to compete for talent with the rest of the world. Maybe Austria works for official company residency but not actual work. >the benefits far outweigh the costs Yes there are benefits and costs. It costs those that are highly productive and benefits the rest. >or excellent healthcare. which young people don't need, and by the time they are going to need it, the demographic situation (in the whole Europe) is going to be horrible and benefits are going to get seriously downsized. [0] http://bruttonetto.akwien.at/ http://bruttonetto.akwien.at/
- ju-st 10y ago
  Which company pays 120k € for a developer?
  - jahnu 10y ago
    In Vienna? Exactly none. Experienced good motivated devs can get 80k if they are lucky.
- deleted 10y ago
  [deleted]
- pvitz 10y ago
  You are mixing up some facts. By taking your number of 120.000,- EUR salary before tax and entering it into the tax calculator of the Ministry of Finance [0], I get about the same number for the final salary. Therefore, the employee had to pay about 39% tax and social security. The employer, however, had to pay the salary of 120.000,- to the employee and about 22% of the salary to the state and social insurance. Apart from that, 120.000,- EUR for a developer in Vienna seems a bit too much. I would expect something between 40.000 - 65.000 on average and higher salaries in the banking / insurance sector. 120.000,- EUR is e.g. the salary of a head of unit in a big Austrian insurance company. [0] http://onlinerechner.haude.at/bmf/brutto-netto-rechner.html http://onlinerechner.haude.at/bmf/brutto-netto-rechner.html

loevborg 10y ago

Speak for yourself. Some people are happy to pay high income taxes in return for stability, good schools and health care and a (more) equitable society.

josu 10y ago
If I understand correctly he is talking about one's employees. Wages are usually the number one cost in a startup, if on top of having to pay competitive wages, which are pretty high in Austria, you also have to pay lots of taxes, then your burn rate goes up through the roof. I don't know that much about the situation in Austria, but it would be nice if someone could develop that point.
- ckastner 10y ago
  I am under the impression that $110K won't get you far in Silicon Valley. For €100K, you can have a princely life in Vienna. If disposable income is what matters, I believe developers are much cheaper here.
  - pfg 10y ago
    Sounds about right. With €100k/y, you're definitely in senior management territory in Austria. In comparison to other countries like Germany, salaries are generally lower for software-related jobs (despite the GDP per capita being higher).

stefanix 10y ago

True. Here is the thing that works well in Austria: the ramen stage. The standard of living you can have on little income is phenomenal. Hardly a country like it. The trick is to keep all the capital in the company, pay the 25% corporate income tax, and only cash out once you made it. Total taxes will still be in the 50% range but if you fail you will still have had a nice ride. Hiring people in Austria is another issue. Part of the high standard of living is all the employee protections. E.g. by US standards there is an ungodly amount of holidays. If you are a core team of founders or hire people remotely this can be mitigated. Actually counter intuitive why Austrians tend to be more risk adverse. It's really a mental block rather than a systemic issue.

stewbrew 10y ago
It's a common (Austrian) myth that Austrians are risk averse and conservative. It's all about "Gemütlichkeit". I remember some studies though that e.g. the Austrian labour market has greater fluctuations than in some neighboring countries. Also recent studies have shown that income inequality is quite high -- contrary to a common belief. Super rich people have a good time in Austria.