Starting Self-Employment in Austria: 5 Things to Know Before You Register
- Marta Srebrakowska
- Aug 21
- 5 min read
Updated: 6 days ago
Many people think about becoming self-employed in Austria but feel stuck before even starting. The rules seem complicated, the financial obligations unclear, and the fear of making mistakes is strong. It is normal to feel uncertain. The truth is that most people who are now working successfully on their own were once in the same position.
Taxes, social insurance, and paperwork sound intimidating when you have never dealt with them before, and our recent survey in the Self-Employed in Austria community confirmed this: the number one reason people hold back from registering is confusion about taxes and social security.
The beginning can feel heavy, but once you understand the basics, it gets much easier. Here are five important points that the self-employed who already went through the process say they wish they had known earlier.
1. Correct category identification – speak with an expert
When registering for self-employment in Austria, one of the trickiest aspects is choosing the right category for your work. Is your professional activity within a Freier Beruf (liberal profession), a Gewerbe (trade), or something in between? Each category comes with different registration steps, legal requirements, and even potential restrictions. For example, certain activities like coaching, design, or photography may be classified differently depending on how you describe them. A simple mistake can lead to being registered in the wrong Gewerbe, which may trigger unnecessary regulations, higher costs, or even conflicts with authorities. Speaking to an expert, whether it is the Gründerservice at the WKO, a tax advisor, or a specialised consultant, can save you from this headache. They can help ensure your official registration matches your real activities and aligns with your long-term goals. Getting it right the first time is a small but critical step that can prevent big administrative problems down the road.
2. Put aside 50% of your income to be on the safe side
One of the biggest surprises for new self-employed people in Austria is how unpredictable the financial side can be, especially in the first two to three years. While you may only pay small advances in the beginning, the Nachzahlungen (retroactive tax and social insurance bills) can hit hard once your true income is calculated. A safe rule many experienced freelancers follow is to immediately set aside 50% of every payment you receive. This may feel excessive at first, but it prevents stress later when a large tax or SVS invoice arrives. If your actual liabilities turn out to be lower, you will have a healthy savings cushion for holidays, equipment, or unexpected expenses. Think of it as paying yourself twice: once into your business account and once into your “future obligations” account. This practice also creates financial discipline and peace of mind, because you do not risk spending money that is not really yours yet. Even if you end up paying less than half, the habit of separating money early is one of the most effective strategies for sustainable self-employment in Austria.
3. Rethink whether to choose the reduced SVS contributions in the first 3 years
The SVS (Sozialversicherung der Selbständigen) allows new entrepreneurs to apply for reduced social insurance contributions for the first three years. At first glance, this sounds like a great deal: your mandatory monthly payments are much lower, leaving you with more liquidity to reinvest or support yourself. However, many self-employed warn that this option can backfire. Lower contributions mean lower pension credits and weaker social benefits. It can also create a false sense of affordability, making you underestimate what your long-term obligations will really look like once the reduced period ends. Suddenly, your monthly payments can double or triple, which can be financially shocking if you have not prepared. The decision should be strategic: if you expect a very low income in the beginning and need breathing space, the reduced option may help. But if you already anticipate stable earnings, paying the full SVS from the start helps you adjust early and secure stronger benefits.
It is worth running the numbers with a tax advisor before committing. Remember: the short-term relief might cost you in the long run if you do not plan carefully.
Check out our Guidebooks: "A complete guide to self-employment in Austria” - in each book, there's an entire chapter on SVS!
4. Do not panic about high taxes – remember the tax-free allowance
One common fear among new self-employed individuals is that as soon as they start earning, most of their income will vanish into taxes. In reality, Austria has a tax-free basic allowance (Grundfreibetrag) of €13,308 (2025). This means that if your profit is under that threshold, you will not pay income tax at all, though SVS contributions may still apply.
Even above this amount, the tax system is progressive, so you do not suddenly lose half your income to the state. This knowledge is empowering, especially for those starting small or gradually building their client base. It allows you to calculate more realistically what you will actually keep.
Combined with the Small Business Regulation for VAT (Kleinunternehmerregelung - allows businesses with a gross annual turnover up to €55,000 (2025) to be exempt from charging VAT), many beginners find that their initial tax burden is lighter than expected. Instead of fearing taxes, think of them as part of the rhythm of self-employment.
Having clarity about how much of your income is truly yours, and how much is set aside for obligations, makes the financial side of self-employment far less intimidating.
5. Build your support system: communities and tax advisors
Self-employment in Austria can feel isolating, especially if you come from a corporate or international background. Suddenly, you are the decision-maker, accountant, marketer, and worker all in one. That is why building a support system early makes a big difference. Communities of self-employed people, whether local meetups, online networks, or platforms like ours, offer not only emotional support but also practical insights. When you face your first SVS bill or wonder about deductible expenses, chances are someone in the community has been there before and can guide you. Alongside peer networks, a reliable tax advisor is a must. They do not just “do your taxes” – they help you optimise your financial setup, avoid costly mistakes, and understand which expenses you can legally deduct. Many self-employed regret not investing in professional advice earlier, because the money saved often outweighs the fee.
In short, do not try to do everything alone. Surround yourself with people who understand the journey, because their knowledge and encouragement will help you stay motivated and make smarter business decisions.
Starting as self-employed in Austria does not have to mean walking blindly into a system you do not understand. With some preparation and clear information, you can avoid the most common problems and set yourself up with more security and confidence. Knowing how to handle SVS, taxes, and your registration details makes a big difference in the long run.
If you’d like to learn more about this topic, the webinar recording is available in our library.
