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A freelancer’s income tax arrives in stages rather than as one bill. The first assessment taxes that year’s profit, fixes prepayments for the following year and hands the SVS (Sozialversicherungsanstalt der Selbständigen, the social insurance institution for the self-employed) the figures for its own recalculation, so year two can carry all three at once. This article covers people who are tax resident in Austria and self-employed, with or without a trade licence; income tax and the SVS rules are federal and the same in every state.
The assumption to drop is that the first year’s tax bill is the whole story. Austria taxes cash-basis profit after SVS contributions and the profit allowance, then collects the following year’s tax in advance on the strength of the first assessment. The SVS catch-up for the first year is triggered by that same assessment.
The sections below follow the order in which the pieces are applied: the profit, the SVS deduction, the allowance, the return, then the prepayments. A three-year example near the end puts numbers on how they stack up.
Cash-basis profit: what gets taxed
Austrian tax law taxes a self-employed person on profit, not turnover. A freelancer with no duty to keep books works it out by Einnahmen-Ausgaben-Rechnung (cash-basis accounts): business receipts minus business expenses (Betriebsausgaben). The method is open to anyone with no legal duty to keep books who doesn’t keep them voluntarily, according to the income tax act’s rule on determining profit (in German).
Cash-basis means the calendar year of payment decides. The business service portal says the accounts follow money in and money out, so under its page on cash-basis accounts (in German) an invoice sent in December and paid in January is January’s income. The same goes for a supplier bill paid in January.
The result goes onto the E 1a supplement of the return, covered below. Equipment, travel and records are the subject of the article on business expenses and the article on bookkeeping, and the article on flat-rate options covers the alternative to counting actual costs. VAT runs on turnover and has its own rules: the small-business exemption and registration and returns each have an article.
SVS contributions come off profit in the year you pay them
The SVS contributions for pension, health and accident insurance are business expenses under the same income tax act. Under the cash rule they come off profit in the year they are paid, not the year they relate to.
That timing matters because the SVS bills in two steps. Its information sheet for new self-employed people (in German) says contributions run provisionally on the minimum base in the first three calendar years, and that once the tax assessment reaches the SVS it fixes the final base and recalculates (Nachbemessung). The catch-up is a payment like any other: it is deducted when paid, in whichever year that falls.
The final base starts from the profit on the return and adds back the pension and health contributions the SVS prescribed for the year, according to the statute on the contribution base (in German). So the SVS works from profit before its own contributions, while the tax office works from profit after the contributions paid in the year. In a steady year the two sit close together; in the year a catch-up is paid, they drift apart.
Tip
The deduction follows the day the money leaves the account, not the date on the SVS bill. A bank statement of the year’s SVS payments is the record to check against the contributions line of the cash-basis accounts.
The article on SVS registration and contributions covers the rates and registration, and the article on how social insurance works the wider system.
The profit allowance: the basic part
The Gewinnfreibetrag (profit allowance) is an allowance (Freibetrag): it comes off profit before the tariff applies, unlike a tax credit (Absetzbetrag), which comes off the tax afterwards.
Its basic part, the Grundfreibetrag, needs no investment. It is 15% of profit up to EUR 33,000, so at most EUR 4,950 a year, according to the business service portal’s page on the profit allowance (in German). The income tax act says the same.
For a hypothetical freelancer, the allowance is worth its amount times the rate on the slice of income it removes. The investment-related part sits on top for profit above the limit and needs qualifying investments; the article on the profit allowance covers it in full.
One change is enacted. The budget law for 2027 and 2028, published in the Federal Law Gazette (in German) on 29 July 2026, ends the current securities rule for the investment-related part after business years that begin before 1 January 2027, and its new version lists securities only for business years beginning after 31 December 2029. The Gazette text read for this article does not change the basic part, so a freelancer whose profit stays under the limit is not affected either way.
The return: E 1, the E 1a supplement and the deadlines
Self-employed income goes on the income tax return (Einkommensteuererklärung), form E 1, filed through FinanzOnline (the finance ministry’s online portal). The business supplement is E 1a, a standardised statement of receipts and expenses; the portal’s page on the income tax return (in German) says no separate cash-basis statement has to be filed beside it. The cash-basis page names E 1a-K as the simplified supplement for small businesses.
The tax office can ask for a return. Without a request, one is due when the year’s income, with no wage-tax income in it, passes EUR 13,539, the top of the zero-rate band, according to the income tax act’s rules on returns (in German). Filing is electronic unless that is unreasonable for technical reasons.
An employee with a side business meets a different test. Other income above EUR 730 a year makes the employee assessment compulsory, which the article on the employee assessment explains. The article on tax return forms maps each situation to its form, and the article on the tax number and FinanzOnline covers getting access.
The deadlines depend on the route:
| How the return is filed | Deadline |
|---|---|
| Electronically through FinanzOnline | 30 June of the following year |
| On paper, where electronic filing is unreasonable | 30 April of the following year |
| Through a tax adviser in the quota system | 31 March of the second following year |
The tax office can extend a deadline on a reasoned application, which can be made in FinanzOnline. The quota system (Quotenregelung) applies to returns filed by professional representatives, and the federal fiscal code (in German) sets the 31 March date; which clients count is left to a ministerial regulation.
After processing, the tax office sends the assessment notice (Einkommensteuerbescheid). Tax that remains unpaid falls due one month after the notice is delivered, according to the fiscal code’s rule on due dates (in German). Appeals have their own article, on deadlines, the notice and appeals.
Prepayments, payment dates and interest
The assessment doesn’t only settle the past year. It also fixes the Vorauszahlungen (prepayments of income tax) for the current and later years, according to the business service portal’s page on prepayments (in German), and they are credited against the tax when each year is assessed.
The starting point is the tax assessed for the last assessed year, less certain amounts already collected at source. Where the prepayment first applies to the year after the assessed year, the law adds 4%; for each later year it adds a further 5%. The result is rounded down to whole euros, and if the annual amount wouldn’t exceed EUR 300, it is set at zero, according to the income tax act’s prepayment rule (in German).
Payments fall due on 15 February, 15 May, 15 August and 15 November, a quarter each. If a notice sets or raises prepayments after some of those dates have passed, the difference is caught up on the next due date (the Ausgleichsviertel). By notice, the tax office can’t change the current year’s prepayments after 30 September, except on an application made by that date.
That date is also the freelancer’s lever. A reasoned application for lower prepayments, made by 30 September, is possible when the year’s tax will probably come out lower, and the portal’s page names a forecast calculation as one way to give the reasons.
Tip
The business service portal says that in the first business year a profit estimate can serve as the basis for income tax prepayments. A first-year prepayment is therefore possible; the example below assumes none was set.
Interest runs the other way too. Anspruchszinsen (interest on assessment differences) start on 1 October of the year after the tax year: a shortfall left after prepayments is charged, and an overpayment earns it.
The rate is the base rate (Basiszinssatz) plus 2 percentage points, and interest under EUR 50 isn’t charged, according to the fiscal code’s rule on interest (in German). The base rate moves, so this article prints no rate.
Three years of a hypothetical freelancer
The sums below follow one hypothetical freelancer through three years to show how the pieces above line up. Both the tax and the SVS side are calculated, since the cash squeeze comes from their timing.
Illustration
A hypothetical single new self-employed person (Neue Selbstständige), tax resident in Graz, Styria, starts on 1 January of year 1 with a steady profit of EUR 40,000 a year before any SVS contributions, and all three years run on the tariff and SVS values.
Assumptions: no trade licence, no employment, no children, not a US person, not international organisation staff, and under the small-business VAT limit, so no VAT figures in the receipts. Income tax and social insurance are federal, so Graz changes nothing. No tax credits, special expenses or other deductions apply, and the Selbständigenvorsorge (the self-employed severance scheme collected with the SVS bill) is left out to keep the sums readable.
The tariff and SVS values of are used for all three years as a simplification; the tariff thresholds are indexed each year, and no 2027 SVS value is published. SVS bills in all three years run provisionally on the minimum base and are paid within the year. The SVS base for the final recalculation is taken as the same EUR 40,000, so the add-back described above is ignored.
Timing: each year’s return is filed electronically and each assessment notice arrives by 31 August of the following year, before 1 October, so no Anspruchszinsen arise. That notice also sets the following year’s prepayments with the first-year uplift, and the SVS catch-up for the assessed year is billed after it and paid in the same calendar year. No prepayments are set for year 1.
Step 1, the SVS bills. The provisional bills use the minimum base of EUR 551.10 a month, which is EUR 6,613.20 over twelve months and equals the insurance threshold of EUR 6,613.20. The final bills use the base of EUR 40,000.
| Line | Provisional, minimum base | Final, base EUR 40,000 |
|---|---|---|
| Pension (18.50%) | EUR 1,223.44 | EUR 7,400.00 |
| Health (6.80%) | EUR 449.70 | EUR 2,720.00 |
| Accident (12 x EUR 12.95) | EUR 155.40 | EUR 155.40 |
| Total | EUR 1,828.54 | EUR 10,275.40 |
The catch-up for a year is EUR 8,446.86 (EUR 6,176.56 pension and EUR 2,270.30 health). It lands in year 2 for year 1 and in year 3 for year 2, so the SVS payments in years 2 and 3 are EUR 1,828.54 plus EUR 8,446.86, which is EUR 10,275.40 each.
Step 2, the tax base. Year 1 deducts only the provisional bills. Its profit of EUR 38,171.46 passes the limit of EUR 33,000, so the basic allowance sits at its cap of EUR 4,950. In years 2 and 3 the catch-up is deducted too, and the allowance is 15% of the lower profit.
| Step | Year 1 | Years 2 and 3 |
|---|---|---|
| Profit before SVS | EUR 40,000.00 | EUR 40,000.00 |
| SVS paid in the year | EUR 1,828.54 | EUR 10,275.40 |
| Profit for tax | EUR 38,171.46 | EUR 29,724.60 |
| Basic profit allowance | EUR 4,950.00 | EUR 4,458.69 |
| Tax base | EUR 33,221.46 | EUR 25,265.91 |
Step 3, the tariff. The bands apply, each taxed only on the slice of the base that falls inside it, as the article on how the income tax brackets work explains. The second band holds its full width of EUR 8,453; the third band holds EUR 11,229.46 of the year 1 base and EUR 3,273.91 of the years 2 and 3 base.
| Band | Year 1 | Years 2 and 3 |
|---|---|---|
| Up to EUR 13,539 at 0 % | EUR 0.00 | EUR 0.00 |
| Up to EUR 21,992 at 20 % | EUR 1,690.60 | EUR 1,690.60 |
| Up to EUR 36,458 at 30 % | EUR 3,368.84 | EUR 982.17 |
| Income tax | EUR 5,059.44 | EUR 2,672.77 |
Step 4, the prepayments. The year 1 assessment sets year 2 at EUR 5,059.44 plus 4%, which is EUR 5,261.82, rounded down to EUR 5,261. The year 2 assessment sets year 3 at EUR 2,672.77 plus the same uplift, which is EUR 2,779.68, rounded down to EUR 2,779.
Step 5, the cash out of pocket. Year 2 pays the year 1 tax in full, because no prepayments were made for it. Year 3 settles year 2: the tax of EUR 2,672.77 is smaller than the EUR 5,261 prepaid, so EUR 2,588.23 comes back.
| Year and payment | Amount |
|---|---|
| Year 1: SVS provisional bills | EUR 1,828.54 |
| Year 1: income tax | EUR 0.00 |
| Year 1: total out | EUR 1,828.54 |
| Year 2: tax for year 1 | EUR 5,059.44 |
| Year 2: prepayments for year 2 | EUR 5,261.00 |
| Year 2: SVS provisional bills | EUR 1,828.54 |
| Year 2: SVS catch-up for year 1 | EUR 8,446.86 |
| Year 2: total out | EUR 20,595.84 |
| Year 3: refund of year 2 overpayment | minus EUR 2,588.23 |
| Year 3: prepayments for year 3 | EUR 2,779.00 |
| Year 3: SVS provisional bills | EUR 1,828.54 |
| Year 3: SVS catch-up for year 2 | EUR 8,446.86 |
| Year 3: total out | EUR 10,466.17 |
Over the three years the freelancer pays EUR 22,379.34 to the SVS and EUR 10,511.21 net to the tax office (prepayments less the refund), EUR 32,890.55 in all, out of EUR 120,000 of profit. The example stops at year 3; from year 4 the SVS provisional base follows the profit of the third preceding year, so the provisional bills rise.
For a hypothetical freelancer on a steady profit, year 1 is the cheapest of the three: EUR 1,828.54 goes out of a profit of EUR 40,000. Year 2 takes EUR 20,595.84, because the first tax bill, a full year of prepayments and the SVS catch-up all land in the same twelve months. Year 3 falls to EUR 10,466.17, because the prepayments set from year 1 turned out too high and the overpayment is refunded.
The refund is the point to notice. The prepayments in year 2 were built on a year 1 tax that did not yet reflect the catch-up deduction, and a freelancer who sees that coming can apply for lower prepayments by 30 September. Whether to apply, and for how much, depends on the individual numbers, which is where a tax adviser earns the fee.
Where the general answer shifts
Contested flag
Whether freelance work counts as new self-employment, trade activity or disguised employment is decided on the facts, and it is contested ground. The classification decides which carrier and which contributions apply, so it feeds straight into the profit above. The SVS page on legal certainty for the self-employed (in German) describes a questionnaire that the SVS and ÖGK (Österreichische Gesundheitskasse, the health insurance fund for employees) use to check the classification, and says the ÖGK has to issue a formal decision if they disagree.
The article on new self-employment versus a trade licence covers where the line is drawn, and the article on false self-employment covers the money consequences. An individual case is for the carriers and an adviser.
Contested flag
The 2027 social insurance values aren’t published yet. Until they are, this article uses the 2026 values and says so wherever it does. The example above is an illustration of timing, not a forecast of any year’s bill.
Non-residents
This article covers people who are tax resident in Austria. Tax residence, not registration, decides, and the income tax act says unlimited tax liability (unbeschränkte Steuerpflicht) covers all income at home and abroad, while limited tax liability (beschränkte Steuerpflicht) covers only the listed Austrian-source income, according to the income tax act’s opening section (in German). The article on tax residency covers the test, and the article on non-residents with Austrian income the other side.
Cross-border commuters
A freelancer who lives in Austria and works across the border, or the reverse, can have the other country’s tax and insurance rules apply as well. Which country taxes what turns on the treaty and the person’s facts, and the article on freelancing for clients abroad covers the freelancer side. A tax adviser handles the individual case.
International organisation staff
Staff of international organisations in Vienna can have income tax and social insurance set by the headquarters agreement rather than by the rules above. The general answer here may not apply, and the organisation’s HR or legal office is the first route. The article on international organisation staff is the anchor.
US persons
US citizens carry a US return on top of the Austrian one, and the IRS says the self-employment tax applies to the self-employment income of any US citizen. Austrian contributions don’t settle that. The article on US persons covers the overlay, and a US-qualified tax professional is the route for the US return.
Bottom line
A freelancer’s income tax is spread across several moments: cash-basis profit after SVS contributions and the profit allowance, one assessment, and prepayments that follow it. For a hypothetical freelancer on a steady profit, the second year carries the heaviest cash load, because the first tax bill, a full year of prepayments and the SVS catch-up arrive together. The tariff sets what each year costs in tax; the timing rules decide when it leaves the account.
Getting help
For a return, prepayments or the allowance on a real case, the route is a Steuerberater (licensed tax adviser). The Chamber of Tax Advisers and Auditors keeps a public member directory, which is the place to check that someone is authorised before paying them. A general article like this one can’t stand in for advice on a real case.
For the bookkeeping behind the E 1a, a Bilanzbuchhalter (licensed bookkeeping professional) can help; the register of the bookkeeping authority (Bilanzbuchhaltungsbehörde) shows who is registered.
A holder of a trade licence is also a member of the WKO (Wirtschaftskammer, the economic chamber), which gives its members guidance. Questions about contributions and the catch-up bill go to the SVS, which issues the bills.
The article on tax and payroll help explains who may do what, and the business and freelance hub lists the rest of the series.
Official sources
- The income tax return, business service portal (USP) (in German)
- Income tax prepayments, business service portal (USP) (in German)
- The profit allowance, business service portal (USP) (in German)
- Information for new self-employed people, Social Insurance Fund for the Self-Employed (SVS) (in German)
- Income tax act: the rule on prepayments, Legal Information System of the Republic (in German)
- Budget law for 2027 and 2028, Federal Law Gazette (in German)
