Bookkeeping, Accounting and Payroll in Austria

Bookkeeping and Annual Financial Statements

An Austrian GmbH must keep double-entry books (doppelte Buchführung) under the Unternehmensgesetzbuch (UGB), recording income, expenses, assets and liabilities in a form that supports a formal set of annual accounts. This obligation applies from the company's first financial year and does not depend on turnover, unlike the lighter regime available to some sole traders.

At the end of each financial year, the company prepares a Jahresabschluss — a balance sheet and profit-and-loss statement — and files it with the Firmenbuch. The filing is public: anyone can order an extract of a company's accounts from the commercial register. This is one of the trade-offs of limited liability that a sole trader, who files nothing publicly, does not face. Bookkeeping starts from the point of company formation, not from the first invoice.

Alongside the Firmenbuch filing, the company submits a separate annual corporate tax return (Körperschaftsteuererklärung) to the Finanzamt, calculated on the same financial year's results — see our guide to Austrian corporate tax for current rates. The two filings run in parallel and serve different authorities: the Firmenbuch entry is a company-law obligation to the commercial court, while the tax return is a submission to the tax office, and neither one substitutes for the other.

When a Statutory Audit Applies

Austrian company law sorts capital companies into size categories — small, medium-sized and large — using criteria set out in the Unternehmensgesetzbuch, and the category determines whether a statutory audit applies. A small GmbH is generally exempt from having its annual financial statements audited; medium-sized and large companies must have them examined by a certified auditor (Abschlussprüfer) before filing. Most newly formed GmbHs start in the small category and stay there unless turnover, balance-sheet total or headcount grow substantially. The size thresholds themselves are a question for a qualified accountant to confirm against your company's actual figures, not something to estimate from a general guide.

VAT Registration and the Small-Business Threshold

Every trading Austrian company registers for VAT (Umsatzsteuer) with the Finanzamt, unless it qualifies for the small-business exemption. Since 1 January 2025, that exemption (Kleinunternehmergrenze) applies up to EUR 55,000 gross annual turnover, up from EUR 35,000 net under the rule that applied through the end of 2024. A business that exceeds the new EUR 55,000 threshold by no more than 10% within the calendar year keeps the exemption through year-end for the excess; going over by more than 10% ends the exemption from that point on. Several sites still quote the pre-2025 figures — if you are comparing sources, check the date behind the number.

Once registered, a company files VAT returns (Umsatzsteuervoranmeldung) at regular intervals through the year, with an annual return consolidating the period; the interval depends on the size of the business. The small-business exemption is far more often relevant to a sole trader or freelancer than to a GmbH, most of which are formed with turnover expectations well above EUR 55,000 from the outset.

Payroll and Employer Contributions

Taking on even one employee brings an Austrian GmbH into the ASVG social-insurance system as an employer. Before the employee's first day, the company registers them with the relevant health insurer — the Oesterreichische Gesundheitskasse (OeGK) for most employees. From then on, it runs monthly payroll (Lohnverrechnung), withholds the employee's wage tax and social-insurance contributions, and pays its own employer-side contributions on top.

The employer-side ASVG rate for a standard employee totals 20.98% of gross salary, as of 2026:

Unfallversicherung stops once the employee turns 60. On top of the 20.98% ASVG figure, an employer also pays the Dienstgeberbeitrag (DB) — 3.7% since 1 January 2025 — the related regional surcharge (Zuschlag zum DB, reported at 0.28% to 0.40% depending on the federal state), and the BMSVG severance contribution (reported at 1.53%). These sit alongside the ASVG rate rather than inside it: treat them as separate line items rather than one combined percentage, since advisers differ on which elements they bundle into a single "all-in" figure.

Contributions are capped at the Höchstbeitragsgrundlage, the maximum monthly contribution base: EUR 6,930 for 2026 (EUR 231 per day), with a separate annual maximum of EUR 97,020 for special payments — the 13th- and 14th-month salary common in Austrian employment contracts. Salary above the monthly cap is not subject to further ASVG contributions. Payroll payments, like VAT payments, run through the company's operating account, not the capital deposit account used at formation.

Business Entertainment Costs (Bewirtungskosten)

Bewirtungskosten — the cost of entertaining clients or business partners, typically meals — is the deduction category foreign owners most often get wrong, usually by assuming it works like any other operating expense. It does not: Austrian tax law treats business entertainment as only partly deductible for corporate tax purposes, neither fully deductible nor fully disallowed. The exact deductible share is set by statute; confirm the current percentage with your accountant before claiming these costs, since treating entertainment as fully deductible is one of the more common corrections a tax audit makes to a foreign-owned company's accounts.

What foreigners get wrong is not only the rate — it is the documentation. A restaurant receipt alone does not establish a business entertainment deduction. Austrian practice expects a contemporaneous record of who attended and the business purpose of the meeting, kept together with the receipt, not reconstructed afterwards. Costs that are really just the owner-director's personal meals, with no documented business counterpart, are not entertainment expenses at all and should not be booked as such.

GmbH vs Einzelunternehmen

A GmbH and an Einzelunternehmen (sole trader) face different accounting obligations from day one, and the difference is the real answer behind the question of which is cheaper to run. The GmbH's obligations — double-entry bookkeeping, formal annual financial statements, Firmenbuch filing — apply regardless of size or turnover. An Einzelunternehmen below the size thresholds in the Unternehmensgesetzbuch may use simplified cash-basis income-and-expense recording (Einnahmen-Ausgaben-Rechnung) instead of full double-entry books, and has no Firmenbuch filing obligation in the ordinary case.

The heavier compliance load is the trade-off for limited liability, not an accident of GmbH paperwork — a structure that shields the owner's personal assets is, by design, one a court and a tax office can both inspect. More required deliverables mean more accountant time, which is the direction of the cost gap between the two structures, even without a fixed price attached to it. A sole trader's simpler books are not a lesser version of a GmbH's — they are what the law expects when there is no separate legal person to account for.

When You Do Not Need Outside Accounting Support

A dormant Austrian company — registered but not yet trading, with no invoices issued and no employees — still owes its annual Firmenbuch filing, but the bookkeeping behind a nil return is minimal enough that many founders manage it themselves, or with a few hours of a local accountant's time, rather than an ongoing service. The same is true for a one-person business under the EUR 55,000 exemption threshold: simplified cash-basis records are within reach of a founder who is comfortable with basic bookkeeping, and the compliance burden that makes a GmbH worth outsourcing simply is not there yet.

If your company is a subsidiary or branch of a foreign group whose home accountant already handles consolidated reporting, ask first whether that accountant can extend to the Austrian entity's statutory filings before assuming you need a separate local relationship — some can, particularly for straightforward holding structures with little local activity. None of this applies once the company is trading, employing staff, or approaching the small-company size thresholds: at that point, the obligations in the sections above stop being optional to get right.