In Croatia the total would be about 63%. If you go through capital gains (no paycheck just profit after corporate tax, capital income tax and VAT) it's 53%. It could go down if some company expenses can be used for your life expenses.

In Austria the total is 75%. In Austria going through capital gains would still be 70%.

I'm very disappointed at how much money Europe sucks out of my work.

I call bullshit on the tax rate in Austria.

"Capital gains" through GmbH is 25% KÖSt (Körperschaftssteuer) and then 27,25% KESt on Profit. The highest VAT rate is 20%, there are also lower ones. This results in 56.35% percent including VAT (1-((1-25%)(1-27.25%)(1-20%)).

If you go through income tax as a freelancer this is even lower when you claim the default deductibles (Pauschalierung), which is common in IT jobs, because you have very low expenses. The later is also cheaper if you factor in health insurance.

Well, having a GmbH does not really allow a clean profit extraction without having employees, so when you eventually employ yourself you'll get to around 70%.

Austria is one of the worst countries in the world to do any kind of small business. Self-employment is also taxed aggressively.

A form of self-employment in Croatia allows a fixed tax payment of about 5k EUR a year with an income cap of 39k EUR per year, leaving you with 34k EUR after taxes. Similar thing in Serbia but even more money.

In Austria there's nothing like that.

It would be nice if it was possible to assign a significant amount of life expenses to business but that also is heavily bureaucratized and regulated that even buying a 5k EUR computing machine has weird tax consequences (not immediately deductible as expense in the full amount or now, because expenses are higher, you might not be able to take that 12% of profit untaxed).

I mean, I guess I'm just miserably following every word of law and my accountant's advice and maybe other people just ignore a bunch of these guidelines and hope that inspection never comes.

39k EUR a year in Austria is 33% tax+insurance+pension:

20% "forced savings" (Pension + Vorsorgekasse) 7% health insurance 6% income tax

But 39k a year is definitely not a freelance programmer in Austria.

80-120k is the average I see at my colleagues and enterprise customers for freelance programmers with regular working hours compared to regular employees (5 week vacation, sick absence, ...). I know people scratching at 200k, but they are senior consultants.

So a more realistic view would be 100k 40,5% tax+insurance+pension 15% "forced savings" (Pension + Vorsorgekasse) 6% health insurance 19,6% income tax

This calculation assumes that you do not really have significant expenses of business. Having those actually makes the picture look worse.

You can calculate here for yourself, no "cheating" required: https://abrechnen.wko.at (official chamber of commerce calculator)

A GmbH is always better at 220k+/year. But there may be reasons you would want one earlier (liability, employees, IP, investments, ...)

Employing people in Austria is expensive ("cost of labor"). Beeing self employed is not bad, if you factor in benefits and costs of life and quality of life.

Well, 34k after taxes in Zagreb, Croatia is about 50k after taxes in Vienna. Given the increased cost of living and quite similar bureaucratic and regulation heavy state I'd say the self-employment is very aggressively taxed. For 50k after taxes you need to earn quite a lot compared to 39k in Croatia and the benefits are not that much different.

> I'm very disappointed at how much money Europe sucks out of my work

Are you owner of property like apartment or house there? Just wandering, if that makes a significant personal economic difference for owning it in EU.

I do not own anything substantial. Saving for a house in the capital city would take about 15 years of frugal living as a programmer. I could also take a loan.

What I also dislike is the tax prepayments for business owners, which is basically legal theft. The government takes tax in advance and then gives you back the money if you overpaid after about a year. I wouldn't mind this if taxes were low.

Imagine being a business owner and there's a period of irregular income yet the advance tax payment arrives and bankrupts you.

The taxes here are just insanely high and everything is insanely inefficient. Healthcare, education and municipal services.

After moving from Croatia to Austria, it's much worse in Austria, a wealthier country but still, I see all of the same patterns of inefficiency and they are even worse because Croatia can't afford being so inefficient.

If you can back it up with numbers you can request to reduce the prepayments. This request is usually granted.

Only if you buy stuff, though. Which was hard this year in particular, and not terribly useful once basic needs are met.

But one of the reasons why buying stuff was so hard last year (which I imagine is what you meant) was because people were buying a lot more stuff.

GP is based in UK where lockdowns closed shops. So it was literally hard to buy things when shops are closed.