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.
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.
1: https://www.theguardian.com/business/2016/feb/23/vienna-name...
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 :-)
If disposable income is what matters, I believe developers are much cheaper here.
In comparison to other countries like Germany, salaries are generally lower for software-related jobs (despite the GDP per capita being higher).
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.
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
That's just accounting fiction. You could as well make it so that the employer pays everything and proclaim there's zero tax. The employee has to make his entire cost (and more).
>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
Well yes, there's no financial reason for someone capable of earning more to be in Austria. Which means there are no companies that could use these people to their full potential. In other words brain drain.
Not like high tax is an exclusively Austrian problem. The only country in Europe with sane taxes is Switzerland.
In Switzerland you have to pay for insurance yourself however.
Your argument is flawed in that it reduces the talent competition to just one factor: the tax rate.
It ignores factors such as cost of living (which is, at least, equally important), and quality of life.
>> or excellent healthcare.
> which young people don't need
Nonsense. Young people need healthcare as well, be it for something trivial as flu medication or a visit to the dentist, or something far more serious.
In Europe, London and Berlin have much better access to capital and bigger startup scene; these things have to happen, you can't legislate them. Tax rate and business environment is the only thing that can be changed by at will and perhaps make the rest happen.
>It ignores factors such as cost of living (which is, at least, equally important), and quality of life.
Where Austria wins how? Don't cite average statistics: how is life in Austria better than the rest for someone earning ~€10k gross a month? Note that's always connected with the tax rate.
Want really cheap living? Go to Bucharest, great internet is a bonus, also many local developers, 16% linear tax. Want great quality of life? A waterfront property in Spain, Canarias, or even Bali, some guys work like that.
People may stay if it's ok, but to make them move to you, you need to be the BEST at some linear combination of all important factors.
>Nonsense. Young people need healthcare as well, be it for something trivial as flu medication or a visit to the dentist
Why do you need insurance for that? Just go and pay out of pocket. Btw there's no such thing as flu medication. The only medication you may need is something to decrease temperature, but that's OTC.
>or something far more serious.
Which is very unlikely if you are young. Even then, outside of US health care isn't that expensive.
Sport-related accident for instance. Especially ski accidents... and Austria is a land of mountains, and ski is very popular there.
Young people are more generally more likely to have accidents. Car-accident are also more prevalent (drinking...).
Young drivers are also really more likely to have a car accident (ask car insurance), not because they are this age or that age, but because they less experienced.
> Tax rate and business environment is the only thing that can be changed by at will and perhaps make the rest happen.
But the factors that cannot be changed at will are still factors.
>>It ignores factors such as cost of living (which is, at least, equally important), and quality of life.
> Where Austria wins how? Don't cite average statistics: how is life in Austria better than the rest for someone earning ~€10k gross a month?
That's €5600 after taxes (not counting the 13th and 14th salary, which are regulated bonuses), according to the site you cited earlier. Deduct €1500 for a 75sqm penthouse apartment with terrace in a nice part of town (that's on the expensive side for 75sqm). That leaves you with a discretionary income of €4100/month, since health care etc. are already taken care of.
How much do you have to make in London to have that much discretionary income?
And that's just one factor. Other factors include, but are not limited to: safety (excellent for a city of almost 2m), cultural (art, music), culinary, incredible cleanliness, entertainment, access to healthcare, diversity (Vienna is considered a hub towards the east, and has historically been an international hub).
> Want really cheap living? Go to Bucharest, great internet is a bonus, also many local developers, 16% linear tax.
How much discretionary income does a good developer in Bucharest have?
> Want great quality of life? A waterfront property in Spain, Canarias, or even Bali, some guys work like that.
How safe is Bali? Do I have access to something equivalent to the Vienna Philharmonics, or say a smaller ensemble in the Imperial Palace there? How are the hospitals?
A location cannot be reduced to one or even a few dimensions. The Mercer Quality of Living Survey [1], which has consistenly ranked Vienna #1 in the past years, cites a total of 39 factors, for example.
[1] https://en.wikipedia.org/wiki/Mercer_Quality_of_Living_Surve...
You don't pay VAT on everything. The VAT is sometimes called regressive tax for this exact reason.
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...