The financial situation of the Habsburg territories in the sixteenth and seventeenth centuries was disastrous. Most of the expenditure went on the numerous military conflicts.
The budget was burdened not only by the increasing number of civil servants but also by the continuously growing Court maintained by the rulers and the members of their families. In the sixteenth century the Habsburg emperors each had an entourage of some six to eight hundred persons, and they all had to be paid.
However, civil expenditure on the Court and civil servants accounted for only about one-third of total expenditure, and it was modest in comparison with the enormous sums that went on wars. It was above all the defence against the Turks in the Hungarian territoires and in the Slavonian districts of Croatia that sent costs soaring. In the 1570s and 1580s some 22,000 soldiers were stationed there to defend the borders. That represented approximately one per cent of the population of the Kingdom of Hungary. Savings could not be made when it came to paying the soldiers: if this was not done then it was not unusual for them to stage a mutiny or to hand over a fortress to enemy troops. Moreover, the construction and renovation of fortifications was also expensive, as was the provision of military equipment, for example firearms, which were rapidly coming into widespread use, and last but not least there was the high cost of military administration. The total costs can only be estimated, because in border areas the population had to supply provisions for the military. However, the cost of the wars was so high that the Kingdom of Hungary could not raise the money needed on its own, and the defence against the Turks was also financed by contributions from the Austrian and Bohemian provinces and from the Holy Roman Empire. In the archduchies of Upper and Lower Austria the tax burden on the population was so great that it led among other things to revolts by the peasants, which were bloodily suppressed.