The national currency is the Euro (EUR). In 2022, EUR 0.96 was equal to USD 1. In that year, the average worker earned EUR 53 310 (Secretariat estimate).

Spouses are taxed separately for earned income.

  • Work-related expenses: A standard deduction for work related expenses equal to the amount of wage or salary, with a maximum amount of EUR 750 is granted.

  • Tax credit: An earned income tax credit is granted against the central government income tax. If the credit exceeds the amount of central government income tax, the excess credit is deductible from the municipal income tax and the health insurance contribution for medical care. The credit is calculated on the basis of taxpayers’ income from work. The credit is 12 percent of the amount of income in question. However, the maximum amount of the deduction is EUR 2 030. The amount of the credit is reduced by 2.03% for the portion of net earned income exceeding EUR 22 000. To the extent that the taxpayer's net earned income exceeds 70,000 euros, the amount of the credit is reduced by 1.21 percent for the exceeding amount. The credit is fully phased out when taxpayers’ income is about EUR 158 000.

  • An earned income tax allowance is calculated on the basis of taxpayer’s income from work. The allowance amounts to 51% of income between EUR 2 500 and EUR 7 230 and 28% of the income exceeding EUR 7 230, until it reaches its maximum of EUR 3 570. The amount of the allowance is reduced by 4.5% on earned income minus work related expenses exceeding EUR 14 000.

  • A basic tax allowance is granted on the basis of taxable income remaining after the other allowances have been subtracted. The maximum amount, EUR 3 870, is reduced by 18% on income exceeding the aforementioned amount.

  • Membership fees: Membership fees paid to employees' organisations or trade unions.

  • Travelling expenses: Travelling expenses from the place of residence to the place of employment using the cheapest means in excess of EUR 750 up to a maximum deduction of EUR 8 400.

  • Double housing expenses: If the place of employment is located too far from home in order to commute (distance > 100km), the taxpayer can deduct the costs of hiring a second dwelling located near the place of work up to EUR 450 per month. This deduction can be claimed only by one person per household.

  • Other work-related outlays: Outlays for tools, professional literature, research equipment and scientific literature, and expenses incurred in scientific or artistic work (unless compensated by scholarships).

Travelling expenses and other work related outlays are deductible only to the extent that their total amount exceeds the amount of the standard deduction for work related expenses.

Central government income tax:

The tax base of the local income tax is taxable income as established for the income tax levied by central government.

Municipal tax is levied at flat rates. In 2023 the tax rate varies between 4.36 and 10.86%, the average rate being approximately 7.38%.

Municipal tax is not deductible against central government taxes.

In 2023, the rate of the health insurance contribution for medical care paid by an employee is 0.60%. The tax base for this contribution is net taxable income for municipal income tax purposes.

In addition, there is an employees’ pension insurance contribution that amounts to 7.15% of gross salary, an employees’ unemployment insurance contribution equal to 1.50% of gross salary and a health insurance contribution for daily allowance equal to 1.36% of gross salary exceeding € 15,703 (0.00 % on income less than € 15,703). For employees aged 53 to 62, the pension insurance contribution amounts to 8.65% of gross salary. These contributions are deductible for income tax purposes.

The rates do not differ.

The average rate of the employers’ social security contribution in 2023 is 21.20% of gross wage.


The central government pays in 2023 the following allowances (EUR):

The child subsidy for a single parent is increased by an annual amount of EUR 819.60 for each child.

The responsibility for organizing public healthcare, social welfare, and rescue services was transferred from municipalities to wellbeing services counties starting from 2023. The key objective of this reform was to improve the availability and quality of basic public services throughout Finland. Municipal tax revenue was transferred to the central government to finance activities of the wellbeing services counties. Approximately EUR 14 billion in earned income taxes and around EUR 1 billion in corporate income taxes were transferred. Additionally, the central government transfers to municipalities concerning health and social services were cut by approximately EUR 7 billion.

Changes in earned income taxation were implemented within the existing tax system. Municipal tax rates in all municipalities were reduced by 12.64 percentage points, and central government taxation was tightened accordingly. The tightening of central government taxation was achieved by changing the income tax scale and adjusting several parameters for reducing income taxation. At the same time, tax bases for central government and municipal taxation were combined. This meant that from 2023 onwards, income deductions were granted on the same basis and at the same level in both state and municipal taxation.

Changes in earned income taxation were implemented so that they had as little impact as possible on the level of taxation of taxable persons. The purpose of the reform was not to ease or raise the taxation of anyone. As a result more earned income tax is now paid to the central government and correspondingly less to the municipalities. The overall level of taxation has remained almost unchanged. In accordance with the Government Programme, the reform was carried out in such a way that changes in the tax structure did not, upon entry into force, lead to a tightening of taxation on any income level (by more than 0.2 %-points).

Adjustments for inflation and rise of earnings levels were made to the central government tax scale in 2023.

The maximum amount of the basic allowance in municipal taxation was raised from EUR 3 740 to EUR 3 870. The maximum amount of the earned income tax credit in state taxation was raised from EUR 1 930 to EUR 2 030.

Since 2012, the deductible share of home-loan interest has been reduced gradually, and for the tax assessment of 2022, 5% of home-loan interest was deductible. From 2023, the deductibility of interest expenses from home loans was abolished.

The Finnish figures are generally calculated as follows:

  • Gross annual earnings are calculated at an individual level on the basis of the hour’s usually worked, average hourly pay for the fourth quarter, and the share of annual periodic bonuses.

  • The earnings exclude sickness and unemployment compensations, but include all normal overtime compensations, bonuses, holiday remunerations and remunerations for public holidays.

No information is available.

The equations for the Finnish system are mostly on an individual basis except for the child benefit which is calculated only once. This is shown by the Range indicator in the table below. The functions which are used in the equations (Taper, MIN, Tax etc) are described in the technical note about tax equations. Variable names are defined in the table of parameters above, within the equations table, or are the standard variables “married” and “children”. A reference to a variable with the affix “_total” indicates the sum of the relevant variable values for the principal and spouse. And the affixes “_princ” and “_spouse” indicate the value for the principal and spouse, respectively. Equations for a single person are as shown for the principal, with “_spouse” values taken as 0.

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