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  50 774 (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 amounts to 13% of income exceeding EUR 2 500, until it reaches its maximum of EUR 1 930. The amount of the credit is reduced by 1.96% of the earned income minus work related expenses exceeding EUR 33 000. The credit is fully phased out when taxpayers’ income is about EUR 132 000.

  • Interest: Interest on loans associated with the earning of taxable income, 5% of the interest on loans for the purchase of owner-occupied dwellings, and student loans guaranteed by the state can be deducted against capital income. Of the excess of interest over capital income, 30% (32% for first-time homebuyers) can be credited against income tax up to a maximum of EUR 1 400.

  • 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 2022 the tax rate varies between 17.00 and 23.50%, the average rate being approximately 20.01%.

Municipal tax is not deductible against central government taxes. Work-related expenses and other non-standard deductions are deductible, as for purposes of the central government income tax.

  • 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 3 740, is reduced by 18% on income exceeding the aforementioned amount.

In 2022, the rate of the health insurance contribution for medical care paid by an employee is 0.53%. 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 1.18% of gross salary. 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 2022 is 21.12% of gross wage.


The central government pays in 2022 the following allowances (EUR):

The child subsidy for a single parent is increased by an annual amount of EUR 759.6 for each child.

Adjustments for inflation and rise of earnings levels were made to the central government tax scale in 2022.

The maximum amount of the basic allowance in municipal taxation was raised from EUR 3 630 to EUR 3 740. The maximum amount of the earned income tax credit in state taxation was raised from EUR 1 840 to EUR 1 930.

Home-loan interest counts at 5%, down from 10%, as deductible/creditable interest.

There are no specific personal income tax measures due to the covid-19 pandemic. Financial support for individuals and households has been granted in the form of direct benefits rather than through tax measures.

The Finnish tax deferral scheme concerning payment arrangements with eased terms was based on a temporary legislative amendment, which allowed for a late-payment interest rate of 2.5% (lowered from the standard 7%) to be applied on all and any taxes (incl. PITs and SSCs) included in a payment arrangement that fell due between 1 March and 31 August 2020 as well as on repaid VAT. In addition, the temporary amendment allowed for the first payment instalment to be postponed until three months after the start of the arrangement. In 2021 the tax deferral scheme was renewed with similar terms as in 2020 to be applied on all and any taxes (incl. PITs and SSCs) included in a payment arrangement that fell due between 1 March and 31 August 2021. In 2022, the tax deferral scheme was eased by extending amortisation periods for payments due between 1 January and 31 March 2022.

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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