Employer Tax Contributions

Tax Type	Rate	Base
Pension Contribution	~17.95%	Employee Gross Salary
Healthcare Contribution	~1.50%	Employee Gross Salary
Unemployment Insurance	0.20% (up to €2,455,500); 0.80% (exceeding €2,455,500)	Employee Gross Salary
Other Social Security Payments	~1.00%	Employee Gross Salary

Filing & Compliance

• Monthly payroll data and social security contributions must be reported to the Incomes Register within five calendar days of each payment date.
• Withheld income tax and employer social security contributions must be paid to the Finnish Tax Administration by the 12th day of the month following the payment month.
• Employers must obtain a valid tax card from each employee for income tax withholding.

Employee tax deductions in Aland Islands consist of income tax, social security contributions, municipal tax, and a voluntary church tax. As of 2025, the earned income allowance is replaced by an increased credit for work income. Additionally, the medical expense deduction is no longer available.

Income Tax

Aland Islands utilizes a progressive income tax system where higher earners pay a larger percentage of their income in taxes. The tax rates for 2025 are not yet publicly available. In addition to state tax, municipal and church taxes, along with health insurance contributions total approximately 18-27%.

Social Security Contributions

These contributions fund pensions, healthcare, unemployment benefits, and other social programs. The specific contribution percentages for employees are not yet publicly available.

Municipal Tax

Municipal tax rates vary by municipality within Aland Islands. The basic deduction for municipal taxation will be raised to €3,825 in 2025. Specific deductions previously available, such as for medical expenses, study costs, and student loan interest have been removed for the 2025 tax year.

Church Tax

Church tax is voluntary and applies only to registered members of eligible churches. The rate is typically around 1-2% of taxable income.

Tax Card and Tax Returns

Tax cards for 2025 are valid from January 1st and cover the full year. They're available in MyTax by December 13, 2024, with physical copies arriving by mail by the end of December. Tax return filing deadlines for wage earners and pension recipients are April 15th, 22nd, and 29th, 2025.

Other Deductions and Credits

While some specific deductions have been eliminated, some credits remain. The credit for work income increases in 2025, particularly for those with underage children. Single parents receive double the increase. Additionally, the household expenses credit is capped at €1,600 and calculated at 35% of expenses when hiring a company, and 13% when hiring an individual. The travel expense deduction remains capped at €7,000 with a credit threshold of €900.

The commuting deduction remains at €7,000, as in 2024, with a €900 threshold for the credit. Tax-exempt reimbursements for travel expenses are updated for 2025. Full daily allowance: €53. Partial daily allowance: €24. Meal allowance: €13.25. Tax-exempt kilometer allowance: €0.59 per kilometer.

It's crucial to consult official sources like the Aland Tax Administration or a tax professional for the most accurate and up-to-date information as details may change. This information is current as of February 5, 2025.