Employer Tax Contributions

Tax Type	Rate	Base
Pension Insurance (TyEL)	Average 17.38%	Employee's gross salary
Health Insurance	1.87%	Employee's gross salary
Unemployment Insurance	0.20% (up to €2,455,500 wages); 0.80% (exceeding)	Employee's gross salary
Accident Insurance	Average 0.54%	Total salary

Filing & Compliance

• Monthly Reporting: File an earnings payment report for each employee, even for months with no wages, to the Incomes Register.
• Payment Due Dates: Pay employer's contributions via MyTax by the 12th day of the month following payroll payment.
• Registration: Register with the Employer Register if a regular employer (e.g., two or more permanent employees or one permanent plus temporary employees).

In Finland, employees are subject to various deductions from their gross pay, primarily for taxes and social security contributions. These deductions are determined by factors such as income level, municipality of residence, and individual circumstances.

Income Tax

• State Income Tax: Progressive tax rates apply. As of 2025, the tax brackets and rates are as follows:

  • €0-€19,900: 0%
  • €19,901-€29,700: 12.64% (on the excess over €19,900)
  • €29,701-€49,000: 19% (on the excess over €29,700)
  • €49,001-€85,800: 30.25% (on the excess over €49,000)
  • Over €85,800: 34% (on the excess over €85,800)

• Municipal Income Tax: Varies by municipality. Helsinki's rate, for example, is 18.5% for 2025.

• Church Tax: Levied on members of the Evangelical Lutheran Church or the Finnish Orthodox Church. The rate varies but averages around 1-2%.

Social Security Contributions

• Pension Contributions (Työeläkemaksu): A percentage of earnings, typically around 7-8%, depending on age.

• Unemployment Insurance (Työttömyysvakuutusmaksu): Contributed by both employees and employers, with the employee's share being around 1.5%.

• Health Insurance: A percentage of earnings, also dependant on age.

Other Deductions

• Trade Union Fees: Deductible if the employee is a member of a trade union.

• Workplace Commute Expense deduction: Travel expenses between home and work are deductible with a maximum allowance of €7,000 and after exceeding a threshold of €900. Public transportation costs are generally the basis of this deduction unless another means of transport is cheaper or there is no public transport link.

Deductions and Allowances for Business Travel

• Mileage Allowance: €0.59 per kilometer for using a private car for business travel.

• Tax-Exempt Reimbursements: Employers can reimburse employees for other business travel expenses (e.g., accommodation, meals) tax-free, up to limits set by the Tax Administration.

Tax Year and Deadlines

The Finnish tax year aligns with the calendar year (January 1st to December 31st). Employers must withhold taxes and social security contributions from employee salaries and report them to the Tax Administration monthly. Individuals typically receive a pre-completed tax return in the spring and can file their final tax return online through MyTax, by mail, or with assistance from tax advisors. The deadline for filing the tax return is usually in May. It is advisable to confirm the exact date as this information is valid as of February 5, 2025.

Seafarers

For employees working aboard Finnish ships, a 35% tax-at-source rate is applied to their pay. A deduction of €510 per month (€17 per day) is permissible before withholding if the employee possesses a tax-at-source card with the applicable deduction. Assessment under the progressive tax scheme can be requested as an alternative.