Taxation in Finland is mainly carried out through the Finnish Tax Administration, an agency of the Ministry of Finance. Finnish Customs, the Finnish Transport and Communications Agency Traficom, and pension funds also collect taxes. Taxes collected are distributed to the Government, municipalities, churches, and the Social Insurance Institution (Kela).
Finnish taxes can thus be broadly divided into four types: progressive state income tax other (mostly) flat-rate income taxes flat-rate property tax flat-rate consumption and property transfer taxes
Taxes on income Income (tulo) is categorized in Finnish tax law as either earned income (ansiotulo) or capital income (pääomatulo), essentially by stating that earned income is any salary paid in compensation for employment and "any income other than capital income". In general, as a tax is any compulsory financial charge levied on a taxpayer by a governmental organisation, all the payments listed here are taken into account as taxes.
Taxes on earned income Income taxation occurs in a series of phases, in which proportional taxes are deducted from gross income before the net income subject to state income tax is determined. An employee's gross earned income is subject to the following three proportional social security contributions: employee's pension insurance fee (työeläkevakuutusmaksu), paid to a pension insurance company employee's unemployment insurance fee (työttömyysvakuutusmaksu), paid to the state health insurance daily allowance contribution (sairausvakuutuksen päivärahamaksu), paid to the state The net earned income (gross earned income minus deductions) is subject to: income tax (tulovero) which is divided into progressive tax paid to the state (state income tax) proportional tax paid to the municipality (municipal tax) a church tax, proportionally paid to the parish (kirkollisvero) if the person is a member thereof proportional health insurance medical expenses contribution (sairausvakuutuksen sairaanhoitomaksu), paid to the state proportional Yle tax (yleisradiovero), paid to the state and collected to fund the public broadcasting company There is an automatic earned income tax credit (työtulovähennys) on certain taxes and fees, making them slightly progressive despite their fixed rates.
Pension insurance fees Every person that is 17–68 years of age and gets a salary as an employeeThe Employees Pensions Act (first link) provides that the employee contributes to a pension fund by paying a part from their compensation for employment – i.d., from their salary. What constitutes employment is defined in the Employment Contracts Act (second link): pays a certain amount of pension insurance fee on their gross income. The exact percentage is set annually by a decree of the Ministry of Social Affairs and Health.
The employee's fee is 7.15% in 2025. The employer's average is 17.38% on average in 2025.
Voluntary pension insurance contributions or transfers to a personal pension account are credited to earned income tax up to €5,000 per year. The Finnish system does not provide for voluntary contributions or employer matching.
Unemployment insurance fees Every person 18–65 years of age working as an employee in FinlandThe Act on the Financing of Unemployment Benefits (555/1998) section 12 subsection 1 (first link) provides that everyone employed in Finland is required to pay the unemployment insurance fee. Section 12a, subsection 1, paragraphs 1–2 (second link) provide for the age limit: is required to pay unemployment insurance fees on their gross work income. The employee's fee is levied on their gross work income. The employer's fee is proportionate to what they pay to all their employees, and it is not withheld from the employees' gross salaries – in effect, it is paid out of the employer's assets. The exact percentages of the fees are set by law to ensure the Employment Fund (Työllisyysrahasto) can pay out unemployment benefits. As of 2025, the fees are as follows: The employee's fee is 0.59%. The employer's fee is 0.20% for salaries up to €2,455,500 and 0.80% above that.The Act on the Financing of Unemployment Benefits (555/1998) section 2 subsection 2 (first link) provides that the percentage of the fee has to enable the Fund to pay out benefits. Section 18 subsection 1 (second link) provides for the 2025 percentages:
Health insurance daily allowance contribution Every person who is 16–68 years of age and works as an employee in Finland is required to pay the health insurance daily allowance contribution on their gross earned income. The fee rate is set annually by law at a level that secures funding for healthcare costs.The Health Insurance Act (1224/2004) chapter 18 section 24 subsection 1 provides that the fee should be adjusted annually to a level that secures national healthcare costs. Chapter 18, Section 24, Subsection 4 provides that the Government issues the decree adjusting the fee. However, in 2025, the percentage is set by law:
In 2025, the rate is 0.84% and applies to all gross earned income equal to or exceeding €16,862.
State income tax The following contributions are deducted from the gross income before determining the net income subject to the state income tax: natural deductions: automatic income-production deduction (tulonhankkimisvähennys); €750 in 2025 trade union membership fees expenses for the production of income (tulonhankkimismenot); all costs above the automatic income-production deduction other deductions: employee's pension insurance fee employee's unemployment insurance fee health insurance daily allowance contribution automatic basic deduction (perusvähennys); maximum of €4,115 (decreases the more the gross income gets, down to €0) The following progressive rates are levied on the net income (rates for 2025): Net Income OverTax Rate€012.64%€21,20019%€31,50030.25%€52,10034%€88,20041.75%€150,00044.25% The gross state income tax is subject to the following credits: several credits, e.g. household expenses credit (kotitalousvähennys); all costs above €150 (maximum €1,600) in 2025 automatic earned income tax credit; maximum of €3,225 in 2025 (decreases the more the gross income gets, down to €0) The other credits are first subtracted from the gross tax, then the earned income tax credit (työtulovähennys) is deducted. If there is any earned income tax credit left after deducting it from the gross state income tax, the remainder is subtracted from the gross municipal tax, gross health insurance medical expenses contribution, and gross church tax, proportionally.
Municipal tax The following contributions are deducted from the gross income before determining the net income subject to the municipal tax: natural deductions: automatic income-production deduction; €750 in 2025 trade union membership fees expenses for the production of income; all costs above the automatic income-production deduction other deductions: employee's pension insurance fee employee's unemployment insurance fee health insurance daily allowance contribution automatic basic deduction; maximum of €4,115 (decreases the more the gross income gets, down to €0) The municipal tax is levied on the net income. The municipality sets the rate, and in 2025 it ranges from 4.7% (Kauniainen) to 19.7% (Kökar), with an average of 9.28%. If there is any earned income tax credit left (after deducting it from the state income tax), the remainder is subtracted from the gross municipal tax, proportionally to its share in the sum of the gross municipal tax, gross health insurance medical expenses contribution, and gross church tax.
Health insurance medical expenses contribution The following contributions are deducted from the gross income before determining the net income subject to the medical expenses contribution: natural deductions: automatic income-production deduction; €750 in 2025 trade union membership fees expenses for the production of income; all costs above the automatic income-production deduction other deductions: employee's pension insurance fee employee's unemployment insurance fee health insurance daily allowance contribution automatic basic deduction; maximum of €4,115 (decreases the more the gross income gets, down to €0) The medical expenses contribution (1.06% in 2025) is levied on the net income. If any earned income tax credit is left after deducting it from the state income tax, the remainder is subtracted from the gross medical expenses contribution, proportionally to its share in the sum of the gross municipal tax, gross medical expenses contribution, and gross church tax.
Church tax If the individual is a member of the Evangelical Lutheran or the Orthodox Church, or any of the country-wide Lutheran parishes (the German parish in Finland and Olaus Petri parish for citizens of Sweden living in Finland), their net earned income is subject to the church tax (kirkollisvero). The following contributions are deducted from the gross income before determining the net income subject to the church tax: natural deductions: automatic income-production deduction; €750 in 2025 trade union membership fees expenses for the production of income; all costs above the automatic income-production deduction other deductions: employee's pension insurance fee employee's unemployment insurance fee health insurance daily allowance contribution automatic basic deduction; maximum of €4,115 (decreases the more the gross income gets, down to €0) The church tax is levied on the net income. If there are multiple parishes in a municipality, the rate is set uniformly for the entire municipality by the parish union (seurakuntayhtymä) representing all the parishes; otherwise, the rate is set by that parish. In 2025, the rate in Evangelical Lutheran parishes ranges from 1.0% to 2.0%. In the same year, the rate in Orthodox parishes ranges from 1.75% to 2.25%. If there is any earned income tax credit left (after deducting it from the state income tax), the remainder is subtracted from the gross church tax, proportionally to its share in the sum of the gross municipal tax, gross health insurance medical expenses contribution, and gross church tax.
Yle tax The following deductions are made on the gross income before determining the net income subject to the Yle tax: automatic income-production deduction; €750 in 2025 trade union membership fees expenses for the production of income; all costs above the automatic income-production deduction The Yle tax (2.5%) is levied on the net income above €15,150. However, the maximum tax is €160.
Collection of taxes on earned income The employer withholds the employee's pension insurance and unemployment insurance fees from each gross paycheck. The employer is responsible for choosing the pension insurance institution and pays the fee to the institution in conjunction with paying the salary to their employee. The pension insurance fees withheld by public-sector employers are paid to the dedicated agency Keva.
The employer withholds an additional portion of each paycheck and pays it to the Finnish Tax Administration. That portion is officially termed as a withholding tax (Finnish: ennakonpidätys, Swedish: förskottsinnehållning). It adds up to the total of the following liabilities:The Tax Prepayment Act (1118/1996) section 1 subsection 1 (first link) provides that the tax withholding concerns taxes enumerated in the Tax Collection Act (11/2018). The Tax Collection Act section 4 (second link) enumerates the said taxes: health insurance daily allowance contribution state income tax municipal tax health insurance medical expenses contribution church tax Yle tax