The rates of personal income tax in Finland are relatively high. Together with employer contributions, they help to fund Finland’s high-quality health service and social security system. There are loads of deductions you can make if your expenses are related to your profession.
Foreign nationals working in Finland for less than six months
If you are staying in Finland for less than 6 months, the amount of tax you pay depends on the nationality of your company.
If you are working for a Finnish company you will have to pay Finnish withholding tax at a rate of 35%. This amount will automatically be deducted from your salary, as well as your social security and insurance contributions (about 7% of your salary). If you are insured outside of Finland and provide the A1 form, you will not need to pay the extra 7%.
You will need to get a Finnish personal identity code from your local register office and apply for a tax-at-source card from your local tax office. You should hand a copy of this card to your employer. When you have completed your period of employment your employer will provide you with a certificate that shows how much you have earned as well as how much tax you have paid. This certificate will be useful if you need to show it to the authorities in your home country.
If you are working in Finland for less than 6 months and are working for a foreign company you will not need to pay any taxes on your salary. Instead, you will submit a tax return form and only pay taxes in your home country.
Foreign nationals working in Finland for more than 6 months
If you are working in Finland for more than 6 months you will have to pay tax on your salary regardless of whether the company you are working for is Finnish or foreign. In Finland, taxation of an individual's income is progressive. In other words, the higher the income, the higher the rate of tax payable.
In 2019, the income tax rate (national tax) for an individual was between 6% and 31.25 %. In addition to direct taxation, there is also a municipal tax in Finland. This tax is payable by an individual on his or her income and it fluctuates between 16.5 and 22.5% depending on the municipal authority. Church tax of 1%- 2.2% is also payable.
You will have to pay an additional 7% towards social security and insurance contributions unless you are insured in another country and have provided the A1 certificate .
Also, you have to pay a Public broadcasting tax, 2.5% (max 163€) if you earn more than 14,000€ per year.
You will have to submit a tax return in Finland, and the rules regarding a Finnish personal identification code and the tax card remain the same as for those working in Finland for less than 6 months. You should inquire at your local tax office for details on how to apply for this card.