Finland taxes at the source. Your employer withholds tax from every salary based on a card that you get from the tax office, and once a year you check a pre-filled return. It is simple once you have the card, and expensive for a few months if you do not.
The tax card (verokortti)
The card states your withholding percentage (ennakonpidätysprosentti) and an income limit for the year. Your employer applies the percentage to every payslip. It is not a physical card any more; it is a document in OmaVero that Vero sends to your employer electronically once you give permission.
Get it before the first payday. Without it the withholding is 60 percent.
How: log in to OmaVero (vero.fi) with bank credentials, choose tax card, enter your expected income for the rest of the year and any deductions, and the card is issued immediately. No credentials yet? Visit a tax office with your passport, residence permit and employment contract.
The percentage is an estimate. If your income changes, order a new card; it is free and instant.
Reading the payslip (palkkalaskelma)
| Finnish | Meaning |
|---|---|
| bruttopalkka | gross salary |
| ennakonpidätys | tax withheld |
| työeläkemaksu (TyEL) | your pension contribution, about 7 percent |
| työttömyysvakuutusmaksu | unemployment insurance contribution, under 1 percent |
| ay-jäsenmaksu | union fee, if deducted at source |
| lomaraha | holiday bonus, paid in summer |
| ylityö | overtime |
| nettopalkka, maksetaan | net pay, the amount paid |
The gap between gross and net is typically a quarter to a third for a middle income. The net salary calculator shows your own case.
The tax return (veroilmoitus)
Every spring Vero sends a pre-filled return for the previous year in OmaVero. Employers, banks and Kela have already reported everything. You check it, add deductions the system does not know about, and either do nothing (it is accepted as is) or edit it by the deadline in May. The final assessment comes in the summer or autumn: a refund to your account or a bill.
Deductions worth knowing: commuting costs above a threshold, union fees, work tools, and the household deduction (kotitalousvähennys) for cleaning or renovation services bought at home.
Special cases
- Tax number (veronumero) for construction sites, from Vero, required on the ID card at every site.
- Six-month rule and non-residents: if you stay under six months you may be taxed as a non-resident at a flat rate. Vero's "arriving in Finland" page has the decision tree.
- Key employees: certain foreign specialists can apply for the flat 32 percent tax scheme for the first years; the employer usually knows.
- Church tax: if you registered as a member of the Evangelical Lutheran or Orthodox church at DVV, one to two percent is added. Registration is optional.
What the tax pays for
Healthcare, schools and daycare with near-zero fees, free university, generous parental leave, unemployment support, pensions, libraries, and the roads that are ploughed at four in the morning. Newcomers who arrive from low-tax countries feel the withholding in the first year and the services in the second.