Earned income allowance

The deduction called ‘earned-income allowance’ (ansiotulovähennys; förvärvsinkomstavdrag) will no longer be available starting 2025.

Earned-income allowance in 2024

You can be given the deduction called ‘earned-income allowance’ if you receive wages, profit-shares of a small business, or other comparable earnings. However, income consisting of a pension or of social benefits does not qualify.

The earned-income allowance concerns both state taxes and municipal taxes.

Amounts of the earned-income allowance in 2024:

• The maximum deduction is €3,570.
• The deduction is 51% if the amount of qualifying income is between €2,500 and €7,230. 
• For the part that exceeds €7,230, the deduction is 28%.

If your net taxable earned income exceeds €14,000, the deduction is reduced by 4.5% of the exceeding amount. When it is reduced, all your earned income – including pensions, unemployment benefits and sickness allowance – is included as income.

If your net taxable earned income is more than €94,084, you cannot get this deduction at all.