Income and deductions used in the calculation of tax rates and tax prepayments for 2023
Some calculation bases for tax rates and prepayments vary from year to year, whereas others are more stable. You can see the bases in your prepayment decision, which you may receive with your tax card, for example. On this page, we have collected calculation bases for income taxation.
The Tax Administration calculates the tax rate for your tax card and the prepayment amount based on the income and deductions in your latest finalised tax assessment. If you requested a change to your tax rate or tax prepayment last year, your this year’s tax card and prepayment calculation are based on the revised data. Occasional income is not included in the taxable income.
As a rule, capital income of less than €7,000 is taken into account in your tax card’s tax rate. Because of this, your tax rate may be higher but, on the other hand, no separate payment is generated, for example, for rental income.
As of 2023, part of the tax revenue that previously stayed with municipal entities is allocated to the State of Finland: A general decrease of 12.64 percentage points concerns municipal income taxes; this is compensated by a matching increase in state income taxes. The reform does not concern Åland.
Tax bases for earned income in 2023
- State income tax schedule 2023 (available in Finnish and Swedish, link to Finnish)
- Income tax rates of municipalities and parishes in 2023 (available in Finnish and Swedish, link to Finnish)
- Municipal income tax rate for non-residents (taxpayers living permanently abroad) 7.40%
- Health care contribution
- on wage and work income 0.60%
- on pensions, benefits and other income 1.57%
- Daily allowance contribution (for 16- to 67-year-olds)
- 0,00% for wage earners whose annual income is less than €15,703
- 1,36% for wage earners whose annual income is €15,703 or more
- 1,59% for self-employed individuals whose annual income is €15,703 or more
- 0,23% for self-employed individuals whose annual income is less than €15,703
- Additional tax on pension income 5.85% on the part of pension exceeding €47,000
- Public Broadcasting Tax 50% on income (capital and earned income) exceeding €14,000
- Åland Islands media fee €113 if income (capital and earned income in total) exceeds €14,000
The tax card and prepayment calculation takes into account, for example, the following deductions:
- Deduction for the production of income €750 but not more than the amount of wage income
- Earned income deduction from wage income and business income, no more than €3,570
- Credit for work income from wage income and business income, no more than €2,030 except:
- If the wage earner or self-employed business operator:
- has reached the age of 60 years before January 2023, max. credit is €2,230
- has reached 62 years before January 2023, max. credit is €2,430 or
- has reached 65 years before January 2023, max. credit is €2,630
-
the credit is 12% of the income entitling you to this credit
-
the deduction is reduced by 2.03% of the amount of net taxable income exceeding the 22,000-euro threshold, and reduced by 1.21% of the amount of net taxable income exceeding the 70,000-euro threshold.
- If the wage earner or self-employed business operator:
- Deduction for travel expenses, no more than €8,400 for the part exceeding the €750 credit threshold
- Interest on a loan relating to production of income. Deductions for interest expenses on a home loan are no longer available
-
the tax credit for disability is phased out
- Trade union fees and payments to unemployment funds
- Deductible voluntary pension insurance contributions
- Deduction based on the employee’s pension insurance contribution (7.15% or 8.65%) and unemployment insurance contribution (1.50%) (employer withholds the contribution from net wages and the corresponding amount is deducted in taxation)
- Basic deduction €3,870
- Further information on deductions
Tax rates for capital income
- 30% if capital income is no more than €30,000
- 34% on the part of capital income exceeding €30,000