Working in Finland

Information about taxation in Finland (in English) from the service number:

International tax matters, +358 29 497 024

• taxation of employees coming to work in Finland
• income from sources outside Finland
• relocations from Finland to another country

Finnish tax matters, +358 29 497 050

• tax card and tax returns, housing, property and appeals

www.vero.fi/en/About-us/contact-us/call-us/

A person living in Finland is a taxable person. According to the Act on Income Tax, Section 11, a person is a taxable person if s/he has an apartment and home in Finland, and has stayed in the country continuously for over 6 months.

Taxes in Finland go to the state, municipality, Social Insurance Institution and to the parish (if you are part of Evangelic Lutheran or Orthodox church).

In case you move to Finland from abroad, your taxation depends on several factors, e.g. the length of your stay in Finland.

1. Working less than 6 months in Finland: 35% Tax at Source

If you are going to stay in Finland for six months or less, you will pay 35% of your monthly income to Finland as tax at source. The tax will be reduced when your salary is paid. Before recovering the tax, the employer will reduce the net remuneration by 510 euros per month or 17 euros per day, this part of your earnings being tax free. You will only pay taxes on the sum remaining after the reduction. The reduction must be marked on the certificate of taxation at source provided by the Tax Office.

In addition to the tax, the employer will recover social security and insurance premiums from your remuneration (approximately 7% of your salary), unless you have a posted worker’s certificate from you country of domicile to prove that you are insured elsewhere.

Tax at source is a final tax, and normally you do not have to do any tax declaration to the Finnish tax authorities.

2. Progressive taxation – persons who reside in Finland for more than 6 months

In Finland, the state income taxation uses progressive taxation. Progressive taxation is applied to persons who reside in Finland for a period exceeding six months. Your employer will withhold taxes from your remuneration according to the percentage stated on your tax card. Your tax rate depends on your income. If you have little income, your tax rate is small. If you have more income, you pay more taxes. Whether you are paid by a Finnish or foreign employer does not matter.

When tax is withheld in advance, municipal tax and health insurance payment is paid from your remuneration, as well as taxes. Unless you have a posted worker’s certificate (A1 or E101 form), earnings-related pension and unemployment insurance premium (in total approximately 7%) are also withheld from your remuneration.

Tax card

You can collect your tax card from the Tax Office. Don’t forget to take along your contract of employment which shows how much you earn. The tax clerk will require this information to calculate your correct tax rate.

You have to deliver the original tax card to your employer yourself. This is very important, because without a tax card, you will be taxed 60% of your earnings. The employer shall store the tax card throughout its period of validity.

It’s good to monitor your income and tax rate throughout the year, because if you pay too little tax you will have to pay tax arrears the next year. If your income changes during the year, you can change your tax rate by getting an alteration tax card.

Pro completed Tax return

The Tax Administration will send a pre-completed tax return in March-April for every employee who has resided in Finland for over six months. The pre-completed information has been obtained, for example, from employers, banks, insurance companies and the Social Insurance Institution.

If the information on the pre-completed form is erroneous or incomplete, you must correct it and send the signed form to the Tax Administration. After that, sign the form and return it to the Tax Administration. You are entitled to tax deductions for example on the basis of some work-related expenses, extra housing required for work purposes, and domestic help or renovations you have had done in your home. These deductions have to be specified in the corrected tax form.

If all the information is correct, the pre-completed form does not have to be returned.

for More information about tax return, please see www.vero.fi/en/individuals/tax-cards-and-tax-returns/your_tax_return_and_tax_assessment_deci/

Tax office in Vaasa (Pohjanmaan verotoimisto)

Address: Poikkikuja 7, Vaasa

Opening hours:

• Mon - Fri 9:00 –12:00

To make an appointment, please call the national switchboard +358 29 512 000

For more information on taxation in Finland, please see:

Verohallinto - Tax administration

The University of Vaasa applies the university salary system (USS) in which the salary is based on the demands of the task and the personal work performance. The salary system is applied when the employment period exceeds six months.

The University of Vaasa applies the terms of the Universities’ Collective Agreement in all employment matters.

The salary is paid to permanent personnel the 15th day of each month and on the last bank day of every month to employees with a fixed-term contract. The salary is paid to the bank account given by the employee.

Your earnings-related pension is determined based on your earnings from work and self-employment throughout your working life. The amount of your pension depends on your earnings and an age-related accrual rate.

The earnings-related pensions are funded by the earnings-related pension contributions which are deducted from the earned income. These contributions are paid both by the employer and the employee. In 2021 the pension contributions of those who were less than 53 years of age were 8,55% of the earnings. Pension contributions amount to approximately 22 % of all wages and salaries, when the contributions paid by the employer are taken into account.

Information on pensions is available on the joint earnings-related pension scheme service site: www.työeläke.fi

Information on the development and realization of earnings-related pensions and on pension research in the Finnish Centre of Pensions website:
www.etk.fi/en/

For further information:

MELA helpline +358 29 435 11

www.mela.fi/en/about-mela/contact-us/

Research work funded by grants

A grant is a gratuitous payment paid by a public company or a private organisation to a person for doing artistic work or studying. Awarding a grant does not entail any economic benefit or any other benefit for the organization paying it.

The university can only pay grants to basic or doctoral level university students and its own personnel. If the grant recipient (of the university grant/scholarship) has an employment relationship with the university, the university grant is generally regarded as salary income. For this reason the employee must unconditionally apply for a leave of absence from his/her regular task for the grant period. Researchers working on the university’s own scholarships or scholarships grants given to the university by foundations can teach for maximum 10% of their annual working hours.

The grants must be publically announced to be applied for and information about them must be available to a sufficiently large extent. Grants require written applications and the documents stated in the announcement must be enclosed to the application.

Working on a grant does not form an employment relationship, which means that the benefits based on employment legislation and collective agreements do not apply to the grant recipient.

A grant recipient is not insured by the university in any manner and does not enjoy the occupational health services provided by the university. An exception to this practice for the occupational health services are the full-time researchers working on grants awarded by The University of Vaasa (grants by The University Foundation and The Nissi Foundation)

Grant researchers working on the university’s premises and using the appliances of the university sign an Agreement on conducting research in The University of Vaasa’s premises including the use of appliances.
 

The insurance obligation of the grant recipient

A grant researcher independently signs the necessary insurances including travel insurance.

The pension insurance for grant recipients has since the beginning of 2009 been implemented in accordance with The Farmers' Social Insurance Institution’s (Mela) practices. The insurance obligation applies to all grant recipients who have received a working grant from Finland. When the grant recipient has received the information about having been awarded the grant and shall begin or has begun the grant-funded work, he/she can apply for insurance. The insurance application must be submitted within 3 months of beginning the work at the latest. The full statutory insurance coverage (earnings-related pension and occupational accident insurance) can be had through one insurance application.

For further information, please visit Mela’s web pages: www.mela.fi/en/grant-and-scholarship-recipients

Taxation of grants

Grants awarded by private institutions (including universities) are tax-free if their total amount does not exceed 23 668,35 € per year (in 2021). Grants awarded for any other purpose than studies, scientific research or artistic activity are taxable income for the recipients regardless of which institution has awarded the grant.

The institutions awarding research grants can all have their own practices and regulations. Therefore, it is important that you read the grant decision carefully. Different conditions apply to different grants depending on which institution has awarded the grant.