Learn › Income tax in Finland

In short: Finnish earned income is taxed in layers: a progressive national tax (valtionvero) whose marginal rate runs from about 12.6% up to 37.5% in 2026, plus a flat municipal tax (kunnallisvero) averaging about 7.5%, plus smaller items like church tax and social-insurance contributions. Deductions such as the basic deduction (perusvähennys, up to about €3,980) reduce the taxed income first. Because municipal and state taxes apply together, the combined marginal rate on higher salaries can reach well above 40% — around 44% for top earners once contributions are included. As of 2026, check the official source (vero.fi / OmaVero) when in doubt.

Income tax basics in Finland

Kontoo editorial team · Updated 06/24/2026

In Finland, the tax on a salary or pension is built from several layers stacked on the same income. The state charges a progressive national tax (valtionvero) that rises in steps as you earn more; your municipality charges a roughly flat municipal tax (kunnallisvero); and there are smaller items such as church tax and social insurance contributions. Deductions, above all the automatic basic deduction (perusvähennys), shrink the income that actually gets taxed. This lesson explains how the pieces fit together for 2026 so you can read your own tax card with confidence. It is educational background, not personal tax advice.

Start with your gross earned income for the year — wages, pension, or benefits. This is the figure before any tax is withheld.
Apply deductions to reach taxable income. The automatic basic deduction (perusvähennys) is worth up to roughly €3,980 for low earners and tapers toward €0 as income rises; other deductions, such as the earned-income deduction, may also apply.
Calculate the progressive state tax (valtionvero) on taxable income using the 2026 bracket scale, where the marginal rate climbs from about 12.6% at the bottom to 37.5% at the top.
Add the municipal tax (kunnallisvero, averaging about 7.5% in 2026), plus any church tax and social-insurance contributions, to reach the total. The Tax Administration (Vero) combines all of this into one withholding rate printed on your tax card.

What matters

Finland is often described as a high-tax country, but the headline figure hides a layered structure. Understanding the layers makes your payslip far less mysterious. The first layer is the national income tax, valtionvero. It is progressive: income is sliced into brackets, and each slice is taxed at its own rate. For 2026 the marginal rate starts around 12.6% on the lowest taxable income and rises through several steps, reaching 37.5% on income above about €52,100 — the top state bracket, with no separate “solidarity” band. Only the income inside each bracket is taxed at that bracket’s rate, so moving into a higher bracket never reduces your take-home pay. The second layer is the municipal tax, kunnallisvero. Each municipality sets its own rate, broadly flat across income levels. In 2026 these rates run from about 4.7% (Kauniainen) to 10.9% (Pomarkku), averaging roughly 7.5% nationally. Major cities sit near the middle: Helsinki and Espoo are below average, while Tampere and Oulu are around 7–7.5%. Because this rate stacks on top of the national tax, your true marginal rate on an extra euro of salary is the sum of the two — which is why combined marginal rates above 40% are common for middle and higher earners. Deductions come before tax is calculated. The most important automatic one is the basic deduction, perusvähennys, worth up to about €3,980 in 2026 for low-income earners and tapering to zero as income rises. Other deductions, such as the earned-income deduction, further reduce the base. The result is that very low incomes can end up paying little or no income tax at all. Finally, smaller items ride alongside: church tax for members of the Lutheran or Orthodox churches (around 1–2%), the public-broadcasting tax (Yle tax), and social-insurance contributions such as the health-care contribution and the earnings-related pension and unemployment contributions withheld from wages. The Tax Administration, known as Vero, folds all of this into a single withholding percentage on your tax card. The online service OmaVero lets you view your card, see the underlying figures, and request changes. Once a year you receive a pre-completed tax return to check and correct. As of 2026, treat the numbers here as rounded illustrations and confirm current brackets, rates, and deduction limits on vero.fi.

ExampleWorked example (rounded, 2026). Suppose Aino lives in a municipality with the average kunnallisvero of about 7.5% and earns €40,000 in gross salary. • Deductions: assume the basic deduction and earned-income deduction together reduce her taxable income to roughly €37,000 (the basic deduction is largely phased out at this income level, so the effect is modest). • State tax (valtionvero): applying the progressive 2026 scale to about €37,000 of taxable income gives roughly €5,200 of national tax (the lower brackets are taxed at 12.6% and 19%, with the top slice around 30%). • Municipal tax (kunnallisvero): about 7.5% of €37,000 ≈ €2,775. • Combined income tax: roughly €5,200 + €2,775 ≈ €7,975, before church tax and social-insurance contributions. That is an effective income-tax rate of about 20% of gross pay, while her marginal rate on the next euro earned is closer to 38% (a ~30% state slice plus ~7.5% municipal). These figures are illustrative and rounded — your exact result depends on your municipality, deductions, and church membership. As of 2026, check vero.fi when in doubt.

To picture how money you keep could grow if invested, try the Kontoo compound-interest calculator at /compound-interest-calculator. For your exact rate, the official Finnish source is the Tax Administration portal OmaVero at vero.fi.

In depth

How the progressive scale actually works

The valtionvero scale is a set of brackets, each with its own marginal rate. The first slice of taxable income is taxed at the lowest rate (about 12.6% in 2026), the next slice at a higher rate, and so on up to the top bracket (37.5% on income above about €52,100). Tax tables often show a fixed euro amount for the bottom of each bracket plus a percentage on the excess above it — that is just a shortcut for adding up all the lower slices. Because municipal tax sits on top, your combined marginal rate — around 44% at the very top once contributions are counted — is what matters for decisions like overtime or a second job.

Tax cards, OmaVero and the annual return

Finland collects income tax through withholding guided by your tax card (verokortti). The card states a base rate up to your estimated annual income and a higher rate on income beyond it. If your earnings change, you can order a revised card in OmaVero so withholding stays accurate. After year-end you receive a pre-completed tax return summarising your income and deductions; you check it, add anything missing (such as certain deductions), and either receive a refund or pay back any shortfall. Keeping your card current is the simplest way to avoid surprises.

Checklist

Finland’s national tax (valtionvero) is progressive, with marginal rates rising in brackets, while municipal tax (kunnallisvero) is roughly flat.
Your true marginal rate is the state rate plus the municipal rate combined, which can exceed 40% for middle and higher earners.
The basic deduction (perusvähennys, up to about €3,980 in 2026) reduces taxable income most for low earners and phases out as income rises.
You manage your tax card and rate through the OmaVero service at vero.fi, run by the Tax Administration (Vero).

Common myths

Myth: Earning more can push you into a higher bracket and leave you with less money.

Reality: No. Only the income inside each higher bracket is taxed at that bracket’s rate. A raise can raise your average tax rate slightly, but your take-home pay always increases — you never lose net income by crossing a bracket threshold.

Myth: Municipal tax dropped a lot recently, so total taxes fell sharply.

Reality: Not really. Municipal rates were cut from 2023 because health and social services moved to state-funded wellbeing-services counties. The state tax rose to cover the shift, so the reduction in kunnallisvero was largely offset rather than a genuine overall tax cut.

Sources

Frequently asked questions

What is the difference between valtionvero and kunnallisvero?

Valtionvero is the national income tax collected by the state. It is progressive, so the percentage rises through brackets as your income grows. Kunnallisvero is the municipal income tax set by your home municipality; it is essentially a flat percentage of taxable income. In 2026 municipal rates range from about 4.7% to 10.9%, with a national average near 7.5%. Both are calculated on the same earned income and withheld together.

Why did municipal tax rates fall in recent years?

From 2023, responsibility for health and social services moved from municipalities to wellbeing-services counties, funded by the state. To pay for this shift, municipal tax rates were cut sharply and the state tax took on a larger share. That is why municipal rates today (averaging around 7.5%) are much lower than the high-teens or low-twenties percentages seen before the reform, even though your total tax did not drop by the same amount.

How do I find my exact tax rate?

Your personal withholding rate appears on your tax card (verokortti), which the Tax Administration calculates from your expected annual income, home municipality, church membership, and deductions. You can view and adjust it in the OmaVero online service at vero.fi. If your income changes during the year, you can request a revised tax card so too much or too little is not withheld.

Is church tax automatic for everyone?

No. Church tax (kirkollisvero) is only paid by members of the Evangelical Lutheran or Orthodox Church in Finland. Rates vary by parish, typically around 1–2% of taxable income. People who are not members of these churches do not pay it, and it is shown separately on the tax card.

All lessons · Glossary · Editorial · Kontoo does the math and explains – this is general education, not tax, legal or financial advice.

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