The Finnish tax system – a hero in disguise

At first glance, the Finnish tax system might seem like a daunting labyrinth of numbers and rules, but don’t let the initial complexity fool you. This system is actually ensuring everything runs smoothly in our society. Once you get the hang of it, you’ll see how it supports public services and maintains the country as the happiest in the world. 

One of the first things to know is that the tax system is progressive: the more you earn, the higher the percentage of tax you pay. This is how it simplifies into your daily life. 

Income tax

If you’re earning a paycheck in Finland you’ll need a tax card. It’s like your personal tax ID, showing how much you pay based on what you earn. This digital card factors in everything from your national and municipal taxes to church taxes (if you choose to pay them), plus your contributions to social security.

Getting a tax card

Ready to get this tax party started? Head over to the Finnish Tax Administration’s website (Vero.fi) and dive into the simple process of applying for your tax card online. All you need is your Finnish personal identity code, and you’re all set to ensure your employer deducts the right amount of tax. If you’re a true hustler, remember to add all sources of your income. 

Beyond income tax

Income tax takes the spotlight, but there’s also VAT on your shopping hauls or that dinner downtown. But here’s the good news: it’s all included in the price tag, so no surprises ahead.

Remember to stay sharp 

Staying on top of tax rates and pension policies is like keeping up with the latest trends—vital and always evolving. Make a habit of checking the Finnish Tax Administration’s website or keeping an ear tuned to the local news. It’s the best way to ensure no financial trend slips by you.

Every spring you’ll receive a tax return form pre-filled with your details. Instead of filing it away,  scrutinise it for accuracy, add any forgotten bits of income or deductions, and ensure everything’s just right. If you’re lucky and have over paid your taxes compared to your income, you’re in for a bonus later on. 

Tweak as you go

Got a raise? Maybe the side hustle hustled a bit more than expected? Reflect these changes in your tax card by updating it online via OmaVero to keep tax payments on point to avoid paying it back. 

With these tips, navigating taxes and pensions becomes a part of your city-smart routine. Stay informed, stay prepared, and keep those finances in order. 

Securing your golden years

The Finnish pension system is meticulously designed to ensure you enjoy your golden years with financial peace of mind. Whether you’re planning to spend your retirement enjoying Helsinki’s vibrant culture or relaxing in the tranquility of the countryside, understanding this system is key.

The Finnish pension includes two main types:

First, the national pension, a cushion ensuring that every resident receives basic financial security in retirement, regardless of their earnings history.
Then, there’s the earnings-related pension, which is your financial reward for all those years of hard work – it’s based on your earnings throughout your career.

Securing a comfy retirement in Finland is a team effort. Pension contributions are deducted from your salary, with both you and your employer topping up your future fund. These contributions are your ticket to accumulating sufficient pension rights over your career, ensuring you can kick back when it’s time to retire.

But when can you start enjoying the fruits of your labor? The retirement age floats between 63 and 68 depending on your birth year. Once you hit your designated retirement age, you can start drawing on your earnings-related pension.

The Finnish way of retiring is all about making sure your later years are as enjoyable and worry-free as possible. So, just keep on working and start dreaming about those leisurely days ahead.

Relax, it’s easier than you think

While taxes and pensions might seem daunting at first, Finland’s tax and pension systems are  designed to be transparent and supportive, ensuring that everyone both contributes to and benefits from the society. By understanding these systems, you can ensure your time here lays down a secure foundation for yours and your neighbours future – and vice versa.