Finland: 2011 Social Security, Personal Income Tax Rates
Finland’s has made changes to it’s compulsory social security rates and individual income and other tax rates for 2011.
Tax Rates/Brackets
The 2011 income tax rates and brackets have been accepted by the Parliament. The 2011 tax scale is below.
The 2011 municipal and church tax rates have also been published. The municipal rate varies depending on municipality. The highest rate in 2011 is 21.5 percent and the lowest is 16.25 percent. The church tax varies between 1 percent and 2 percent. Helsinki’s rates are as follows:
• the municipal income tax rate is 18.5 percent;
• the Evangelical Lutheran Church income tax rate is 1 percent; and
• the Orthodox Church income tax rate is 1.6 percent.
Amount of Work Income Deduction
The amount of the earned income deduction is 5.9 percent calculated on annual income exceeding €2,500. The maximum amount of the earned income deduction is €740 annually. The amount of the earned income deduction decreases to 4.7 percent on the amount of income exceeding €33,000. However, any earned income deduction is not granted on annual income levels of €95,300 or more.
Amount of Basic Allowance in Municipal Taxation
The amount of the basic allowance in municipal taxation is €2,250. In case the amount of income does not exceed €2,250, the amount of €2,250 is deducted from the income as a basic allowance. In case the amount of income exceeds €2,250, the amount of the basic allowance is decreased by 20 percent of the income that exceeds €2,250. The basic allowance has effect until an approximate salary level of €18,600.
Social Security Rates for 2011
There have been minor changes to the compulsory social security rates. The confirmed rates are as follows:
Employer Contributions
• Employer’s social security contribution: 2.12 percent.
• Employer’s pension insurance contribution: 17.1 percent on average.
Employer’s Unemployment Insurance Contributions:
• 0.80 percent if total salaries are at a maximum €1,879 500;
• 3.20 percent on salaries exceeding €1,879 500.
Accident Insurance and Group Life Insurance Contributions:
• Accident insurance: 1 percent on average;
• Group life insurance: 0.07 percent on average.
Employee Contributions
• Employee’s sickness insurance contributions* (divided into two different contributions, and contributions are payable in connection with tax payments):
Medical treatment contribution: 1.19 %
Daily allowance contribution: 0.82 %
Total 2.01 %
* Payable in connection with tax payments
Amount of Work Income Deduction
The amount of the earned income deduction is 5.9 percent calculated on annual income exceeding €2,500. The maximum amount of the earned income deduction is €740 annually. The amount of the earned income deduction decreases to 4.7 percent on the amount of income exceeding €33,000. However, any earned income deduction is not granted on annual income levels of €95,300 or more.
Amount of Basic Allowance in Municipal Taxation
The amount of the basic allowance in municipal taxation is €2,250. In case the amount of income does not exceed €2,250, the amount of €2,250 is deducted from the income as a basic allowance. In case the amount of income exceeds €2,250, the amount of the basic allowance is decreased by 20 percent of the income that exceeds €2,250. The basic allowance has effect until an approximate salary level of €18,600.
Social Security Rates for 2011
There have been minor changes to the compulsory social security rates. The confirmed rates are as follows:
Employer Contributions
• Employer’s social security contribution: 2.12 percent.
• Employer’s pension insurance contribution: 17.1 percent on average.
Employer’s Unemployment Insurance Contributions:
• 0.80 percent if total salaries are at a maximum €1,879 500;
• 3.20 percent on salaries exceeding €1,879 500.
Accident Insurance and Group Life Insurance Contributions:
• Accident insurance: 1 percent on average;
• Group life insurance: 0.07 percent on average.
Employee Contributions
• Employee’s sickness insurance contributions* (divided into two different contributions, and contributions are payable in connection with tax payments)7:
Medical treatment contribution: 1.19 %
Daily allowance contribution: 0.82 %
Total 2.01 %
* Payable in connection with tax payments
Source: KPMG