In Finland, you will pay tax on your wages. You will also pay tax on any other income you may receive, for example unemployment allowance and pension. With tax money, the state and municipalities pay for health care, education and other services.
Finland has progressive, or graduated, taxation. This means that more taxes are paid on higher wages than on lower wages. You can estimate your own tax rate using the Tax Administration’s calculator.
Your employer will pay your tax directly out of your wages. The tax taken directly out of your wages is called the withholding tax. After each year, the Tax Administration will calculate whether you have paid enough tax on your income. If you have paid too much, you will receive a tax refund. If you have paid too little, you will have to pay more. This is called back taxes.
In addition to taxes, the employer takes insurance contributions out of your wages, for example to cover for unemployment and illness.