Formulas and Sources 2026: How Net Pay and Pensions Work

Every legal value on this site sits in a single parameter file, last checked on 5 October 2026 against official sources: decisions of Vero (the Finnish Tax Administration), acts on Finlex, the Finnish Centre for Pensions (ETK), Kela and the calculation guide of TYJ, the umbrella body of Finnish unemployment funds. Calculators and texts read figures from that file only, so a corrected value changes everywhere at once. Municipal tax rates live in a separate table generated directly from Vero’s decision of 18 November 2025 (VH/6585/00.01.00/2025), covering all 308 municipalities.

Tax on wages and net pay

Net earned income = gross pay − the automatic €750 income-production deduction − commuting costs above €900 (at most €7,000) − union and unemployment fund fees. From that we deduct the employee pension contribution (7.30%), unemployment insurance (0.89%) and the daily allowance contribution (0.88% once annual earnings reach €17,255), and last the basic deduction of €4,265, which shrinks by 18.00% of income above it. The same taxable income feeds both state and municipal tax.

State income tax follows the scale €0–€22,000: 12.64 % · €22,000–€32,600: 19.00 % · €32,600–€40,100: 30.25 % · €40,100–€52,100: 33.25 % · €52,100+: 37.50 %. Municipal tax, church tax and the 1.10% health care contribution use your municipality’s and parish’s rates on taxable income. The earned income tax credit (18.00% of pay, at most €3,430 plus €105 per child under 18, shrinking by 2.00% of net income between €35,000 and €50,550) comes off state tax first, any remainder off the other taxes in proportion. The Yle tax is 2.50% of income above €15,150, capped at €160. Each tax is rounded to the cent before adding up, as Vero does.

The tax card withholding rate is total tax divided by annual income, rounded up to the next half point. The additional rate comes from Vero’s additional-rate scale plus municipal and parish rates and the health insurance contributions. Monthly net pay is salary minus withholding minus employee contributions; the true annual net and the expected refund are shown separately.

Åland

In the 16 Åland municipalities the state scale percentages are cut by 12.64 points, the municipal basic deduction is €3,925 (shrinking by 8.40%), and a €128 media fee replaces the Yle tax above €14,000. Åland’s own commuting rules in municipal tax are not modelled.

Pension

Earnings-related pension accrues at 1.50% of annual earnings from age 17 to 69. The estimate is in today’s money and assumes the same salary until retirement unless you enter the accrual shown on your pension record. It is reduced by the life expectancy coefficient: a confirmed value exists up to the 1964 cohort (0.94643), and we use it as an estimate for later cohorts. Retirement ages for 1956 to 1964 are confirmed; later ones are the forecasts of the official tyoelake.fi calculator. Deferral adds 0.40% a month.

National pension: €787.07 a month in full if living alone, €702.69 in a couple, minus half of other pensions above €798 a year. The guarantee pension tops all pensions up to €990.90. Pension tax applies the pension income deduction (€11,080, shrinking by 51.00% and above €22,500 by 19.60%) and a 1.49% health care contribution.

Kela benefits and unemployment

General housing allowance: 70% × (accepted housing costs − basic deductible); deductible = 0.5 × [income − (667 + 94 × adults + 296 × children)]; maximum costs by municipality group and household size; water €20 per person; nothing paid under €15.
Earnings-related unemployment allowance: basic part €37.21 + 45% of the gap between daily wage and basic part, 20% above the break point (95 × basic part per month); daily wage = monthly pay × (1 − 3.83%) ÷ 21.5; at most 90% of the daily wage; step-downs to 80% and 75%.
Parental allowance: annual income − 9.07%, then 70% / 40% / 25% in bands split at €45,744 and €70,379, divided by 300; at least €31.99 per working day.
Household tax credit: 35% of the labour cost (13% of wages you pay), €150 deductible, at most €1,600 per person; the government proposal (40%, €2,100) is shown separately because it is not law yet.

Checks that block every release

24 official 2026 examples from Vero (wages, benefits and pensions from €10,000 to €70,000, Helsinki, church member): taxes match within 2 cents, wage withholding rates exactly.
14 Kela examples of national and guarantee pensions (single and couple), to the cent.
10 rows of TYJ’s 2026 allowance table, full and stepped-down, within one euro.
Kela’s housing allowance examples (€299.25 and €125.65) and income limits; Vero’s household credit examples; ETK’s life expectancy and partial early pension examples.
Edge cases one by one: zero income, the daily allowance contribution threshold, age limits, Åland, the asset limit, the 90% cap.

What the calculators do not do

Capital income, deficit credit, maintenance deduction, seafarer’s income and self-employed YEL income are not modelled.
Apart from the household credit, deductions you claim in your tax return (home office, work expenses) are not included.
Tax at source for non-residents is not computed; the average municipal rate of 7.60% is quoted for reference.
The pension estimate leaves out future index rises and foreign pensions; your pension record shows the exact accrual.
The housing calculator covers the general housing allowance, not the pensioners’ allowance or the student housing supplement.

Updates

All values are reviewed at least every 12 months and whenever Vero, Kela or the Ministry of Social Affairs and Health confirms new figures: municipal rates in November, withholding rules in November and December, the national pension index and life expectancy coefficient in the autumn. Report an error to contact@nettopalkka.fi; we check it against the source, fix it and add it to the tests. See also the editorial policy.

Sources

Updated 5 October 2026.