Individual Income Tax Calculation

EY
Ernst & Young
Contributor
Ernst & Young
Finland Finance and Banking
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The following illustrates the income tax calculation for a married individual with one 4-year-old child.

                                             National       Municipal
                                             Taxation       Taxation

                                                FIM            FIM

CALCULATION OF TAXABLE EARNED INCOME

Salary                                        220,000       220,000

Deductions

 Trade union membership fee                  (  2,000)     (  2,000)
 Travel expenses exceeding FIM 2,000         (  1,000)     (  1,000)
 Standard deduction                          (  2,100)     (  2,100)
 Child care deductions                       (  8,400)     ( 10,500)
 Employment pension premium and 
 unemployment pension premium*               (  7,040)     (  7,040)
                                             ( 20,540)     ( 22,640)
                                               199,460      197,360

CALCULATION OF TAX ON EARNED INCOME

National income tax on FIM 154,000        24,550
FIM 45,460 at 33%                         15,001
FIM 199,460                               39,551
Municipal tax on FIM 197,360 at 16%       31,577
Church tax on FIM 197,360 at 1%            1,973              39,551
                                          33,550

*   FIM 220,000 (0.03 + 0.002) = FIM 7,040

CALCULATION OF TAXABLE INVESTMENT INCOME

Capital gain                                                  30,000
Rental income                             28,000              58,000

Deductions

Expenses on rental property                                ( 14,000)

Interest expense

Rental property                                            ( 14,000)
Housing interest                           ( 40,000)       ( 68,000)

Loss                                                       ( 10,000)

Tax credit for excess interest expense

FIM 10,000 x 0.25                                             2,500
National income tax                                          39,551
Tax credit                                                  ( 2,500)
National income tax payable                                  37,051

The content of this article is intended to provide a general information on the subject matter. It is therefore not a substitute for specialist advice.

Individual Income Tax Calculation

Finland Finance and Banking
Contributor
Ernst & Young
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