The taxation of many employees will be reduced next year, when the government’s several changes affecting taxation come into force.
There will be a slight reduction in the taxation of employees next year, when all the government’s tax changes concerning earned income are added together.
For example, a person earning 40,000 euros a year, which is close to the average annual income of Finns, would have their taxes reduced by 204 euros.
In the table below, you can see how the changes made in the tax bases affect the average at different income levels. Average municipal and church tax percentages and 2024 wage earner payments have been used in the calculation.
The calculation does not include the change in earnings.
The Ministry of Finance has predicted a 3.4 percent increase in earned income for next year. When this is taken into account, taxation is reduced mainly for low-income earners.
Several changes to taxation
On Monday, the Ministry of Finance’s Economic Review, which includes a forecast of Finland’s economic prospects, and next year’s budget presentation became public. Orpo’s (kok) board decided on next year’s budget at the beginning of September in a budget frenzy. Now the budget as a whole is public.
The state budget proposal contains several changes that affect the taxation of employees. First of all, in next year’s budget, an index revision will be made to the basis of earned income tax for all other income categories except the top two. Thus, the taxation of the highest income categories will be slightly tightened.
The government will lighten the taxation of work, emphasizing the lightening on low and medium incomes. In addition, the earned income deduction is replaced by a work income deduction. As a result, the effect of the municipal tax rate on taxation is reduced.
In those municipalities where the municipal tax rate is higher than average, taxation may become a little tighter. In those municipalities where the tax bracket is lower, the change may lighten taxation. It is estimated that taxation will be tightened for 1.2 million taxpayers and reduced for approximately 1.5 million taxpayers.
Addition 23 September 2024 at 15:17: Added information that the calculation does not take into account the increase in the earnings level.
A large part of Finnish wage earners will have a little more left over from their salary next year. Elle Laitila
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