Työtulovähennys

Työtulovähennys is a Finnish tax deduction that reduces an individual's income tax liability based on their earned income. It is designed to encourage employment by making work more financially rewarding. The deduction is calculated as a percentage of earned income, up to a certain maximum amount. Both employed and self-employed individuals can be eligible for työtulovähennys, provided they meet specific income requirements.

The amount of työtulovähennys is progressive, meaning it increases with earned income up to a certain point, and then it typically levels off or begins to decrease gradually as income continues to rise beyond a certain threshold. This structure ensures that the benefit is most significant for low to middle-income earners. The exact percentages and maximum amounts are subject to change annually based on government budget decisions.

To receive the työtulovähennys, individuals generally do not need to take any special action, as it is usually applied automatically by the Finnish Tax Administration (Verohallinto) based on the income reported in the tax return. However, it is always advisable for taxpayers to review their tax assessment to ensure the deduction has been applied correctly. The purpose of työtulovähennys is to contribute to a fairer distribution of tax burdens and to support the financial well-being of working individuals and families.