Työtulovehennys

Työtulovähennys is a tax deduction in Finland that reduces an individual's income tax liability based on earned income from work. It is designed to encourage employment and make working more financially attractive. The deduction is calculated based on the amount of earned income and the taxpayer's overall income.

The purpose of työtulovähennys is to lower the effective tax rate on wages and salaries, particularly for lower and middle-income earners. This can result in a higher net income for individuals who are employed. The deduction is automatically applied by the Finnish Tax Administration (Verohallinto) when assessing income taxes, meaning individuals do not typically need to apply for it separately.

The specific amount of the työtulovähennys depends on several factors, including the total amount of earned income, other income sources, and family circumstances. There are thresholds and maximum limits that apply to the deduction. It is a progressive deduction, meaning that as earned income increases, the deduction itself also increases up to a certain point, and then it may level off or decrease.

This tax relief is a component of Finland's social and economic policy, aiming to support the labor market and ensure that work always pays. It is reviewed and adjusted periodically as part of the government's budget and tax legislation.