työtulovähennyksellä

Työtulovähennys is a tax deduction in Finland that reduces the amount of income tax paid by individuals who earn income from work. It is designed to encourage employment and make working more financially rewarding. The deduction is applied to earned income, meaning income from employment or self-employment. It is not applied to capital income or other forms of income.

The amount of työtulovähennys depends on the level of earned income. There is a maximum amount that can be deducted, and this maximum is reached when income reaches a certain threshold. For income below this threshold, the deduction increases proportionally with income. If income exceeds the threshold, the deduction remains at its maximum amount. The specific amounts and thresholds are adjusted annually by the Finnish government.

To receive the työtulovähennys, individuals do not typically need to take any specific action. It is usually calculated automatically by the Finnish Tax Administration (Verohallinto) based on the income information reported by employers and self-employed individuals. The deduction reduces the taxable income, thereby lowering the final income tax liability. This makes working more attractive by increasing net income, especially for lower and middle-income earners. The purpose is to ensure that a larger portion of earned income remains in the hands of the individual.