Tax cards in Finland

Wage income

Wages refer to compensation paid for work carried out in an employer-employee relationship. In these cases, the employee has signed an employment contract with Aalto. In addition, some fees are considered wages even if no employment contract was made. Some characteristics of an employer-employee relationship are: Aalto has right to supervise the work, the work is done according to Aalto’s instructions, and the workspace and tools are provided by Aalto. Both tax and social insurance contributions are deducted from wage income.

For wage income a tax card for wage income is needed. The tax card for wage income is the most common tax card. The Tax Administration calculates it automatically for those, who earned wage income in the previous year. The tax card provided by the Tax Administration is always an estimation. If there are any changes to your income during the tax year (January – December), it is your responsibility to make a revised tax card with an updated estimation of your income amount.

You can request a revised tax card in the MyTax-service. Please see further instructions provided by the Tax Administration here.

If your income limit on your tax card for wage income is reached and you have not changed the information in MyTax to a higher income limit, tax will be withheld according to the higher additional percentage. Aalto's payroll team does not correct withholding taxes after they have been collected from wages. The tax authority makes all corrections to taxation after withholding tax.

Trade income

Trade income is compensation paid for work or service that is not considered wages. Trade income are payments made in compensation for carrying out tasks or for performing occasional work assignments, when there is no employer-employee relationship between the payer and the recipient. (If there is an employment relationship, the payment is considered wage income.) In case of trade income Aalto has no right to supervise the work and the individual decides how, when and where the work is done. Tax and some of the social insurance contributions are deducted from trade income.

For trade income a tax card for trade income is needed. The tax card for trade income isn’t calculated automatically. You can request a tax card for trade income the same way you request one for wages: by giving an estimation of the amount that will be paid to you as trade income during the tax year (January – December). When the tax card (PDF document) is ready, you can see this text in Finnish: “Verokortti koskee työkorvausta” (= tax card concerning trade income).

You can request a tax card for trade income in the MyTax-service. Please see further instructions provided by the Tax Administration here.

Please note that the tax card for wage income cannot be used to tax trade income payments. If you have not applied for your own tax card for tax trade income payments, 60% tax will be withheld from the compensation (35% for non-resident taxpayers). 

If you reach the income limit on your tax trade income payments tax card and you have not applied for a revised tax card for a higher income limit, tax will be withheld according to the higher additional percentage. Aalto's payroll team does not correct withholding taxes after they have been collected. The tax authority makes all corrections to taxation after withholding tax.

Compensation for use

Compensation of use refers to compensation paid for the use/ the right of use of a copyright or industrial property right. Compensation for use paid in Aalto are taxable earned income. Only tax is deducted from compensation for use.

For compensation for use a tax card for compensation for use is needed. The tax card for compensation for useisn’t calculated automatically. You can request a tax card for compensation for use the same way you request one for wages: by giving an estimation of the amount that will be paid to you as compensation for use during the tax year (January – December). When the tax card (PDF document) is ready, you can see this text in Finnish: “Verokortti koskee käyttökorvausta” (= tax card concerning compensation for use).

You can request a tax card for compensation for use in the MyTax-service. Please see further instructions provided by the Tax Administration here.

Please note that the tax card for wage income cannot be used to tax compensation for use. If you have not applied for a tax card for compensation for use, tax will be withheld from the compensation at a rate of 60% (35% for non-resident taxpayers).

If your income limit on the tax card for compensation for use is reached and you have not applied for a revised tax card for a higher income limit, tax will be withheld according to the higher additional percentage. Aalto's payroll team does not correct withholding taxes after they have been collected. The Tax Administration makes all corrections to taxation after withholding tax has been collected.

Non-resident taxpayers in Finland

If you live in a foreign country and you arrive in Finland for a period that is no longer than 6 months, you are a non-resident taxpayer in Finland. If your stay in Finland is longer than 6 months, the Finnish Tax Administration considers you a resident taxpayer.

For non-resident taxpayers the withholding is 35 % tax at source. You can also request a tax card for a non-resident taxpayer from the Tax Administration. In this case you should also take into consideration what type of income you’re paid and request the specific tax card for it. If the work was done abroad, no taxes or social insurance contributions are paid in Finland.

Please see further instructions regarding non-resident taxpayers provided by the Tax Administration.

Contact information

If you need assistance concerning your taxes, please contact the Finnish Tax Administration.

Aalto payroll team ([email protected]) helps you, if you have questions concerning your payments or the deducted withholdings.