How much is your take-home pay – really? Taxation reduces income inequality in terms of the income you actually take home. Indeed, the net pay you take home can be very different from the amount indicated in your employment contract.

First, the sum determined by your personal tax rate is deducted from your pay, but that is not the whole truth. In addition to taxes, an age-dependent pension insurance contribution of 7.15 or 8.65 per cent and an unemployment insurance premium of 0.79 per cent are deducted from your pay. 

Check the following table to see an example of net pay for different monthly incomes. 

PayTax, %Tax, €Autom. paymentsNet pay
20009180158,81,661.20
250013,5337,5198,51,964.00
300016,5495238,202,266.80
350020700277,902,522.10
400023920317,62,762.40
4500251125357,33,017.70
500026,513253973,278.00
550028,51567,5436,73,495.80
600029,51770476,43,753.60
6500312015516,13,968.90
700031,52205555,84,239.20
750032,52437,5595,54,467.00
800033,52680635,24,684.80

The example person in this calculation: lives in Tampere; lives alone; is a member of the Evangelical Lutheran Church; was born in 1994; in addition to monthly pay, receives a holiday bonus equal to half a month's pay.

In this example case, the automatically withheld payments comprise 7.94 per cent of pay plus the pension insurance contribution and unemployment insurance premium.

Any deductions made in taxation, such as membership fees of labour market organisations and unemployment fund payments, as well as travel expenses between the home and workplace, are not accounted for in the calculation. Deductions reduce the amount of tax and thus increase the take-home pay.

Contributions and progressive taxation affect net pay

The employee's pension contribution, which is automatically withheld from the pay, is used for funding pensions – in time, including your own. In 2024, the employee's pension contribution is 7.15 per cent of pay for employees under the age of 53 and over the age of 63. For 53–62-year-olds, it is 8.65 per cent of pay. 

Unemployment insurance premiums are used to fund unemployment benefits, adult education allowance, pension benefits and Kela allowance, for example. In 2024, the unemployment insurance premium equals 0.79 per cent of pay for all employees.

The pay table also makes clear the impact of progressive taxation – what it means that the tax rate increases as income increases.

With gross pay of 2,000 euros, your take-home pay is 1,661 euros, or 83 per cent of your gross pay; for gross pay of 4,000 euros, you take home 2,762 euros, or 69 per cent; and for a generous gross pay of 8,000 euros, you take home only 58 per cent, or 4,684 euros.

Sources: vero.fi, keva.fi, tyollisyysrahasto.fi