Deductions – what kind of tax deductions can I get?
You may be entitled to several different deductions and credits that reduce the total amount of taxes you must pay. Some deductions are given you by the Tax Administration in an automated process. Other deductions are not given you unless you submit a claim. A simple way to claim deductions is enter data concerning your upcoming tax-deductible expenses when you ask for a revised tax card. Alternatively you enter the expenses in a deduction claim when you file your tax return.
Deductible expenses you need to claim on your initiative
You can be entitled to the credit for household expenses if an external service provider performs certain services at your home including cleaning or renovation jobs.
Make a claim for tax deductions if you need to spend more than €900 a year on commuting.
See instructions for identifying the deductible expenses and for claiming the deductions.
Make a claim for tax deductions if you spend more than €750 a year in order to gain or produce income. Expenses you may pay for the production of income include self-financed workspace, home office, tools for which you pay the cost yourself, and purchases of books that you use for work-related purposes.
If a tenant pays you rent, you are entitled to tax deductions. You can claim the direct expenses of renting.
You can claim expenses for the production of income including any costs you have paid related to various investment activities. An example of such costs are the payments of interest on a loan you have taken in order to gain or produce income. The loan’s annual interest is tax-deductible in full.
You can claim a special deduction for a reduced capacity to pay taxes because of an illness, because of unemployment, a child-maintenance obligation, etc. The deduction is always based on a detailed claim submitted by the taxpayer.
You can get a tax credit because of your maintenance obligation if you pay child support. You need to provide the Tax Administration with a photocopy of an agreement concerning your obligation to pay child maintenance confirmed by municipal social authorities or a photocopy of a court ruling.
You can ask for tax treatment based on spreading your income across several tax years if you were paid a lump-sum amount of at least €2,500 during the tax year. The amount must be based on your earnings and it must be connected to at least 2 years during which you have been an income earner.
If you donate money to a university or another institution of higher education, you can be entitled to a tax deduction.
Other deductions based on the taxpayer’s claim
Credits and deductions readily pre-completed on your tax return
This group of deductions is on your tax return when you receive it in spring, pre-filled. The Tax Administration receives the data directly from banks, from trade unions, from pension insurance companies and other sources. Please check the pre-filled amounts carefully. If you detect errors, make corrections as needed.
Automatically granted deductions
Some deductions are included in the Tax Administration’s assessment calculation so you do not have to claim them when you file your tax return. In other words, some deductions are given to taxpayers automatically.
When you are a recipient of wage income you are given this deduction automatically. The standard amount is €750. The amount cannot be higher than the sum of your wage income per year. The deduction affects your wage income in the assessments of both state taxes and municipal taxes.
If you spent more than €750 on the production of income during the year, you need to list the expenses one-by-one when you file your tax return.
Read more about how to deduct expenses for the production of income
You can be given the deduction called ‘earned-income allowance’ if you receive wages, profit-shares of a small business, or other comparable earnings. However, income consisting of a pension or of social benefits does not qualify.
The earned-income allowance concerns both state taxes and municipal taxes.
Amounts of the earned-income allowance in 2024 and 2023:
- The maximum deduction is €3,570.
- The deduction is 51% if the amount of qualifying income is between €2,500 and €7,230.
- For the part that exceeds €7,230, the deduction is 28%.
If your net taxable earned income exceeds €14,000, the deduction is reduced by 4.5% of the exceeding amount. When it is reduced, all your earned income – including pensions, unemployment benefits and sickness allowance – is included as income.
If your net taxable earned income is more than €94,084, you cannot get this deduction at all.
You can be given the tax credit for employment income i.e. work income if you receive wages subject to tax, profit-shares of a small business, or other comparable earnings.
The credit reduces your state income tax directly. If your state income tax is less than the amount of credit, the credit will reduce your municipal tax, church tax and health care contribution on a proportional basis.
Creditable amount in 2024:
- The maximum credit for employment income is €2,140.
- If you are a wage earner or self-employed individual, and you have turned 65 before the beginning of 2024, the maximum credit is €3,340. If you are younger, you are not entitled to any age-based increase that would affect the maximum credit.
- The credit is 12% of qualifying income
- The credit is reduced by 2.03% for the part of net taxable earned income exceeding €23,420, and by 1.21% for any part in excess of €71,900.
Creditable amount in 2023:
- The maximum credit is €2,030
- If you are a wage earner or self-employed individual, and by the beginning of 2023 you had turned
- 60, the maximum credit is €2,230
- 62, the maximum credit is €2,430
- 65, the maximum credit is €2,630
- The credit is 12% of qualifying income
- The credit is reduced by 2.03% for the part of net taxable earned income exceeding €22,000, and by 1.21% for the part in excess of €70,000.
When it is reduced, all your earned income – including pensions, unemployment benefits and sickness allowance – is included as income.
You can be given the basic allowance that reduces your taxable income such as wages and pensions. The allowance concerns both state taxes and municipal taxes. The basic allowance affects your earned income subject to tax.
The size of the allowance in 2024:
- The maximum deduction resulting from the basic allowance is €3,980.
- If your net taxable earned income exceeds €3,980 after all the deductions applied in municipal taxation have been made, the deduction is reduced by 18% of the excess.
- You are not entitled even to a partial deduction if your net taxable earned income after all the above deductions exceeds €26,092.
The size of the allowance in 2023:
- The maximum deduction resulting from the basic allowance is €3,870.
- If your net taxable earned income exceeds €3,870 after all the deductions applied in municipal taxation have been made, the deduction is reduced by 18% of the excess.
- You are not entitled even to a partial deduction if your net taxable earned income after all the above deductions exceeds €25,370.
The amount of the deduction based on pensions depends on the sum total of the your taxable wage income and other earned income. The deduction reduces your net taxable earned income in state taxation and municipal taxation.
Amount in 2024:
- In 2024, you can get the pension income deduction if your net taxable earned income is no more than €55,927.
- The maximum deduction is €10,920.
- If your net taxable earned income is higher than €10,920, the deduction is reduced by 51% of the excess.
- If your net taxable earned income is higher than €22,500, the deduction is reduced by 15% of the excess.
Amount in 2023:
- In 2023, you can get the pension income deduction if your net taxable earned income is no more than €49,880.
- The maximum deduction is €10,320.
- If your net taxable earned income is higher than €10,320, the deduction is reduced by 51% of the excess.
- If your net taxable earned income is higher than €22,500, the deduction is reduced by 15% of the excess.
If your domicile is in the Åland Islands, you may be given the disability credit for residents of Åland.
You are eligible for the credit if your permanent degree of disability due to illness, injury or a comparable reason is 30%–100%. The maximum credit is €440.
As of 31 December 2022, disability credits are no longer available to people living in Finland’s mainland.
You can get this deduction the year when you receive a study grant. Study grant deductions concern both state taxes and municipal taxes.
Deductions for study grants in 2024 and 2023:
- The maximum deduction is €2,600 but the deduction cannot be greater than the amount of your study grant. If you receive wages or other earned income in addition to the study grant, the deduction will be reduced.
- Half (50%) of your earnings in excess of €2,600 will be deducted from the deduction.
- If your net taxable earned income is more than €7,200, no study grant deduction can be given you.
The student loan credit only applies to students who have started their degree program in higher academic education before 1 August 2014 for the first time.
If you have taken out a student loan and completed your degree within the target time, you may be eligible for the credit. The credit is granted for the years when you are repaying the loan.
The credit reduces your state income tax directly. If your state income tax is less than the amount of the credit, the credit will reduce your municipal tax, church tax and health care contribution on a proportional basis.
Kela decides whether you are eligible for the student loan credit and what the maximum amount of credit is. The Tax Administration grants you the credit based on the information received from Kela for every tax year when you are eligible. In other words, you do not need to claim the credit when you file your tax return.
If you began your first course of study in higher education on 1 August 2014 or later, you may be eligible for Kela’s student loan compensation after your graduation. The student loan compensation is tax-exempt income. No pre-filled amount of the compensation is shown on your pre-completed tax return. There is no need to report the amount when you file your tax return for the year. Read more about the student loan compensation on Kela’s website.
You are entitled to this deduction if you receive seafarer's income. The deduction reduces your net taxable earned income in both state and municipal taxation.
Deduction amounts in 2024 and 2023:
- The deduction is 20% of your total amount of seafarer's income. However, the maximum deduction is €7,000.
- Moreover, if you receive more than €50,000 in seafarer's income, the maximum deduction of €7,000 is reduced. First, we calculate 5% of your income which is in excess of €50,000. Then the 5-percent amount is subtracted from €7,000.
- You receive an additional deduction of €170 for each full calendar month when the ship or vessel does not visit Finland (the deduction for cross-trade work).
Do credits and deductions make the tax lower – or make the income lower?
The calculation rules for each credit or deduction determine whether they reduce tax or reduce the taxable income. In general, the word ‘credit’ indicates direct subtraction from tax. Correspondingly, ‘deduction’ indicates subtraction from income. In both cases, the tax will be lower.
- For example, the credit for household expenses reduces the amount of tax due. So do the credit for child maintenance and the tax credit resulting from an income spreading arrangement. The net effect is to reduce the total tax you must pay.
- As for deductions, such as travel, commuting, and expenses for the production of income, the calculation will always reduce the amount of taxable income. In other words, the income subject to taxes is lower and this will indirectly reduce the total tax you must pay, as well.
Because of the different calculation rule, tax credits will often have a greater impact than tax deductions.
What kind of tax deductions can I get? — other pages
Page last updated 6/20/2024
