How is net salary calculated?

Net salary is the amount that ends up in your bank account. It is calculated by subtracting five separate deductions from your gross salary.

  1. 1

    State income tax (Valtionvero) — Progressive income tax. In 2026 the lowest marginal rate is 12.64 % (under €22,000) and the highest is 37.50 % (above €52,100). Tax is paid only on the portion above each bracket threshold, not on the full salary.

  2. 2

    Municipal tax (Kunnallisvero) — A flat-rate tax that depends on your home municipality. In 2026 the cheapest municipality (Kauniainen 4.70 %) leaves considerably more take-home pay than the most expensive (Kökar 19.70 %).

  3. 3

    Pension contribution (TyEL) — Employee pension insurance contribution. In 2026 it is 7.30 % for all employees (the age-bracket differentiation was removed).

  4. 4

    Unemployment insurance (Työttömyysvakuutus) — 0.89 % of gross salary in 2026.

  5. 5

    Health insurance (Sairausvakuutus) — Medical care contribution of 1.10 % on all earned income, plus a daily allowance contribution of 0.88 % on income above €17,255.

The calculator applies all these deductions automatically for your chosen municipality and salary level.

Why does municipality matter so much?

Municipal tax is a flat rate levied on all earned income. In 2026 it ranges from 4.70 % to 19.70 % — a difference of up to 15 percentage points.

On a €4,000 gross salary, the difference in municipal tax between Kauniainen (4.70 %) and Kökar (19.70 %) amounts to around €600/month in take-home pay. Among major cities in 2026, municipal tax ranges from 5.30 % (Helsinki, Espoo) to 10.30 % (Kaskinen, Ylivieska, Pomarkku).

Check your municipality's tax rate in the calculator — simply moving to a different municipality can mean hundreds of euros more per month.

Frequently asked questions

What is the effective tax rate?

The effective tax rate is the total of all taxes and contributions divided by gross salary. It tells you what fraction of your salary you pay in taxes and statutory contributions overall — unlike the marginal rate, which applies only to the last euro earned.

What is the marginal tax rate?

The marginal tax rate is the percentage that goes on the next euro you earn. Because of progressive taxation it is always higher than the effective rate. The salary calculator shows the marginal rate in the raise-impact section.

How does the holiday bonus affect taxation?

The holiday bonus (typically 50 % of one month's salary, paid in June) is treated as earned income. Because it increases annual earnings, it may push you into a higher tax bracket — the calculator accounts for this automatically.

Why should I add a buffer to my tax card?

The tax card withholding rate is based on an estimate of your annual income. If you earn more than expected (e.g. holiday bonus, side income, pay rise), you will owe residual tax at year-end. A +2 percentage-point buffer reduces that risk — the calculator's tax-card suggestion adds it automatically.

How is side income taxed?

Side income is taxed on top of your main employment income, meaning it is taxed at your highest marginal rate. For example, if your main job income is €30,000/year, the marginal rate on side income is 30.25 %. You can enter side income in the "Advanced options" section of the calculator.

Single-parent tax benefit — how much is it?

Single parents receive an enhanced basic deduction: a supplement of €1,880 per year. This reduces taxable income and typically increases net pay by €200–400/year depending on income level and municipality. Select "Single parent" in the calculator to see the exact effect.