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Things to consider regarding taxation of earnings-related allowance



It may come as a surprise to many recipients of earnings-related allowance that it might be taxed at a higher rate than regular salary. It should be noted that the tax withholding rate for earnings-related allowance and other unemployment fund benefits is set at the minimum of 25% unless a separate tax card is provided for the benefit.


A revised tax card can be requested directly from the Finnish Tax Administration’s MyTax service for benefit payment purposes. The tax card can be delivered electronically to the fund. This helps ensure that the tax rate is current and up to date with the person’s current tax status.


Starting in 2025, tax cards are valid from January

In the past, tax cards became valid in February. January taxes were withheld using the tax rate stated in the previous year’s tax card. However, this is about to change. Starting in 2025, tax cards are valid from the beginning of January and the income ceiling stated in the tax card is calculated for the full year.