Income taxation difference between Norway and Finland
In the early '00s in Finland, it was common to joke that Norway was so expensive you would need to sell a kidney just to afford a weekend trip to the land of the thousand fjords. Reliable sources at the local Esso bar would assure you that while salaries in Norway were at least 2-3× higher than in Finland, the taxes were even steeper. Fast forward two decades, and thanks to my obsessive-compulsive taxation disorder, I finally have an answer to the question of income taxation differences between Norway and Finland.
I have set out to make as fair a comparison as possible across different personas: the average salary earner, student, nurse, developer, doctor, and the director of the local public broadcasting company. Without further ado, here are the results.
| Student | Nurse | Average | Developer | Doctor | 2× average | Director | |
|---|---|---|---|---|---|---|---|
| Norway Income tax percentage |
11.73 % | 25.47 % | 26.74 % | 29.99 % | 32.71 % | 35.99 % | 43.59 % |
| Gross income (annual), NOK | 214 213 | 596 760 | 668 400 | 830 520 | 1 016 280 | 1 336 800 | 4 046 000 |
| Net income (annual) | 189 084 | 444 742 | 489 678 | 581 438 | 683 893 | 855 693 | 2 282 364 |
| Finland (Helsinki) Income tax percentage |
9.83 % | 23.28 % | 27.42 % | 32.77 % | 35.76 % | 37.69 % | 49.79 % |
| Gross income (annual), EUR | 18 720 | 39 264 | 48 216 | 65 976 | 81 420 | 96 432 | 340 974 |
| Net income (annual) | 16 880 | 30 122 | 34 996 | 44 354 | 52 305 | 60 090 | 171 201 |
| Finland (Tampere) Income tax percentage |
10.60 % | 24.09 % | 29.31 % | 34.73 % | 37.75 % | 39.69 % | 51.81 % |
| Gross income (annual), EUR | 18 720 | 39 264 | 48 216 | 65 976 | 81 420 | 96 432 | 340 974 |
| Net income (annual) | 16 736 | 28 501 | 34 083 | 43 064 | 50 686 | 58 154 | 164 314 |
Where does the salary information originate from?
- Student
- The maximum amount a full-time student can earn while still receiving the maximum amount of financial aid from the state. In Norway, the income limit is reached after 7 months of support. In Finland, the income limit extends to 12 months, but students typically receive 9 months of support annually.
- Nurse
- The salary listed is an average for an experienced nurse in 2022. In Norway, the average is calculated across all sectors (private, public, municipal, and state). For Finland, the figure represents the average salary for nurses in the municipal sector, which is by far the largest employer.
- Average
- The average salary for 2023, as reported by Statistics Norway and Statistics Finland.
- Developer
- An estimated salary for an experienced developer in Norway (2023) and Finland (2024).
- Doctor
- The average salary for an experienced General Practitioner. For Norway, this is the average for an allmennpraktiserende lege in 2024. For Finland, the average is for a terveyskeskuslääkäri in 2021 (?) working in the public sector.
- Doctor salaries are substantially higher for fastleges in Norway and for doctors working in the private sector in Finland. However, it was challenging to find comparable numbers.
- Director
- The total salary of the director of the local public broadcasting company (NRK or YLE) in 2023.
How were the calculations done?
The taxes were calculated for the year 2023, using the example of an unmarried, childless, 40-year-old person (which sounds a bit sad). No capital income, deposits, or debts were reported, and no deductions were applied.
For Finland, there are two other notable factors that influence the overall tax percentage: municipality and parish. Different municipalities have different tax rates that effect total taxation. Helsinki dwellers enjoy a relatively low communal tax whereas citizens of Tampere have closer to an average tax rate. The Civil Register was chosen as the parish (results in lower taxes). People belonging to church (e.g. Evangelical Lutheran Church) must pay an additional 1-1.25 % tax.
Norway
In Norway, calculating the income tax percentage is straight-forward
total taxes / total income = tax rate
178722 NOK / 668400 NOK = 0.2674
Finland
In Finland, in addition to taxes, a pension insurance contribution of 7.15 % and an unemployment insurance contribution of 0.79 % are deducted from the pay (both mandatory).
Formula for calculating the tax percentage
(total taxes + pension insurance contribution + unemployment insurance contribution) / total income = tax rate
(9391 € + 0.0715×48216 € + 0.0079×48216 €) / 48216 € = 0.2741
Other notable tax rates
| Norway | Finland | |
|---|---|---|
| Capital gains tax | 22 % gevinstskatt |
30-34 % pääomavero |
| Transfer tax apartments |
0 % dokumentavgift |
1.5 % varainsiirtovero |
| Transfer tax real estate, buildings |
2.5 % dokumentavgift |
3 % varainsiirtovero, kiinteistövero |
| VAT | 25 % merverdiavgift |
25.5 % arvonlisävero |