Tax for newcomers in Finland: the 25 % key employee regime, and when the ordinary rate is better

Yes, Finland has a special tax regime for people who come here to work, and since 2026 it has become more favourable. A key employee (avainhenkilö) with a gross salary of at least € 5,800 a month does not pay progressive Finnish income tax, but a fixed tax at source of 25 percent. Until the end of 2025 it was 32 percent. The finding at the Finnish Tax Administration Vero: the application must be in within 90 days of your first working day. The pitfall is the flip side of a fixed rate: the costs you incur for that income can no longer be deducted anywhere, not even from other income.

Who counts as a key employee?

Vero names five conditions, and all of them must be met:

• you become a Finnish tax resident as soon as you start working here;
• you earn at least € 5,800 a month for your key position, in cash: a company car or another benefit in kind does not count towards the threshold;
• your work requires special expertise;
• you were not a Finnish tax resident in the five calendar years before you start;
• your pay is sourced to Finland: you work most of the year here, for a Finnish employer.

For teachers and researchers at a Finnish institution of higher education the special expertise requirement does not apply, and neither does a salary threshold. The regime also applies if your employer is foreign but a Finnish party, such as an accounting agency, pays the salary.

How long, and what do I have to do?

Item	Rule
Rate since 1 January 2026	25 % tax at source, final
Rate until the end of 2025	32 %
Salary requirement	at least € 5,800 gross a month in cash
Applying	within 90 days of the first working day
Maximum duration	the first 84 months of work
Extending the card	within 30 days of the expiry date

You apply for the regime with the paper form 5042e, on which you tick the box for a key person tax card. Attach a copy of your employment contract, or a statement from your employer about salary and duties. You then get a tax card marked as meant for key employee income. If you do not yet have a Finnish personal identity code, arrange that first; how is explained in henkilötunnus and kotikunta.

Whoever changes jobs requests a new card. If you still meet the conditions, you get it again, but the regime only applies to your first 84 months of work.

The 90 days are not a guideline. Vero writes that you must apply for the card within 90 days of starting work. Vero names no exception for late applications. So put the application on the list for your first working week.

What does 'final' mean in practice?

That the 25 percent is your tax. You do not have to include the income in a tax return, and there are no deductions: the costs of earning the income are not deductible, not even from other income. If you also have other Finnish income, it gets more complicated: Vero then uses the key employee salary to set the rate on that other income, and you do have to declare it.

Something also drops away that an ordinary Finnish employee does pay. Vero does not collect Finnish health insurance contributions from a key employee. The employer does withhold your share of the pension and unemployment insurance contributions, unless you show with an A1 certificate or similar that you remain insured in your home country.

How does that compare with the ordinary Finnish rate?

Whoever does not fall under the regime pays the ordinary Finnish tax on earned income, and it is layered. First the progressive state schedule:

Taxable income per year	Rate on the part above
up to € 22,000	12.64 %
€ 22,000 to € 32,600	19.00 %
€ 32,600 to € 40,100	30.25 %
€ 40,100 to € 52,100	33.25 %
from € 52,100	37.50 %

On top comes the flat municipal tax, which differs per municipality; the average Vero uses for 2026 is 7.60 percent. Church members pay church tax. And then there are the contributions, such as the daily allowance contribution of 0.88 percent for employees aged 16 to 67 with an annual income of € 17,255 or more.

Whoever earns € 5,800 a month makes almost € 70,000 a year and is therefore in the top bracket of the state schedule. For those incomes a flat 25 percent without deductions is usually favourable. But whoever has large deductible items, or other Finnish income alongside this salary, is better off calculating it before the 90 days are up. That is a conversation with a tax adviser, preferably one who also looks at the Dutch side: the treaty with Finland still applies to your Dutch income.

What the regime does not touch: your AOW and your Dutch pension. They follow the treaty, not the Finnish tax at source.

In Vertrekklaar this is phase 5 of 5 of the journey, step 5.5: the same steps, but for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to Finland or go straight to step 5.5 in the open plan.