Managing Finances and Payments while Working in Finland

Finland is known for its high standard of living and efficient financial systems. If you are planning to work in Finland, it is essential to understand how to manage your finances and payments effectively. This article will provide you with valuable information on various aspects of managing finances in Finland, including banking services, taxes, social security contributions, and payment methods.

Banking Services

• Choosing a Bank: When you start working in Finland, it is advisable to open a bank account with a local bank. Some popular banks in Finland include Nordea, OP Group, and Danske Bank. Research different banks and compare their services and fees to find the one that suits your needs.

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• Bank Account Types: Finnish banks offer various types of bank accounts, including current accounts, savings accounts, and investment accounts. Choose the account type that aligns with your financial goals and requirements.
• Online Banking: Most Finnish banks provide online banking services, allowing you to manage your finances conveniently. With online banking, you can check your account balance, make payments, and transfer funds from anywhere at any time.
• ATMs: Finland has an extensive network of ATMs where you can withdraw cash. However, be mindful of the fees charged by your bank for using ATMs that are not affiliated with them.

Taxes

• Tax Identification Number (TIN): When you start working in Finland, you will need to obtain a Finnish Tax Identification Number (TIN) from the Finnish Tax Administration (Verohallinto). This number is essential for filing taxes and conducting financial transactions in Finland.
• Income Tax: In Finland, income tax is progressive, meaning that the more you earn, the higher the tax rate. The tax rates range from 0% to 31.75%, depending on your income level. Your employer will deduct income tax directly from your salary.

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• Tax Return: If you have additional deductions or expenses that can reduce your taxable income, you can file a tax return to claim these deductions. The Finnish Tax Administration provides an online platform for filing tax returns.
• Property Tax: If you own a property in Finland, you may be subject to property tax. The amount of property tax varies depending on the municipality where the property is located.

Social Security Contributions

• Kela: Kela is the Finnish Social Insurance Institution that provides various social security benefits, including healthcare, unemployment benefits, and family benefits. As an employee, you are required to contribute to Kela through social security contributions.
• Employee Contributions: As an employee, your social security contributions are automatically deducted from your salary. The contributions cover healthcare, pension, and unemployment insurance.

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• Employer Contributions: In addition to employee contributions, your employer also makes social security contributions on your behalf. These contributions are separate from your salary and are paid directly by your employer.
• Kela Benefits: By contributing to Kela, you become eligible for various benefits, such as healthcare services, maternity and paternity benefits, and unemployment benefits. Familiarize yourself with the benefits available to you to make the most of the social security system in Finland.

Payment Methods

• Bank Transfers: Bank transfers are a common payment method in Finland. You can transfer money from your bank account to another person’s account using their account number and the recipient’s bank’s BIC (Bank Identifier Code) and IBAN (International Bank Account Number).
• Debit and Credit Cards: Debit and credit cards are widely accepted in Finland. Most establishments, including shops, restaurants, and online retailers, accept card payments. Visa and Mastercard are the most commonly accepted card networks.
• Mobile Payments: Mobile payment apps, such as MobilePay and Pivo, are popular in Finland. These apps allow you to make payments using your smartphone, either by scanning a QR code or transferring money directly to another person’s mobile number.
• Cash: While electronic payments are prevalent in Finland, it is still advisable to carry some cash for situations where card or mobile payment options are not available.

Conclusion

Managing your finances and payments while working in Finland requires understanding the local banking system, tax regulations, social security contributions, and payment methods. By familiarizing yourself with these aspects and making informed decisions, you can effectively manage your finances and enjoy a smooth financial experience in Finland.

References

– Nordea Bank: www.nordea.fi
– OP Group: www.op.fi
– Danske Bank: www.danskebank.fi
– Finnish Tax Administration (Verohallinto): www.vero.fi
– Kela: www.kela.fi