Limited company (Oy)
Net assets: The company’s accumulated net assets from previous years plus the current year’s retained profit after tax, before dividends. Net assets determine how much dividend can qualify for preferential tax treatment.
Preferential dividend (max 8%): An annual dividend of up to 8% of the company’s net assets can qualify for preferential treatment. Of that amount, 75% is tax-exempt and only 25% is taxed as capital income (30%), provided the dividend does not exceed €150,000 per year. Above €150,000, 85% of the excess is taxable. The “max 8%” button calculates this amount automatically.
Dividend exceeding 8% of net assets: If the dividend exceeds the 8% threshold, the excess is taxed as earned income (75% taxable, 25% tax-exempt) under the progressive income tax scale. This is generally less favourable.
Corporate income tax: Company profit is first subject to corporate income tax (the explanatory example uses 20% for 2026). Only after corporate tax can profit be distributed as dividends or retained to increase net assets. Use the rate entered in the calculator for your comparison.
Sole trader (TMI)
In this calculator’s sole-trader model, all profit is taxed as personal earned income under the progressive scale. YEL contributions are deductible and a 5% entrepreneur deduction applies. The model taxes all profit immediately rather than retaining it in a separate company.
Employee
An employer pays additional costs on top of gross salary, including TyEL pension contributions, unemployment insurance and health insurance. The calculator estimates the maximum salary when total employer costs equal your revenue. Employee pension accrual under TyEL differs from YEL.
Income-earning expense deduction (€750): An automatic deduction that reduces taxable income. It covers work-related expenses such as travel and equipment.
Work income deduction: A tax credit deducted first from state income tax and, if it exceeds that, from municipal tax, church tax and the health care contribution. In 2026 it is 18% of earned income, at most €3,430, reduced by 2% of net earned income above €35,000 up to €50,550.
YEL insurance
YEL is the Finnish self-employed persons’ pension insurance scheme. Select whether the company pays the contributions, deductible for the company, or you pay them personally, deductible in personal taxation.