How is a toiminimi’s profit taxed?
Taxable profit is income minus deductible expenses. The Tax Administration automatically deducts a 5% entrepreneur allowance (yrittäjävähennys) and divides the rest into capital and earned income.
Capital income and earned income
By default, 20% of the return on the company’s net assets is treated as capital income (you may also choose 10% or 0%). Capital-income tax is 30% up to €30,000 and 34% above that. The rest is taxed as earned income on the progressive scale: state income tax, municipal tax, health insurance contribution and possibly church tax.
The figures are for 2026 and indicative. Confirm your own situation with an accountant.
You don’t pay yourself a salary
In a toiminimi you don’t pay yourself a salary — you take money out as private withdrawals (yksityisotto). Withdrawals are not a deductible expense and don’t reduce taxable profit: you are taxed on the whole profit regardless of how much you withdrew.
YEL — self-employed pension insurance
YEL is mandatory if you are 18 or over, the activity lasts more than 4 months, and your estimated YEL work income is at least €9,423.09 per year (2026). The YEL contribution is about 24.4% of the work income, and a new entrepreneur gets a 22% discount for the first 48 months. YEL work income also determines your pension and your sickness and parental allowances — so don’t underestimate it.
Prepaid tax (ennakkovero)
You pay tax in advance based on estimated profit, in prepaid-tax instalments via OmaVero. If your income changes, you can adjust the prepaid tax during the year to avoid a back tax or over-paying.
What can you deduct?
- Purchases and supplies related to the business.
- Tools and software.
- Travel and car costs for work trips.
- Phone and internet for the work-use share.
- A workroom or part of your home.
- Insurance and YEL contributions.
VAT separately
In addition to income tax, you may be liable for VAT if your turnover exceeds €20,000 in a calendar year. VAT is reported separately in OmaVero — see our VAT guide for details.
Help with toiminimi taxation
We handle the bookkeeping, VAT returns and prepaid tax, and make sure you deduct everything legally — in your language. You see your situation in real time in Vaavo.
Frequently asked questions
- How much tax does a toiminimi pay?
- There is no single rate: profit is split into capital income (30/34%) and earned income (progressive) after a 5% deduction. The final tax depends on profit and net assets.
- Do I pay myself a salary?
- No. In a toiminimi you take money out as private withdrawals, and you are taxed on the whole business profit regardless of the amount withdrawn.
- Is YEL mandatory?
- Yes, if your YEL work income is at least €9,423.09 (2026) and the other conditions are met. The contribution is about 24.4%, and a new entrepreneur gets a 22% discount for 48 months.
- What can a toiminimi deduct?
- Business-related expenses: supplies, tools, travel, phone, a workroom, insurance and YEL. Keep your receipts and vouchers.
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