Higher taxes: more services and benefits In a nutshell, the higher tax rate in Finland guarantees services and benefits that are usually not available for free. We tend to think it increases equality and supports those who are more vulnerable or have a more difficult start in life.
The tax wedge for the average single worker in Finland remained unchanged at 43.1% in 2021 and 2022. The OECD average tax wedge in 2022 was 34.6% (2021, 34.6%). In 2022, Finland had the 6th highest tax wedge among the 38 OECD member countries, compared with 8th in 2021.
Finland has a top tax rate of 51.6% as of 2016. In United Kingdom, the top tax rate is 45.0% as of 2016. Finland has a GDP per capita of $47,300 as of 2020, while in United Kingdom, the GDP per capita is $41,600 as of 2020. In Finland, 12.2% live below the poverty line as of 2019.
Finland has a top tax rate of 51.6% as of 2016. In Australia, the top tax rate is 45.0% as of 2016.
Conclusion. The tax rates in Australia are among the highest in the world. Compared to the US, high earners will be paying far higher rates on much lower incomes. However, compared to the UK, Australia's tax rates are on par, or slightly lower.
Finland - At Risk of Poverty rate was 12.70% in December of 2022, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for Finland - At Risk of Poverty rate - last updated from the EUROSTAT on July of 2023.
The standard living costs in Finland
The average living costs in Finland are generally between 600 to 900 EUR per month. The living costs certainly depend on which city you live in and what kind of accommodation you specifically choose.
First, despite often-repeated claims that Australia is a “high-tax country”, we are actually towards the bottom among industrialised nations.
Among the countries with the lowest tax rates in the world are Malta, Cyprus, Andorra, Montenegro and Singapore. Aside from zero income tax, in Antigua and Barbuda, individuals are also free from paying taxes on wealth, capital gains, and inheritance.
Denmark (55.9 percent), France (55.4 percent), and Austria (55 percent) had the highest top statutory personal income tax rates in Europe among OECD countries in 2022. Hungary (15 percent), Estonia (20 percent), and the Czech Republic (23 percent) had the lowest top statutory personal income top rates in Europe.
Finland's key economic sector is manufacturing. The largest industries are electronics (21.6% - very old data), machinery, vehicles and other engineered metal products (21.1%), forest industry (13.1%), and chemicals (10.9%). Finland has timber and several mineral and freshwater resources.
There is no minimum salary in Finland. The Employer and the employee may agree in the employment agreement on how the work is to be compensated. However, this freedom may be restricted by the salary provisions in the applicable collective agreement.
The average salary in Finland
The country's average income is above the European standard, amounting to approximately 45,684 EUR yearly, or 3,807 EUR per month. Generally, after all the required deductions set by the government, an employee, more or less, has 2,600 EUR.
If this is calculated per inhabitant, taking purchasing power parity into account, then Finland is in the list of the world's richest countries in place 22. Inflation in Finland in 2022 was around 7.12%. Within the EU, the average in the same year was 8.83 percent. In the United States, it was most recently 8.00%.
According to Statistics Finland, this decline is due to families opting not to have a second or third child. Finnish researchers say the declining fertility rate is related to cultural and social changes leading to higher standards for starting a family.
Denmark is richer than Finland overall. For example, Denmark's GDP is higher than Finland and Danish salaries also tend to be slightly higher than Finnish ones.
The main reason Australia ranks so highly on individual income tax levels is because Australians don't pay separate social security taxes. These account for an average 25.9% of total tax revenue, or close to 9% of GDP, across the OECD.
Australia's 2020 tax-to-GDP ratio ranked it 30th¹ out of 38 OECD countries in terms of the tax- to-GDP ratio compared with the 2021 figures. In 2020 Australia had a tax-to-GDP ratio of 28.5%, compared with the OECD average of 34.1% in 2021 and 33.6% in 2020.
If you make $50,000 a year living in Australia, you will be taxed $7,717. That means that your net pay will be $42,283 per year, or $3,524 per month. Your average tax rate is 15.4% and your marginal tax rate is 34.5%. This marginal tax rate means that your immediate additional income will be taxed at this rate.
Australia's GDP, which is roughly $1 trillion, is smaller than that of the United Kingdom. On the contrary, the UK's GDP is $2.4 trillion, yet Australia's low GDP fits well with its 24 million people, whereas the UK's 65 million people are spread thin.
Ultimately, Australians pay more in taxes than Americans, but, relative to other high- and low-tax countries in the OCED, not by much. The real difference is in how that revenue is spent.
Australia's top income tax rate is higher than many countries, and the global average. Countries with similar or higher income tax rates than ours include Japan (56 per cent), Britain (45 per cent), Denmark (56 per cent), Germany (45 per cent), Austria (55 per cent) and The Netherlands (52 per cent).