Remember the tax benefit of YTK membership fee

Topics

• Membership
• YTK

When you fill in your tax return or check your pre-completed return, remember that you can deduct the General Unemployment Fund YTK membership fee.

According to the Income Tax Act, the membership fee is an income-generating expense, so it is tax deductible. It is worth noting that the membership fee is not tax deductible, but is deducted from the income from which the tax is calculated.

How big is the reduction?

Your income, deductions, and the municipality and parish of which you are a member will affect your tax bill. Age, spouse and children also affect your tax. The exact amount in euros is therefore always individual. In addition, state tax progressions, tax rates, municipal and church taxes and general tax and deductions, as well as the contributions and thresholds that affect them, can vary from year to year, so the answer to this question will also change from year to year.

In practice, however, the tax math on income means that the euro impact of the deduction remains almost the same across income brackets. Interestingly, as income increases, the euro amount of the deduction also increases, reducing the overall cost of the contribution. Thus, those with higher incomes can join the unemployment fund at a lower cost. However, there is no inequity in this, bearing in mind that higher income earners pay proportionally more in taxes and unemployment insurance contributions.

The table below shows the size of the reduction, with only income varying.

monthly salary €	Yearly salary ​​​​​​​(monthly x 13) €	Tax deduction €	Membership fee – deduction €
2 000	26 000	41,26	73,74
2 250	29 250	41,26	73,74
2 500	32 500	36,03	78,97
2 750	35 750	51,20	63,80
3 000	39 000	51,21	63,79
3 250	42 250	51,21	63,79
3 500	45 500	51,19	63,81
4 000	52 000	51,20	63,80
4 500	58 500	55,80	59,20
5 000	65 000	55,80	59,20
8 000	104 000	66,06	48,94

Calculating the amount of tax you have to pay yourself requires Googling and reading the tax authorities’ instructions. However, it is an interesting and educational exercise. I can highly recommend it if you need a little nut to crack:)

The easiest way to estimate the tax impact of membership fees with your own data is to try the taxman’s calculator. You can put in your own data and calculate the taxes with and without the membership fee.

An example calculation

I tried the taxman’s calculator by choosing Akaa as my municipality of residence and an Evangelical Lutheran parish. I left out my spouse and children. I threw 1974 out of the hat as the year of birth and set the income at 40 000 euros. I did not put any other income. Apart from the General Unemployment fund YTK membership fee (115 €) I did not put any other deductions (the YTK membership fee is not tax deductible).

With this information, in 2022 the taxes would be as calculated by the tax authorities:

Non member taxes per year:                                 8 514,97 €
YTK member’s taxes per year:                         8 463,76 €

From the above, it can be calculated that in the example situation, the YTK membership fee reduces the tax payable by 51.21 €.

The total cost of membership (membership fee – tax deduction) is therefore 63.79 € (115 € – 51.21 €). The YTK Association’s membership fee is 22 €, giving a total annual cost of 85.79 € (63.79 € + 22 €).

Advantageous

The total annual (in 2022) membership fees to the General Unemployment fund YTK and YTK Worklife will be 137 €. This is already an affordable package, but with a tax deduction it can be reduced to, for example, 85 €.

So for around 85 € you get a smoothly running income protection from Finland’s largest and most popular unemployment fund, and from YTK Worklife you get comprehensive working life services, good insurance for different situations and personal legal assistance.

However, you can only benefit from this advantage if you remember to take advantage of the possibility to deduct the unemployment fund membership fee in your tax return. So now is the time to pay attention.