This may well work in places like the US or the UK, but in Finland (where I live), this is a way to work more and get paid less, per unit time that you work.
How does this work?
1- If you have a job already, you get a salary and you get to pay taxes on your income. These are deducted at source. You will usually pay about 19 - 30% on your gross income, depending on your salary level and any modifying circumstances that would mitigate against higher tax costs.
So you take a second job on the side, working independently, and you will pay 50% of that money to the government in taxes. For every euro you earn, you will lose 50 cents. This makes it a poorly-viable option to go into a second job as self-employed.
2- If you are not in a steady job, then your incentive to do part-time work self-employed or for anyone else is even lower. Your income support with be reduced by 50%, and the tax you pay will amount to more than 50% of what is left. Eventually, you arrive at a point where you do some work for, say, 1000 euros during a 28 day period, and you get paid, and you declare your earnings. This is automatic since it goes into your bank account, and the Social Insurance Institution gets to look into that if you are unemployed.
When you get that money, you have your full income support and the next month, you find you have lost 500 euros of your insome support. You then get a tax bill for the taxes on your earnings - that's about 300 euros.
You worked 28 days for 200 euros. And the money you have to live on is very small for a month: 100e + 200e = 300e =/= an amount upon which you can actually live in Finland!
Reader Comments
Back to article
Nick 1:08AM May 23, 2012