How to pay yourself as a sole trader in Finland: owner drawings (yksityisotto)

Karma Accounts · Published 20 October 2026

As a sole trader (toiminimi) in Finland you cannot pay yourself a salary. You pay yourself by transferring money from the business account to your own account, and that transfer is a private withdrawal (yksityisotto): no tax is withheld from it and it is not a business expense. You are taxed on the profit of the business, whatever you take out, so the tax is usually paid through tax prepayments instead.

Why a toiminimi owner cannot pay themselves a salary

A toiminimi is not a legal person separate from you. The Tax Administration (Verohallinto) says a business operator cannot pay themselves wages or fringe benefits. Wages paid to your spouse, or to a child who had not turned 14 before the tax year, are not deductible either (EVL 16 §). If you and your spouse run the business together, the earned-income share of the profit is split between you by your work input instead (TVL 14 §).

You can pay wages to employees in the normal way; see hiring your first employee. If you still invoice through a service, light entrepreneur or toiminimi shows how each one pays you.

How to pay yourself: the private withdrawal

In practice "paying yourself" means a bank transfer from the business account to your personal account. The Tax Administration's guide for new entrepreneurs says you can make private withdrawals from the business account and no tax is withheld from them.

It is not a cost. The Form 5 instructions say not to book money taken from the business account as a business expense.
It needs no profit. Business funds can be withdrawn even when the business has made no profit; the withdrawal is booked against equity.
A private bill paid from the business account is a withdrawal too, booked the same way as a transfer to yourself.

Private investments (yksityissijoitus)

Money moves the other way as well. When you put your own money into the business, or pay a business cost with your personal card, that is a private investment. It is not income and is not taxed. The cost itself is deductible as far as it is a business expense with a proper voucher; equipment with a longer life is depreciated instead.

Assets have rules for their value:

A private asset brought into the business, such as a computer you already own, enters the books at its original acquisition cost, or at its lower probable selling price at the time (EVL 51 a §).
Goods taken for yourself count as business income at their original acquisition cost, or a lower probable selling price (EVL 51 b §). In the Tax Administration's example, two items bought for resale at 500 euros each and taken home add 1 000 euros to income. If you deducted VAT on them, the own use can be subject to VAT as well: for a natural person, own use of up to 850 euros a year, VAT excluded, is minor, and VAT is due only on the part above that.
Private use of a business car, phone or premises: leave the private share of the costs out of your expenses, or add it back to income if it is already deducted; see the car in the business or in your own name.

How a private withdrawal is booked

What happens	In the books	Effect on taxable profit
Transfer to your own account	private withdrawal	none
Private bill paid from the business account	private withdrawal	none
Own money into the business account	private investment	none
Business cost paid with your own card	cost and private investment	the cost is deductible
Goods from stock for yourself	withdrawal and income	original cost or lower probable price

With double-entry books, withdrawals and investments go to a private account (yksityistili), an item of equity. With single-entry books they still need to be marked, so that no withdrawal is booked as a cost. Every entry rests on a dated, numbered voucher that shows the transaction (Accounting Act, chapter 2, section 5); for a transfer to yourself, the bank statement serves when it shows the date, the amount and the accounts.

With double-entry books, Form 5 asks for an equity specification and for the money you withdrew from and deposited into the business account during the calendar year. The rest of the form is in the parts of the sole trader tax return people get wrong.

Tax follows the profit, not what you withdraw

The profit of the business is your personal income. It is business income less deductible expenses (our list of deductions sole traders forget helps here). Confirmed losses from earlier years are deducted, and in 2026 a 5 % entrepreneur's deduction (yrittäjävähennys) still lowers the taxable amount. What is left is split into two parts:

Capital income (pääomatulo): by default a 20 % return on the net assets of the business at the end of the previous year; in your first year, at the end of that year. 30 % of the wages you paid in the 12 months before the end of the tax year is added to the net assets. Capital income is taxed at 30 %, and at 34 % on the part of your total capital income over 30 000 euros. You can ask for 10 % instead, or for the whole profit to be taxed as earned income; gains on selling business real estate and securities stay capital income either way.
Earned income (ansiotulo): the rest, taxed at your progressive rate together with any other earned income.

Say your profit is 40 000 euros, you have no earlier losses, and you withdrew 25 000. After the 5 % entrepreneur's deduction, 38 000 euros is taxed and split; the 15 000 left in the account is taxed anyway. Withdrawing cash does not change your capital income share either, because an ordinary business bank account is not counted in net assets. How the split works, and when the 10 % or 0 % choice pays, is in our article on net assets and the capital income share.

Withdrawals matter when there is debt. Equity is what you have put in and earned over the years, opening equity included, less what you have taken out; withdrawing more than the year's profit only makes it negative when the earlier equity runs out. When equity is negative and business loans fund the gap, part of the interest is not deductible from business income: the adjusted negative equity (negative equity less losses not covered by retained profits, plus any revaluations) times the base rate (peruskorko) plus one percentage point (EVL 18 §).

Tax prepayment: how to avoid residual tax

Because nothing is withheld from your withdrawals, the tax on the profit is generally paid in advance as a tax prepayment (ennakkovero). It is based on an estimate of the profit and all your other income, a start-up grant included if you get starttiraha. You request it in MyTax and can change it several times a year. If the business is small, its income can instead be taken into account on your tax card.

If the prepayment is too low, the rest becomes residual tax (jäännösvero). It carries late-payment interest with relief from 1 February after the tax year, less 20 euros; the rate is 4.5 % in 2026 and is set for each year, so for tax year 2026 the 2027 rate applies. An additional prepayment avoids it: a sole trader can request one in MyTax from December of the tax year, at least 170 euros, and pays no interest when it is paid by the end of January. Our article on tax prepayment covers the instalments and changes.

YEL is not based on your withdrawals

Your YEL pension insurance has its own income figure. YEL income is the value of your work in money, roughly the wage you would pay someone else to do the same work; it is not your profit and not what you withdraw. In 2026 the contribution is 24.40 % of it, with a 22 % discount for 48 months if you are self-employed for the first time. The contributions are deductible in full, once: on Form 5, on your own personal return or on your spouse's.

YEL income also sets your sickness and parental allowances and your earnings-related unemployment allowance, so setting it low to save money has a cost. The 2026 limits are in our article on YEL in 2026.

Practical rules for taking money out

Keep a separate business bank account, so every transfer to you is visible and private payments do not mix with costs.
Set aside what is not yours first: the VAT on your sales, the next prepayment instalment and the YEL contribution.
Withdraw a fixed amount once a month, and adjust it when the books show the profit.
Check the prepayment against the books a few times a year.

An illustrative month: sales of 6 275 euros including VAT at 25.5 % (5 000 euros plus 1 275 euros VAT) and costs of 1 004 euros including VAT (800 plus 204). VAT to pay is 1 071 euros. With a 600 euro prepayment instalment and a 400 euro YEL contribution, about 3 200 euros is free to withdraw, less a buffer for slow months.

When an Oy makes more sense

In a limited company (Oy) the company is a separate person: the money in it is the company's, its profit is taxed at 20 %, and you pay yourself a salary through payroll, dividends, or both. An Oy may be worthwhile once the profit is more than you need to live on, but that takes a comparison with your own figures. We compare the two in toiminimi vs Oy and explain the change in turning a toiminimi into an Oy.

What we do

We book your withdrawals and investments every month, keep them apart from the costs, and tell you when the profit says your prepayment should change, which helps avoid surprises at the final assessment. At the year end we fill in the equity specification on Form 5 and deduct your YEL contributions. How a new toiminimi starts with us is in an accountant for a new sole trader.

Sole trader accounting costs 69 euros a month plus VAT 25.5 %, with bookkeeping, VAT returns, the business tax return and the software included and no limit on receipts. See the price list or request a quote.

Frequently asked questions

How do I pay myself as a sole trader in Finland?

Transfer money from the business bank account to your own account. That is a private withdrawal (yksityisotto): no tax is withheld and it is not a cost. You pay the tax on the profit, usually through tax prepayments.

Can a sole trader pay themselves a salary in Finland?

No. A toiminimi is not separate from you, so you cannot pay yourself wages or fringe benefits, and wages paid to your spouse or to a child under 14 are not deductible. You can pay salaries to employees.

Are owner drawings taxed in Finland?

Not as such. You are taxed on the profit of the business, split into capital and earned income, however much or little you withdraw. Goods or assets taken for private use are different: they count as business income.

How much can I withdraw from my toiminimi?

As much as is in the account, but withdraw only what is left after VAT, the prepayment instalment and YEL are set aside. Withdrawals that run equity negative can cost interest deductions on business loans.

Sources

Please note: this is general information about Finnish rules, not advice for your own situation, and the rules change. Ask us before you act on it.

Accounting for your toiminimi

Bookkeeping, VAT returns and the business tax return from 69 € a month plus VAT, with no limit on receipts. See accounting for sole traders or accounting for food couriers.

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