Sole trader or limited company calculator
Compare how much of the same profit you take home as a sole trader and as a limited company under 2026 taxation. In a limited company, you can choose how much to take as salary and how much as dividends.
Revenue less business expenses.
The rest of the profit is distributed as dividends after corporate tax.
The same work income in both business forms.
For a sole trader, 20% of it is capital income; in a limited company, 8% of it can be distributed as a lightly taxed dividend.
Municipal tax 7.57 %
- A sole trader leaves you more each year
- 2,376.26 €
- Sole trader: take-home pay per year
- 47,207.56 €
- Sole trader: taxes and YEL
- 22,792.44 €
- Limited company: take-home pay per year
- 44,831.30 €
- Limited company: salary and dividend
- 36,000.00 € + 19,622.72 €
- Limited company: taxes and contributions
- 25,168.70 €
Tilit AI
Bookkeeping for either business form
Tilit handles invoicing, receipts and bookkeeping for sole traders and limited companies. Your accountant can work in the same service all the way to the financial statements.
- Invoicing, receipts and purchase invoices in one app
- Automatic posting and reconciliation
- Payroll for limited company owners
How the calculator works
For a sole trader, the YEL contribution and the 5% entrepreneur deduction are deducted from profit. 20 % of net assets is taxed as capital income and the rest as earned income.
In a limited company, the company pays the salary, its health insurance contribution and the YEL contribution. 20 % corporate tax is paid on the remaining profit, and the rest is distributed as a dividend. The dividend is capital income up to 8% of net assets and earned income for the part exceeding that.
Both options use the same YEL work income and municipality of residence, and taxes are calculated using the 2026 rules as in the Finnish Tax Administration's tax rate calculator. The calculation assumes that you own all the shares, distribute all the profit and have no other income. Bookkeeping and set-up costs are not taken into account.
The calculator gives an indicative estimate and is not tax or investment advice. Check your own situation with an accountant or the Finnish Tax Administration. Find an accountant
Frequently asked questions
A limited company usually pays off when profit grows so large that the marginal tax rate on a sole trader's earned income becomes high, or when profit is retained in the company for growth. The company's 20 % corporate tax and the lightly taxed dividend then reduce the total amount of tax.
A sole trader is liable for the business's debts with all their assets. A limited company shareholder's liability is usually limited to the capital invested.
Yes. A sole trader business can be converted into a limited company through a business transfer. Ask an accountant when the change is worthwhile.
Get notified when the figures change
We will update the calculators when the 2027 tax rates and contributions are confirmed. Subscribe to get notified, along with entrepreneur tips on saving time and money in financial administration.
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