The Incomes Register has added more instructions on reporting bicycle benefits and employer-subsidised commuter tickets when the fringe benefit is granted as a deduction from monetary wages

4/28/2021

A new version of the detailed guideline Reporting data to the Incomes Register: fringe benefits and reimbursements of expenses has been published.

Instructions and examples for situations where an employee is granted an employer-subsidised commuter ticket as a fringe benefit by deducting the benefit from the employee’s monetary wages have been added to section 1.1.2 of the guideline. Instructions and examples for situations where an employee is granted a bicycle benefit by deducting the benefit from the employee’s monetary wages have been added to section 1.1.3 of the guideline.

Fringe benefits granted as deductions from monetary wages are income subject to earnings-related pension and unemployment insurance contributions as well as accident and occupational disease insurance contributions

The employer-subsidised commuter ticket and bicycle benefit can be granted by deducting them from the employee’s monetary wages by separate agreement between the employer and the employee. In this case, the amount corresponding to the granted tax-exempt fringe benefit’s value is deducted from the employee’s monetary wages. This means that the fringe benefit reduces the amount of the employee’s taxable gross wages. It also reduces the amount of the employee’s wages subject to withholding and health insurance contributions.

However, it should be noted that the earnings-related pension and unemployment insurance contributions and the accident and occupational disease insurance contributions are calculated based on the amount of the wages before the value of the fringe benefit is deducted. From the point of view of the earnings-related pension, unemployment insurance, and accident and occupational disease insurance contributions, tax-exempt fringe benefits that are granted as deductions from monetary wages are paid as remuneration for work, which is why the amount of income used as the grounds for these contributions is different from the amount considered as taxable income.

Fringe benefits granted as deductions from monetary wages are reported with the income types 322–324 in 2021

The fringe benefits are reported to the Incomes Register just like typical fringe benefits granted as wage supplements. However, when reporting the tax-exempt share of the wages, the payer must use the income types for substitute payers to ensure that the correct amounts of social insurance contributions are collected from the payments made.

  • 322 Wages paid by substitute payer: employer pays for employer’s earnings-related pension insurance contribution
  • 323 Wages paid by substitute payer: employer pays for employer’s unemployment insurance contribution
  • 324 Wages paid by substitute payer: employer pays for accident and occupational disease insurance contribution

These income types are used in 2021 even though there is no actual substitute payer in this case. This reporting practice will change in 2022.

Correcting reports already submitted for 2021

If a payer has already submitted reports to the Incomes Register in 2021 that included employer-subsidised commuter tickets as fringe benefits granted as deductions from monetary wages, the payer must correct the reports submitted. The Tax Administration will not impose a late-filing penalty for the corrected reports.

See examples on reporting and read more in the detailed guideline: Reporting data to the Incomes Register: fringe benefits and reimbursements of expenses

Read more (in Finnish): Työsuhdepolkupyöräedun ja työsuhdematkalippuedun ottaminen huomioon eläkkeen perusteena olevassa työansiossa (tyoelakelakipalvelu.fi).