Correcting data in the Incomes Register

Date of issue
12/11/2020
Record no.
VH/8120/05.00.00/2020
Validity
1/1/2021 - Until further notice

These instructions are intended for payers who are correcting earnings payment data they have reported to the Incomes Register. The instructions describe

  • how to correct an earnings payment report and an employer's separate report in the Incomes Register;
  • how to report overpayment and other unjust enrichment; and
  • how to report a recovered payment.

The instructions include examples of correcting information in various cases. The examples do not include all mandatory data that must be entered in the report, but only information that is essential to making corrections. The page Correcting earnings payment data describes the most common situations involving corrections with the help of examples and infographics.

These instructions replace the previous Correcting data in the Incomes Register instructions. We have made the following additions and clarifications to the instructions:

  • Added an example to Section2.1.2 regarding correcting a partial pay during sick leave.
  • Clarified the reporting instructions in Section2.3.1, Correcting tax withheld when the amount was too high, and added an example to the section.
  • Supplemented the instructions in Section4.2 regarding the adjustment of the payer’s self-assessed taxes in net recovery situations.
  • Added Section4.10 and examples of the recovery of fringe benefits.
  • Added Section6.4 on the impacts of report cancellations on the payment of self-assessed taxes.
  • Added Section8 at the end of the instructions. The section contains a description of the key rules regarding the procedure for correcting data, as well as examples of the reporting of overpayment using different methods (net recovery, gross recovery and offsetting from wages).
  • The amounts of employee contributions used in the examples have been updated to the 2021 level. Some minor technical corrections and additions have also been made to the instructions.

Otherwise these instructions are similar in outline to the earlier instructions.

1 Correcting data in the Incomes register

1.1 How to correct data?

The payer is responsible for the accuracy and correction of any data it has submitted to the Incomes Register. If incorrect data in the Incomes Register is based on the payer's report, the payer is obliged to correct the incorrect data it has reported. If an income earner notices incorrect information concerning him or her in an earnings payment report in the Incomes Register, the income earner must make a correction request to the appropriate payer.

Data in the Incomes Register is, as a rule, corrected using the replacement method. This means that the original report is amended so that all of the report data is resubmitted, including the data that was correct in the original report, in addition to new and changed data. The replacement report is made for the same payment date as the original.

A record submitted by a payer can include earnings payment reports for several income earners. A report refers to data on one payment transaction paid to a single income earner. One record may contain both erroneous and correct reports. The entire record does not need to be resubmitted; it is enough for the payer to correct the erroneous reports.

The data reported to the Incomes Register can be maintained and corrected as long as it is retained in the Incomes Register. Data is stored in the Incomes Register system for 10 years from the beginning of the year following the year in which the data was registered. As a rule, this equals the time employers are obligated to retain their payroll and other accounting data. Reporting to the Incomes Register does not replace the employer's storage obligation regarding its accounting data or other materials. It should be noted, however, that some data users may be entitled to obtain data from the Incomes Register for a period of less than ten years, for example due to appeal deadlines or time periods taken into consideration in the granting of benefits.

The payer can also cancel, or delete, a report or a record containing several reports it has previously submitted. In certain cases, the payer must correct the information by cancelling the previous report and then resubmitting the report with the correct information. The cancellation of information is described in Section 5. Section 6 describes cases where a replacement report cannot be used, requiring the previous information to be cancelled first.

Payments made on 1January 2019 and later, and any corrections to be made to such data, are reported to the Incomes Register (see Section1.7, ‘How to correct data submitted prior to 2019?’).

The correcting of benefits payment data is discussed in more detail in the ‘Benefits: Reporting data to the Incomes Register’ instructions.

1.2 When must a correction be made?

The payer must correct any erroneous reports it has submitted without undue delay. This means that erroneous reports must be corrected as soon as the error is noticed. Postponing the correction to the next payroll run, for example, is not allowed. The deadlines for reporting data to the Incomes Register do not apply to correcting data. All payers, from households to those submitting their reports on paper, must correct any incorrect information without undue delay. Without undue delay means that the data must be corrected as soon as can be reasonably expected from the data submitter's perspective.

An unjust enrichment must be reported without undue delay and no later than within one month of becoming aware of the unjust enrichment. Unjust enrichment means a mistakenly paid payment or benefit to which the income earner is not entitled. An unjust enrichment occurs when, for example, a payment is made on incorrect grounds, to the wrong person, or in an incorrect amount. If the next payroll run is done within one month of the detection of the unjust enrichment, the payer can submit information on the unjust enrichment during this payroll run.

Information on amounts paid back must be reported no later than on the fifth calendar day after the day of becoming aware of the payment of the recovered amount, its payer, and the unjust enrichment to which the payment is connected. The five-day time limit begins from when the received payment has been connected in the ledger and the payroll to the income collected from the income earner.

If information submitted for the payment month is not corrected until after the eighth day of the month following the payment month, a penalty may result in certain situations. The determination of penalty fees is described in more detail in the instructions Reporting income data: penalty fees.

1.3 What data must be corrected?

All errors in the report data must be corrected. This applies both to income data and other mandatory data (section 6 of the act on the incomes information system (laki tulotietojärjestelmästä 53/2018)), mandatory identifying and contact information (section 8) and complementary additional data (section 7) stored in the Incomes Register. Thus, for example, absence data and employment data submitted as complementary additional data must be corrected if they contain errors.

With respect to correcting a report, it does not matter, for example, whether wages paid have been reported using the Incomes Register's reporting method 1 or reporting method 2.

1.4 How is a correction allocated to the correct report?

An income earner may have several valid earnings payment reports from the same payer with the same pay period and payment date. If the payer selects 'New report' as the action type, the report will not replace a previously submitted report, even if the pay period and payment data were the same. When you wish to correct a previously submitted report, select 'Replacement report' as the action type. Correction of data uses report references that allow the correction or cancellation to be allocated to the correct report.

1.4.1 Incomes Register's report reference

When submitting a new report, the payer always receives a report reference generated by the Incomes Register, which can be used to allocate a later correction to the correct report. If the new report is submitted via the technical interface or the upload service, the Incomes Register will return the report reference to the payer in the processing feedback. If, however, the new report is submitted via the online form of the e-service, the Incomes Register will add a report reference to the report.

1.4.2 Payer's report reference

If the payer is unable or unwilling to use the report reference generated by the Incomes Register, a payer's report reference can be used in the correction process. The payer can generate this reference, which must be unique for each report. Numbers and letters, for example, can be used when generating a reference. The characters allowed in a reference are described in Section 1.2, Character set, of the document 'Data delivery - Schemas - Earnings payment report'. The length of a reference is described in Section 2.12, Service data. The payer's payroll system can generate the reference automatically or, depending on the system implementation, the payroll system can ask the user to enter a reference manually.

The payer must generate a payer's report reference when using the technical interface or the upload service, and a new report is being submitted to the Incomes Register for the first time. If a new report is submitted using the e-service online form or on a paper form, and the payer does not submit a payer's report reference, the Incomes Register will generate the required reference for the submitted report. If, exceptionally, the information has been submitted to the Incomes Register on a paper form, the report reference will be sent to the payer in a letter.

1.4.3 Report version number

The Incomes Register assigns version number 1 to a new earnings payment report, while the version number assigned to a replacement report is one higher than the version number of the report that was replaced. If the data is submitted via the technical interface or the upload service, the Incomes Register will return the version number to the submitter in the processing feedback. The payer cannot assign a version number to the first, so-called 'new report'.

Using the version number when correcting data is not mandatory, but it is recommended. Submit the version number to which you wish to allocate the correction on the replacement report. This will ensure that the corrections or cancellation are performed for the correct report. If a version number is not used, the Incomes Register will always perform the action on the latest version of the report. When a version number is used for allocating a replacement, you can ensure that any changes made in another process are not inadvertently overwritten.

1.5 Will the reporting method or channel affect corrections?

The payer chooses whether to report the wages paid as a total amount (the lower level of detail for reporting monetary wages, or the so-called reporting method 1) or by using the complementary income types (the greater level of detail for reporting monetary wages, or the so-called reporting method 2). Monetary wages must be reported using at least reporting method 1. The reporting is described in more detail in the instructions Reporting data to the Incomes Register: monetary wages and items deducted from wages.

With respect to correcting data, it does not matter which reporting method was used. Neither does it matter whether complementary additional data has been submitted. Incorrect information must always be corrected. The examples in these instructions will discuss the correction of data submitted using both reporting methods.

The reporting channel does not affect the correcting of a report, either. Reports submitted via the technical interface, for example, can be corrected using the e-service online form, or reports uploaded as a file can be corrected via the technical interface.

1.6 What reports does the Incomes Register's correction procedure apply to?

The instructions apply to the correction of information on earnings payment reports and employer’s separate reports. Most of the examples in these instructions concern the correction of an earnings payment report. Correcting an employer’s separate report is discussed separately in Section7. The correcting of benefits payment reports is discussed in more detail in the ‘Benefits: Reporting data to the Incomes Register’ instructions.

If the income data on an earnings payment report changes in such a manner that the amount of the employer’s health insurance contribution also changes, the payer must also correct the submitted employer’s separate report on which the total amount of health insurance contribution is reported.

1.7 How to correct data submitted prior to 2019?

Payments made on 1 January 2019 and later are reported to the Incomes Register, and any corrections to be made to these incomes. Reports submitted in 2019 and later are corrected according to these instructions. If payments made prior to 2019 are corrected in 2019 or later, the corrections should not be reported to the Incomes Register. Corrections to payments made prior to 1 January 2019 are made directly to each data user.

However, payments recovered on 1 January 2019 or later are reported to the Incomes Register, even if the original income had been paid prior to 2019. Even though the data on recovery is reported to the Incomes Register, the payer should note that some of the data users may also require that the annual information return filed for 2018 be separately corrected according to the instructions of the data user in question. If necessary, the payer should contact the customer service for submitters of an annual information return.

Example 1: A payment paid in 2018 is recovered from an income earner in 2020.

In December 2018, the income earner was paid EUR 450 as overtime compensation. After making the payment, the payer notices having incorrectly paid EUR 150 too much. The income cannot be recovered from the income earner in 2018. The payer has reported EUR 450 on the annual information returns.

The overpayment is recovered as a gross amount from the income earner in connection with the January 2020 payment of wages. In January, the income earner is paid EUR2,500 as monthly wages.

The payer reports the following data in an earnings payment report:

Example 1
NEW REPORT
Type of action: New report
Payer's report reference: 201901201500 (Mandatory via the technical interface and the upload service)
PAY PERIOD
Payment date: 20.01.2020
The start date of the pay period: 01.01.2020
The end date of the pay period: 31.01.2020
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Occupational class: Statistics Finland's classification of occupations
Occupational class ID:NNNNN
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
Start date of the employment: 01.01.2010
INCOME TYPE DETAILS EUR
201 Time-rate pay 2500.00
235 Overtime compensation 150.00
Recovery: Yes  
Earnings period: 01.12.2018–30.12.2018  
Additional recovery details:  
Recovery date: 20.01.2020  
Original pay period: 01.12–30.12.2018  
The original payment date: 20.12.2018  
402 Withholding tax (from EUR 2,500) 500.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,500) 178.75
414 Employee's unemployment insurance contribution (from EUR 2,500) 37.10

2 Correcting incorrect data

The need to correct a report may arise from a payment error or a reporting error. Payment errors are situations where the report as such is correct, but the amount of income paid was too small or too large. Reporting errors are in question when, for example, the income was paid correctly but reported incorrectly to the Incomes Register due to a typing error, for example. Reporting errors also include cases where information has been incorrectly reported or mandatory information has been left out entirely.

Section 2.3 describes how withholding tax is corrected and Section 2.4 how to report negative numbers.

2.1 Correcting reporting errors

In reporting errors, the original data must be corrected or the missing data added on a replacement report by resubmitting all report data, including the data that was correct in the original report.

2.1.1 Income was reported incorrectly due to a typing error, for example

If the submitted report was incorrect due to a typing error, for example, the original data must be corrected using a replacement report by resubmitting all report data, including the data that was correct in the original report.

Example 2: A typing error.

An income earner in an employment relationship valid until further notice is paid EUR 2,730 as time-rate pay. The payer withholds tax (EUR 365) and collects the employee's social insurance contributions from the wages.

The payer makes a typing error when reporting the information, due to which the amount was incorrectly reported to the Incomes Register as EUR 3,730.

Example 2, table 1/2
FIRST REPORT BEFORE THE ERROR IS DETECTED
Type of action: New report
Payer's report reference: 201901201500 (Mandatory via the technical interface and the upload service)
PAY PERIOD
Payment date: 20.01.20xx
The start date of the pay period: 01.01.20xx
The end date of the pay period: 31.01.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Occupational class: Statistics Finland's classification of occupations
Occupational class ID:NNNNN
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider:NNNNZZZZ
Start date of the employment: 01.01.20xx
INCOME TYPE DETAILS EUR
201 Time-rate pay (or some other income type of pay) 3730.00
Earnings period: 01.01–31.01.20xx*  
402 Withholding tax (from EUR 2,730) 365.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,730) 195.19
414 Employee's unemployment insurance contribution (from EUR 2,730) 38.22

* The earnings period constitutes voluntarily reported complementary additional data, which is, however, needed by several data users. It is therefore recommended that the earnings periods be reported if they are known. The earnings period is reported separately for each income type.

• The payer receives the report reference 99db0fb06b97499db0fb06b974ebea8d66ae02c3fe675 generated by the Incomes Register in the processing feedback.
• The Incomes Register assigns version number 1 to the new earnings payment report.
• The payer can use the payer's report reference when correcting, instead of the report reference generated by the Incomes Register
• The correction can be allocated to the correct report either using the Incomes Register's report reference or the payer's own report reference. Both references can also be submitted in the report.

The typing error is detected at the end of May. The payer must correct the report it submitted for January. All data, including data that was correct, must be submitted in the replacement report.

Example 2, table 2/2
REPLACEMENT REPORT
Type of action: Replacement report

Incomes Register report reference: 99db0fb06b974ebea8d66ae02c3fe675

(Alternatively, the payer's own report reference 201901201500, or both)
Report version number: 1 (complementary data)*
PAY PERIOD
Payment date: 20.01.20xx
The start date of the pay period: 01.01.20xx
The end date of the pay period: 31.01.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Occupational class: Statistics Finland's classification of occupations
Occupational class ID: NNNNN
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code:NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
Start date of the employment: 01.01.20xx
INCOME TYPE DETAILS EUR
201 Time-rate pay (or some other income type of pay) 2730.00
402 Withholding tax 365.00
413 Employee's earnings-related pension insurance contribution 195.19
414 Employee's unemployment insurance contribution 38.22

* Enter the version number of the report you wish to correct. The recommendation is that the payer specifies a version number on the replacement report, allowing the correction to be allocated to the correct report.

2.1.2 Income was reported using the wrong income type

Reporting the correct amount of payment but with the wrong income type to the Incomes Register is also a reporting error.

Example 3: Income was reported using the wrong income type.

The income earner was paid EUR 2,000 in contract pay, of which the payer has withheld tax (EUR 240) and collected the employee's social insurance contributions.

The payer has selected the wrong income type code and reported the wages paid as non-wage compensation for work, although the payment was contract pay.

The first report before the error is detected:

Example 3, table 1/2
FIRST REPORT BEFORE THE ERROR IS DETECTED
Type of action: New report
Payer's report reference: 201907011120 (Mandatory via the technical interface and the upload service)
PAY PERIOD
Payment date: 01.07.20xx
The start date of the pay period: 16.06.20xx
The end date of the pay period: 30.06.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Occupational class: Statistics Finland's classification of occupations
Occupational class ID: NNNNN
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
Start date of the employment: 01.01.20xx
INCOME TYPE DETAILS EUR
336 Non-wage compensation for work 2000.00
402 Withholding tax (from EUR 2,000) 240.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,000) 143.00
414 Employee's unemployment insurance contribution (from EUR 2,000) 28.00

• The payer receives the report reference generated by the Incomes Register in the processing feedback: 8f4a158d2f3642dea7f8b60eef5e5069

The error is detected in September. The payer must correct the report it submitted in July:

Example 3, table 2/2
REPLACEMENT REPORT
Type of action: Replacement report
Incomes Register report reference: 8f4a158d2f3642dea7f8b60eef5e5069
Payer's report reference:201907011120
Report version number: 1 (complementary data)
PAY PERIOD
Payment date: 01.07.20xx
The start date of the pay period: 16.06.20xx
The end date of the pay period: 30.06.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Occupational class: Statistics Finland's classification of occupations
Occupational class ID:NNNNN
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
Start date of the employment: 01.01.20xx
INCOME TYPE DETAILS EUR
227 Contract pay 2000.00
402 Withholding tax 240.00
413 Employee's earnings-related pension insurance contribution 143.00
414 Employee's unemployment insurance contribution 28.00

Example 4: Income is corrected due to a sick leave.

The income earner’s employment relationship started in May. They were paid EUR4,000 in wages for May. The wages paid are reported to the Incomes Register according to the amount paid.

Example 4, table 1/2
FIRST REPORT BEFORE THE ERROR IS DETECTED
Type of action: New report
Payer's report reference: 201907011120 (Mandatory via the technical interface and the upload service)
PAY PERIOD
Payment date:15.05.20xx
The start date of the pay period: 01.05.20xx
The end date of the pay period: 31.05.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Occupational class: Statistics Finland's classification of occupations
Occupational class ID: NNNNN
Earnings-related pension insurance information: Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
Start date of the employment: 01.01.20xx
INCOME TYPE DETAILS EUR
201 Time-rate pay 4000.00
402 Withholding tax (from EUR 4,000) 750.00
413 Employee's earnings-related pension insurance contribution (from EUR 4,000) 286.00
414 Employee's unemployment insurance contribution (from EUR 4,000) 56.00

It is later noticed that the income earner took a one-week sick leave in May. The payroll department is not informed of the sick leave until in June. The payer pays to the income earner 50% of the income earner’s regular pay for the sick leave period.

The payer must correct their previous report and enter 50% of the pay for one week (EUR1,000) as partial pay during sick leave (EUR500) and the remaining 50% as an overpayment, i.e. an unjust enrichment (EUR500). Reporting an unjust enrichment is described in more detail in Section3.

Example 4, table 2/2
REPLACEMENT REPORTAFTER THE ERROR IS DETECTED
Type of action: Replacement report
Payer's report reference:201907011120 (Mandatory via the technical interface and the upload service)
PAY PERIOD
Payment date: 15.05.20xx
The start date of the pay period: 01.05.20xx
The end date of the pay period: 31.05.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Occupational class: Statistics Finland's classification of occupations
Occupational class ID:NNNNN
Earnings-related pension insurance information:Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
Start date of the employment: 01.01.20xx
INCOME TYPE DETAILS EUR
201 Time-rate pay 3000.00
201 Time-rate pay 500.00
Unjust enrichment: Yes  
219 Partial pay during sick leave 500.00
402 Withholding tax(from EUR 4,000) 750.00
413 Employee's earnings-related pension insurance contribution(from EUR 3,500) 250.25
414 Employee's unemployment insurance contribution(from EUR 3,500) 49.00

2.1.3 Mandatory information was not reported

A report must also be corrected when mandatory information was not reported or was reported incorrectly. Such mandatory information includes information on non-resident taxpayers or partial owners, if the income earner is a partial owner in accordance with the unemployment security act (työttömyysturvalaki 1290/2002). Correspondingly, if the insurance information for the income type has been incorrectly reported or left out altogether, the information must be corrected.

In this case, too, the report must be corrected using a replacement report with all information resubmitted. Any missing information is added to the report.

2.1.4 Correcting data already corrected

The payer may need to correct a report it has submitted several times. The number of corrections that can be made is unlimited. All data that was correct in the previous report must be resubmitted in the replacement report in this case, too.

Example 5: The same report is corrected several times.

An income earner has been paid EUR 2,000 in wages that includes EUR 1,500 in time-rate pay, EUR 360 in overtime compensation, and EUR 140 in evening work compensation.

The payer inadvertently reports the evening work compensation as an evening shift allowance.

Example 5, table 1/3
FIRST REPORT BEFORE THE ERROR IS DETECTED
Type of action: New report
Payer's report reference: 201906011120
PAY PERIOD
Payment date: 01.06.20xx
The start date of the pay period: 01.06.20xx
The end date of the pay period: 30.06.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Occupational class: Statistics Finland's classification of occupations
Occupational class ID: 12345
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider:NNNNZZZZ
Start date of the employment: 01.01.20xx
INCOME TYPE DETAILS EUR
201 Time-rate pay 1500.00
207 Evening shift allowance 140.00
235 Overtime compensation 360.00
402 Withholding tax (from EUR 2,000) 250.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,000) 143.00
414 Employee's unemployment insurance contribution (from EUR 2,000) 28.00

• The payer receives the report reference d8bd286188fe4081bca0cc494f47289c generated by the Incomes Register in the processing feedback.

During the following week, the payer notices the mistake and submits a replacement report, correcting the incorrect data:

Example 5, table 2/3
REPLACEMENT REPORT1
Type of action: Replacement report
Incomes Register report reference: d8bd286188fe4081bca0cc494f47289c
Payer's report reference: 201906011120
Report version number: 1 (complementary data)
PAY PERIOD
Payment date: 01.06.20xx
The start date of the pay period: 01.06.20xx
The end date of the pay period: 30.06.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Occupational class: Statistics Finland's classification of occupations
Occupational class ID: 12345
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
Start date of the employment: 01.01.20xx
INCOME TYPE DETAILS EUR
201 Time-rate pay 1500.00
206 Evening work compensation 140.00
235 Overtime compensation 360.00
402 Withholding tax 250.00
413 Employee's earnings-related pension insurance contribution 143.00
414 Employee's unemployment insurance contribution 28.00

Later, the payer notices having reported the income earner's occupational class incorrectly. The payer must correct the report it submitted:

Example 5, table 3/3
REPLACEMENT REPORT 2
Type of action: Replacement report
Incomes Register report reference: d8bd286188fe4081bca0cc494f47289c
Payer's report reference:201906011120
Report version number: 2 (complementary data)
PAY PERIOD
Payment date: 01.06.20xx
The start date of the pay period: 01.06.20xx
The end date of the pay period: 30.06.20xx
INCOME EARNER DETAILS
Type of identifier:Personal identity code (Finnish) ddmmyy-1234
Occupational class: Statistics Finland's classification of occupations
Occupational class ID: 54321 (the correct occupational class)
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
Start date of the employment: 01.01.20xx
INCOME TYPE DETAILS EUR
201 Time-rate pay 1500.00
206 Evening work compensation 140.00
235 Overtime compensation 360.00
402 Withholding tax 250.00
413 Employee's earnings-related pension insurance contribution 143.00
414 Employee's unemployment insurance contribution 28.00

2.1.5 Other needs to correct a report

There may also be a need to correct a report for some reason other than an error. The work circumstances or tax liability status may change, in which case the original report needs to be retroactively corrected using the replacement method. If, for example, the work period of a foreign income earner is extended so that a non-resident taxpayer becomes a resident taxpayer, the information must be corrected.

Example 6: An income earner's taxpayer status changes.

A person who is a non-resident taxpayer and lives in Germany works in Finland between 1 January and 31 March, employed by a Finnish employer. The employee has an A1 certificate, i.e. he is insured in his home country. The income earner's tax-at-source card includes an entry on a tax at source deduction of EUR 510. The employer pays EUR 3,500 in monthly wages to the person and collects 35% tax at source, i.e. EUR 1,046.50, from the income.

The payer reports the data to the Incomes Register:

Example 6, table 1/2
FIRST REPORT
Type of action: New report
Payer's report reference:20xx03171930
PAY PERIOD
Payment date: 15.03.20xx
The start date of the pay period: 01.03.20xx
The end date of the pay period: 31.03.20xx
REPORT (INCOME EARNER) DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Type of identifier: Tax Identification Number (TIN) ZZZZZZZZ (+ country code of the country that issued the TIN)
Type of exception to insurance: Not subject to Finnish social security (earnings-related pension, health, unemployment, or accident and occupational disease insurance)
Social security certificate: To Finland A1 certificate or agreement (complementary additional data)
Non-resident taxpayer: Yes
Country code of country of residence: DE
Address in home country: An address in Germany
Address in the country of work: A temporary address in Finland (complementary additional data)
INCOME TYPE DETAILS EUR
101 Total wages 3500.00
404 Tax at source 1046.50
405 Tax at source deduction 510.00

• The payer receives the report reference generated by the Incomes Register
eca6e4076ed1403cae19f6c192eff5b8

At the end of March, when the work should end, the employer and employee agree that the person's employment will be continued until the end of the year. This means that the person will become a resident taxpayer retrospectively from the beginning of his work. The collected taxes at source must be changed to withholding. The withheld taxes are reported as the amounts in which the tax was collected from the income earner. The income earner still has a valid A1 certificate, i.e., he is not insured in Finland.

The employer submits a replacement report, leaving out the 'Non-resident taxpayer: Yes' entry from the report. As the 'Non-resident taxpayer' entry is not submitted in the replacement report, the income earner is considered to be a resident taxpayer. The data contents have no specific entry that could be used to separately confirm this. The checks related to the original report's 'Non-resident taxpayer' entry are removed after the entry is deleted. Thus, providing data such as the country code of the home country or the address in the home country is not necessary. It is recommended, however, that addresses be provided. Even then, a foreign Tax Identification Number must be submitted, if the person has one.

The payer must correct all reports, which it has submitted from January to March, using replacement reports (the March report is used as an example):

Example 6, table 2/2
REPLACEMENT REPORT
Type of action: Replacement report
Incomes Register report reference: eca6e4076ed1403cae19f6c192eff5b8
Payer's report reference: 20xx03171930
Report version number: 1 (complementary data)
PAY PERIOD
Payment date: 15.03.20xx
The start date of the pay period: 01.03.20xx
The end date of the pay period: 31.03.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Type of identifier: Tax Identification Number (TIN) ZZZZZZZZ (+ country code of the country that issued the TIN)
Type of exception to insurance: Not subject to Finnish social security (earnings-related pension, health, unemployment, or accident and occupational disease insurance)
Social security certificate: To Finland A1 certificate or agreement (complementary additional data)
Address in home country: Address in Germany (complementary additional data)
Address in the country of work: A temporary address in Finland (complementary additional data)
INCOME TYPE DETAILS EUR
101 Total wages 3500.00
402 Withholding tax 1046.50


Correcting international information is described in more detail in the instructions Reporting data to the Incomes Register: international situations.

2.2 Correcting payment errors

Payment errors are situations where the report as such is correct, but the amount of income paid was too small or too large. Payment errors can be corrected in several different ways, and it is not always necessary to submit a replacement report.

2.2.1 Amount of income paid was too small, corrected with an additional payment

If the income earner has been paid too little in wages – for example, payment of overtime compensation was forgotten – the original report is not corrected. In such a case, a new report is submitted for the date on which the forgotten payment is made.

Example 7: An amount of income paid to the income earner was too small, corrected with an additional payment.

When paying wages for April, an employer has paid EUR 3,000 in wages to an employee in an employment relationship valid until further notice and reported this to the Incomes Register:

Example 7, table 1/2
NEW REPORT
Type of action: New report
Payer's report reference: 20xx04300935
PAY PERIOD
Payment date: 30.04.20xx
The start date of the pay period: 01.04.20xx
The end date of the pay period: 30.04.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Occupational class: Statistics Finland's classification of occupations
Occupational class ID: NNNNN
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
Start date of the employment: 01.01.20xx
INCOME TYPE DETAILS EUR
201 Time-rate pay 3000.00
Earnings period: 01.04.–30.04.20xx*  
402 Withholding tax 750.00
413 Employee's earnings-related pension insurance contribution 214.50
414 Employee's unemployment insurance contribution 42.00

* The earnings period is voluntarily submitted, complementary additional data.

In the beginning of September, the employee notices that the employer forgot to pay him EUR 500 in overtime pay for overtime he worked in April. In connection with the payment of wages for September, the employer pays the missing amount in addition to the employee's normal wages, plus interest for the missing payment. The original report is not corrected.

Example 7, table 2/2
NEW REPORT
Type of action: New report
Payer's report reference: 20xx09301930
PAY PERIOD
Payment date: 30.09.20xx
The start date of the pay period: 01.09.20xx
The end date of the pay period: 30.09.20xx
REPORT (INCOME EARNER) DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Occupational class: Statistics Finland's classification of occupations
Occupational class ID: NNNNN
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
Start date of the employment: 01.01.20xx
INCOME TYPE DETAILS EUR
201 Time-rate pay 3000.00
Earnings period: 01.09.–30.09.20xx*  
235 Overtime compensation 500.00
Earnings period: 01.04.–30.04.20xx*  
332 Capital income payment 50.00
Earnings period: 01.04.–30.09.20xx*  
402 Withholding tax 875.00
413 Employee's earnings-related pension insurance contribution 250.25
414 Employee's unemployment insurance contribution 49.00

* The earnings period is voluntarily submitted, complementary additional data.

2.2.2 Amount of income paid was too large

Recovery and reporting of overpayments are described in Section 3 and Section 4.

2.2.3 Crediting an income earner for a collected reimbursement

In some situations, the payer may have collected reimbursement excessively – such as for a fringe benefit – from an income earner's income. Income types cannot be corrected in the Incomes Register using negative figures, i.e. figures with minus signs. Thus reimbursements collected from fringe benefits cannot be reported to the Incomes Register as negative figures.

A reimbursement collected from a fringe benefit reduces the income taxed as a fringe benefit as well as the income on which social insurance contributions are based. If an excessive reimbursement has been collected from an income earner for a fringe benefit, the simplest way is to collect a smaller reimbursement for the next pay period and report the collected smaller reimbursement to the Incomes Register. If this is no longer possible – for example, if the income earner is paid no more wages or fringe benefits from which the collected reimbursement could be reduced – the payer returns the extraneous reimbursement to the income earner. The amount returned to the income earner must be reported to the Incomes Register using some wage income type.

In some situations, however, the compensation paid to the income earner is not reported to the Incomes Register as taxable income. Instead, the payer must correct the submitted report and remove the excessive reimbursement collected. This must be done when, for example, the excessive reimbursement collected from the income earner's net wages does not reduce the taxable income or income subject to social insurance contributions, such as too high a garage fee or other such instalment collected from the net wages.

The same applies to situations where the fringe benefit and the reimbursement collected for the fringe benefit have been reported to the Incomes Register, and it is later discovered that the benefit was no longer available to the person. The payer must then correct the submitted report, removing the incorrect fringe benefit and collected reimbursement from the report. In such a case, the reimbursement returned to the income earner is not reported to the Incomes Register.

2.3 Correcting withheld tax

The amount of tax withheld may be incorrect, for example due to a calculation error or the use of an incorrect withholding percentage. Under certain conditions, the payer can correct the tax it withheld regardless of the reason for the error. The amount of tax withheld may be too large or too small.

2.3.1 Correcting tax withheld when the amount was too large

If the payer withheld too much tax, the error can be corrected by reducing the amount of tax withheld from a payment made later during the same calendar year (section19(1) of the prepayment act (ennakkoperintälaki 1118/1996)). This is the primary method to be used by payers when making corrections. A withholding may only be reported to the Incomes Register as a negative value when no further payments will be made to the income earner, thus making correcting impossible.

Example 8: Correcting too large an amount of tax withheld by withholding a lower amount of taxes at a later date.

On 30 August 2021, the income earner is paid EUR 3,000 in wages, with 25% (EUR 750) tax withheld. The payer inadvertently withheld too much tax. The correct amount was supposed to be 20%, or EUR 600.

The payer will take account of the extraneous amount withheld in connection with the next payment of wages in September. Without the correction, the amount of the withholding would be EUR 600 (20% from EUR 3,000). The payer takes account of the extraneous amount withheld in August (EUR 150), and only withholds the amount of EUR 450 (EUR 600 – EUR 150). The corrected amount is not reported as a negative value, but the correction is taken into account when determining the amount of withholding, and a lower amount is reported to the Incomes Register.

Correcting the withheld tax is voluntary to the payer, and the correction can be made regardless of the reason for the error. In recovery situations, however, it should be noted that if the payer collects the overpayment from the income earner’s net wages, withholding must be carried out based on the gross wages for the pay period in question. This means that you must not subtract the amount of the overpayment collected from the net wages from the amount of income subject to withholding. For more detail on this, see Section7 of the instructions Withholding tax (in Finnish)

The payer can correct tax withheld in too large an amount even when it no longer makes any payments to the income earner during the same calendar year. In such a case, the payer returns the extraneous amount withheld to the income earner and reports the amount returned to the Incomes Register. Based on this report, the Tax Administration will then lower the payer’s withholding obligation. The extraneous amount withheld must be returned during the same calendar year.

Example 9: Correcting too large an amount of tax withheld, error is corrected during the same calendar year.

On 30 August, the payer inadvertently withheld too much tax from a final payment made to the income earner (EUR 6,000). The withholding percentage was supposed to be 25% (EUR 1,500), but the payer inadvertently withheld tax using 35% (EUR 2,100). The information was reported to the Incomes Register according to the withheld amount.

The income earner notices the error at the beginning of the next month. The payer corrects its error and pays the extraneous amount withheld (EUR 600) to the income earner on 5 September. The extraneous amount withheld, paid to the income earner, can be reported to the Incomes Register as a negative number.

Example 9
NEW REPORT
Type of action: New report
Payer's report reference: 20xx05111234
PAY PERIOD
Payment date: 05.09.20xx
The start date of the pay period: 01.09.20xx
The end date of the pay period: 30.09.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
402 Withholding tax -600.00

Example 10: Too large an amount of tax withheld, error is detected after the end of the calendar year.

On 15 December, the payer inadvertently withheld too much tax from a final payment made to the income earner (EUR 4,000). The withholding percentage was supposed to be 25% (EUR 1,000), but the payer inadvertently withheld tax using 37.5 % (EUR 1,500). The data was reported to the Incomes Register according to the withheld amount.

The error is detected in the February of next year. The payer can no longer correct the error, because the calendar year has changed. The extraneous amount withheld is accredited to the income earner in taxation.

2.3.2 Correcting tax withheld when the amount was too small

If tax was not partially or entirely withheld, the payer can correct the error on its own initiative by increasing the tax withheld from a payment made later during the same calendar year. However, the withholding may not be increased by more than 10 per cent of the amount that would be otherwise paid that time, unless the recipient of the payment consents to a larger increase (section 19 of the prepayment act (ennakkoperintälaki 1118/1996)).

The payer reports the withholding to the Incomes Register in the amount in which it was withheld.

2.4 Reporting negative numbers

Typically, income types may not be corrected in the Incomes Register using negative numbers, i.e., numbers with a minus sign. An incorrectly reported or paid income is corrected by submitting a replacement report indicating the correct amount or changed nature of the income, for example the change of paid income to unjust enrichment. Furthermore, income recovery is reported as its own data group.

However, there are exceptional situations in the Incomes Register, where tax withheld, tax at source and social insurance contributions collected from an employee can be negative numbers. Tax withheld is not usually reported as a negative number. The amount of employee contributions, withheld tax and tax at source can often be corrected by collecting a lower amount of contributions and taxes from income paid to the income earner at a later date. This will eliminate the need to use negative numbers (see Section 4.2, Net recovery, and the examples described in the section).

Negative numbers may exceptionally appear when, for example, the employment has already ended and the amount of tax withheld or employee's social contributions collected is too large. The payer can correct tax withheld in too large an amount even when it no longer makes any payments to the income earner during the same calendar year. The payer will then return, for example, the excess amount of tax withheld, to the recipient, and report the returned amount as a negative number on the earnings payment report. The extraneous amount withheld must be returned before the end of the calendar year. The employee's social insurance contributions can be corrected in a corresponding way (for more details, see Correcting tax withheld in Section 2.3. and Correcting employee's social insurance contributions in Section 3.2.).

Items deducted from pay include the income types listed below, that can exceptionally be negative:

  • 402 Withholding tax
  • 404 Tax at source
  • 412 Employee's health insurance contribution
  • 413 Employee's pension insurance contribution
  • 414 Employee's unemployment insurance contribution

It should be noted that a recovered amount cannot be corrected by reporting a negative number for the original pay period, or by reducing the amount of income of the original pay period. Recovery is reported by submitting the Recovery data connected to the income type and the additional data related to the recovery during the pay period in which the income earner pays back the overpayment. The recovered amount must always be reported as a gross amount equal to the original overpayment. Data users use the Recovery data to reduce the amount of the person's income. Some data users subtract the amount of the payment already when the overpayment is detected and the income is reported as unjust enrichment.

2.5 Correcting data in two different reporting methods of monetary wages

At a minimum, the payer must report the wages paid as a total amount (the lower level of detail for reporting monetary wages, or the so-called reporting method 1). If the payer wishes, it can report wages it has paid more specifically than required by the mandatory reporting method, using the complementary income types intended for this purpose (the greater level of detail for reporting monetary wages, or the so-called reporting method 2). These two different reporting methods are described in the instructions Reporting data to the Incomes Register: monetary wages and items deducted from wages.

Reporting method 1 and reporting method 2 cannot be combined in the same report. However, the payer can use different reporting methods in different reports. When correcting a report, the payer may change the reporting method. Nothing prevents the payer from changing wages previously reported using reporting method 1, to wages reported using reporting method 2 in the replacement report, and vice versa. The payer must then ensure that the social insurance contributions are correctly reported in the replacement report, and that the default values of the income type insurance information are taken into account. However, the same income type and reporting method originally used to report the overpayment must be used when reporting unjust enrichment and recovery.

Example 11: Changing wages reported using reporting method 1 to reporting method 2.

The payer has paid EUR 2,400 of income to the income earner. The amount includes EUR 2,000 of time-rate pay and EUR 400 of notice period compensation. The notice period compensation is not subject to social insurance contributions.

The payer reports the data but incorrectly reports an amount as the notice period compensation that is EUR 100 too high:

Example 11, table 1/2
FIRST REPORT
Type of action: New report
Payer's report reference: 20xx05060920
PAY PERIOD
Payment date: 05.05.20xx
The start date of the pay period: 01.04.20xx
The end date of the pay period: 30.04.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-4321
INCOME TYPE DETAILS EUR
101 Total wages 2500.00

Type of insurance information:

Subject to social insurance contributions:

Grounds for insurance contribution: No
 
103 Total wages subject to social insurance contributions 2000.00
402 Withholding tax (from EUR 2,400) 480.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,000) 143.00
414 Employee's unemployment insurance contribution (from EUR 2,000) 28.00

Later the payer notices having erroneously reported the notice period compensation as too high by EUR 100. In reality the payment was EUR 400 instead of the reported EUR 500. The payer can correct the previously submitted report that used reporting method 1, so that the data is submitted according to reporting method 2. The income type Notice period compensation (208) is by default not subject to social insurance contributions.

The payer reports the following data:

Example 11, table 2/2
REPLACEMENT REPORT
Type of action: Replacement report
Payer's report reference: 20xx05060920
Report version number: 1 (complementary data)
PAY PERIOD
Payment date: 05.05.20xx
The start date of the pay period: 01.04.20xx
The end date of the pay period: 30.04.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-4321
INCOME TYPE DETAILS EUR
201 Time-rate pay 2000.00
208 Notice period compensation 400.00
402 Withholding tax (from EUR 2,400) 480.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,000) 143.00
414 Employee's unemployment insurance contribution (from EUR 2,000) 28.00

3 Reporting and retroactively correcting a payment made on incorrect grounds

All taxable monetary payments can become unjust enrichment if the income earners are not entitled to income paid to them. Income where the income earner has been paid too much is corrected by submitting the correct amount of income on a replacement report and marking the overpayment as unjust enrichment. Unjust enrichment is discussed in Section 3.1.

However, if the payer and the income earner agree that the overpayment will be offset from a payment to be made later (i.e. treating the overpayment as advance pay), the payer does not correct the earlier overpayment into unjust enrichment. Offsetting from wages and the advance pay treatment are described in Section 4.8.

The Unjust enrichment entry cannot be used for some of the income types used in the Incomes Register due to the nature of the income. These include non-monetary benefits, such as fringe benefits. Fringe benefits have a specific value based on a decision of the Finnish Tax Administration, and if the payer has reported an incorrect value, it must correct the amount of payment on a replacement report without the Unjust enrichment entry. Information corrected for the original pay period without the Unjust enrichment entry is discussed in Section 3.1.3.

There are also some income types that are corrected on the next report. These income types are also discussed in Section 3.1.3.

Some of the Incomes Register's data users process the overpayment using the report concerning the unjust enrichment and some process it when the income is recovered. For this reason, the payer must always correct the original payment into an unjust enrichment and report the recovery information when the income has been recovered. It is not possible to only submit a report on the recovery. Instead, the information in the original report must always be corrected into an unjust enrichment. If the overpayment was made prior to 2019, the annual information returns must be corrected. When recovering overpayments made prior to 2019, only information of the recovery is reported to the Incomes Register.

3.1 Unjust enrichment

In some situations, the income earner is not entitled to a payment made to them and reported in the Incomes Register. An unjust enrichment occurs when, for example, a payment has been made on incorrect grounds, to the wrong person, or in an incorrect amount.

Unjust enrichment must be reported without undue delay and no later than within one month of becoming aware of the unjust enrichment.

Unjust enrichment is reported when the payer separately collects an overpayment from the income earner. If an overpayment is corrected in the following wage payments as advance pay deducted from the gross pay or as some other such payment, the information can, in principle, be corrected by later reporting to the Incomes Register only the gross amount actually paid to the income earner, from which the advance payment has been deducted (see 4.8. Treating an overpayment as advance pay). It should be noted, however, that handling overpayment as advance pay is not recommended, because this can distort the amount of benefits paid to the income earner or, at worst, affect eligibility for the benefit in the first place. If the overpayment is set off from the gross wages, some data users may have to separately request information on the incorrectly paid amounts. Furthermore, the wrong income will be used as the grounds for benefits.

Unjust enrichment must always be reported when the payment of the unjust enrichment leads to its being separately recovered from the income earner. It is also recommended that unjust enrichment be reported on every occasion when the overpayment cannot be fully corrected in the next payment of wages.

Unjust enrichment paid to an income earner is taxable income, but it is not income on which pension is based. For this reason, it must be possible to identify such payments in pension provision, regardless of whether or not the payer has recovered them from the income earner. Correspondingly, unjust enrichment is not subject to any other social insurance contributions, such as health, unemployment, or accident and occupational disease insurance contributions.

The payment can be recovered from the gross amount (so-called offsetting from wages), the net wages paid to the income earner (gross or net amount recovery), or the income earner can be sent a payment request (gross or net recovery). Sometimes, the overpayment can be subject to a dispute, or the regulations of the Employment Contracts Act or the collective labour agreement may prevent the recovery of the overpayment. In this case, too, the overpayment must be reported to the Incomes Register. Recovery is discussed in Section 4.

Unjust enrichment is reported in two different ways, depending on whether the income was already reported to the Incomes Register as some other type of income, or whether the unjust enrichment paid is noticed before the report is submitted.

3.1.1 The overpayment is noticed before the report is submitted

If the overpayment is noticed before the report is submitted, use the separate Unjust enrichment income type. This income type is used only when the mistakenly made payment is detected before the first report is submitted, and the income has not previously been reported to the Incomes Register as other income.

Example 12: An overpayment is noticed before the report is submitted.

A payment of EUR 2,500 intended for income earner Y has been mistakenly paid to X. The mistake is noticed on the very next day, before the report has been submitted to the Incomes Register. The income has not been recovered from X. The payer reports:

Example 12
NEW REPORT
Type of action: New report
Payer's report reference: 20xx03040950
PAY PERIOD
Payment date: 03.03.20xx
The start date of the pay period: 01.02.20xx
The end date of the pay period: 28.02.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-4321 (X)
INCOME TYPE DETAILS EUR
359 Unjust enrichment 2500.00

Example 13: An overpayment is noticed before the report is submitted, other income is also paid to the income earner at the same time.

The amount of the income earner’s normal monthly pay is EUR 3,100. During the payment of wages, the payer has mistakenly paid EUR 900 too much to the income earner (EUR 4,000 gross). 25% tax has been withheld and the employee's social insurance contributions have been collected from the income.

The payer notices the mistake on the next day, before submitting the report to the Incomes Register. The tax withheld is reported in the amount withheld in the earnings payment report. However, the payer may correct the employee's social insurance contributions to match the correct amount of pay (see information on correcting an employee's social insurance contributions in Section 3.2).

Example 13
NEW REPORT
Type of action: New report
Payer's report reference: 20xx03040950
PAY PERIOD
Payment date: 12.06.20xx
The start date of the pay period: 01.06.20xx
The end date of the pay period: 15.06.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-4321 (X)
INCOME TYPE DETAILS EUR
359 Unjust enrichment 900.00
201 Time-rate pay 3100.00
402 Withholding tax (from EUR 4,000) 1000.00
413 Employee's earnings-related pension insurance contribution (from EUR 3,100) 221.65
414 Employee's unemployment insurance contribution (from EUR 3,100) 43.40

3.1.2 Overpayment has already been reported to the Incomes Register

Overpayments are usually noticed later, once the income has already been reported to the Incomes Register as some other type of income. In such a case, the original report is corrected using the replacement method. If the unjust enrichment has previously been incorrectly reported to the Incomes Register as some other income, the information must be corrected by submitting

  • the previously reported income type (for example, 'Time-rate pay'), and
  • submitting the separate 'Unjust enrichment' information in connection with it.

The separate 'Unjust enrichment' income type is not used in this case; instead, the separate 'Unjust enrichment' information connected to the income type is added to the previously reported payment.

Example 14: An overpayment is noticed after the report has been submitted.

Income earner Z was paid EUR 5,000 on 15 September. The payment was reported to the Incomes Register as time-rate pay.

However, the employer accidentally paid EUR 2,000 too much in addition to Z's normal wages, EUR 3,000. Tax has been withheld (25%) from the payment made (EUR 5,000) in the normal manner, and the employee's earnings-related pension and unemployment insurance contributions have been collected from the income earner.

The employer submits the report in accordance to what was paid and does not notice the mistake before submitting the report.

Example 14, table 1/2
FIRST REPORT BEFORE THE ERROR IS DETECTED
Type of action: New report
Payer's report reference: 20xx09161955
PAY PERIOD
Payment date: 15.09.20xx
The start date of the pay period: 01.09.20xx
The end date of the pay period: 30.09.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 5000.00
Earnings period: 10.08.20xx–31.08.20xx*  
402 Withholding tax (from EUR 5,000) 1250.00
413 Employee's earnings-related pension insurance contribution (from EUR 5,000) 357.50
414 Employee's unemployment insurance contribution (from EUR 5,000) 70.00

* The earnings period is voluntarily submitted complementary additional data.

The overpayment is detected in October. The previously submitted incorrect report must be corrected by submitting a replacement report and marking the overpayment (previously paid and reported to the Incomes Register with the 'Time-rate pay' income type) as an 'Unjust enrichment'. Because the income was already reported to the Incomes Register as another income type, the 'Unjust enrichment' income type is not used; instead, a separate 'Unjust enrichment' entry connected to the income type is made for the previously reported income. The amount of pay is corrected in the report.

Example 14, table 2/2
REPLACEMENT REPORT
Type of action: Replacement report
Payer's report reference: 20xx09161955
Report version number: 1 (complementary data)
PAY PERIOD
Payment date: 15.09.20xx
The start date of the pay period: 01.09.20xx
The end date of the pay period: 30.09.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 3000.00
Earnings period: 10.08.20xx–31.08.20xx*  
201 Time-rate pay 2000.00
Unjust enrichment: Yes  
Earnings period: 10.08.20xx–31.08.20xx*  
402 Withholding tax (from EUR 5,000) 1250.00
413 Employee's earnings-related pension insurance contribution (from EUR 3,000) 214.50
414 Employee's unemployment insurance contribution (from EUR 3,000) 42.00

* The earnings period is voluntarily submitted complementary additional data.

Based on the submitted data, the income earner's income subject to social insurance contributions for September is considered to be EUR 3,000 and the erroneous overpayment (EUR 2,000) changes into an unjust enrichment. The payment obligation of the employer's social insurance contributions is correspondingly reduced. Based on the submitted data, the data users are notified that the income was previously reported to the Incomes Register as time-rate pay.

The tax withheld from the income earner is reported in a replacement report, in the amount in which it was withheld from the income earner. The employee's social insurance contributions should have been collected based on EUR 3,000. The payer can correct the social insurance contributions collected from the employee to the right amount (calculated based on EUR 3,000 of time-rate pay) using a replacement report submitted for an unjust enrichment. If this is not done, the employee's social insurance contributions can be corrected using a recovery report (see information on how to correct employee corrections in Section 3.2).

The payer must remember to correct the information on the employer's separate report for the month in question, if the amount of health insurance contribution paid changes due to the unjust enrichment (see Section 7 and the examples in it).

With respect to correcting the report, it does not matter whether the entire payment made, or only part of it, is changed into an unjust enrichment. If the entire payment is changed into an unjust enrichment, the payer corrects the previous report using a replacement report.

Example 15: The entire income paid to the income earner is changed into an unjust enrichment.

The payer has paid EUR 2,670 of wages to the income earner. It is later noticed that the income earner was on an unpaid vacation for the entire pay period. The entire payment made must be corrected and changed into an unjust enrichment.

Example 15, table 1/2
FIRST REPORT BEFORE THE ERROR IS DETECTED
Type of action: New report
Payer's report reference: 20xx09161955
PAY PERIOD
Payment date: 15.11.20xx
The start date of the pay period: 01.11.20xx
The end date of the pay period: 30.11.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 2670.00
Earnings period: 01.10.20xx–31.10.20xx  
402 Withholding tax (from EUR 2,670) 507.30
413 Employee's earnings-related pension insurance contribution (from EUR 2,670) 190.90
414 Employee's unemployment insurance contribution (from EUR 2,670) 37.38

The payer corrects the incorrect information submitted using a replacement report:

Example 15, table 2/2
REPLACEMENT REPORT
Type of action: Replacement report
Payer's report reference: 20xx09161955
Report version number: 1 (complementary data)
PAY PERIOD
Payment date: 15.11.20xx
The start date of the pay period: 01.11.20xx
The end date of the pay period: 30.11.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 2670.00
Unjust enrichment: Yes  
Earnings period: 01.10.20xx–31.10.20xx*  
402 Withholding tax (from EUR 2,670) 507.30

Because the entire payment was groundless, the income from work on which pension and unemployment insurance contributions are based is correspondingly reduced for the income earner. The payer can thus correct the collected employee contributions by submitting a replacement report. Correcting employee contributions is discussed in more detail in Section 3.2.

* The earnings period is voluntarily submitted complementary additional data.

With respect to correcting the report, it does not matter whether the information was reported to the Incomes Register using reporting method 1 for monetary wages (the so-called lower level of detail for reporting monetary wages) or reporting method 2 (the greater level of detail for reporting monetary wages). The correction procedure is the same, no matter which method was used to report the information.

When using reporting method 1, you must also remember to report the income subtypes connected to the income according to the actual situation, if the income subject to social insurance contributions differs from the income reported using the 'Total wages' income type.

Example 16: Reporting an unjust enrichment using reporting method 1.

An income earner was paid EUR 2,700 in wages for December on 15 December. The payment was reported to the Incomes Register using the 'Total wages' income type. Tax has been withheld (25%) from the payment made (EUR 2,700) in the normal manner, and the employee's earnings-related pension and unemployment insurance contributions have been collected from the income earner.

However, the employee was on unpaid vacation for part of December, due to which the employer paid EUR 900 too much in wages.

The employer is unaware of the unpaid absence before submitting the report, and submits the report according to what was paid.

Example 16, table 1/2
FIRST, INCORRECT REPORT
Type of action: New report
Payer's report reference: 14xx08161955
PAY PERIOD
Payment date: 15.12.20xx
The start date of the pay period: 01.12.20xx
The end date of the pay period: 31.12.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
101 Total wages 2700.00
402 Withholding tax (from EUR 2,700) 675.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,700) 193.05
414 Employee's unemployment insurance contribution (from EUR 2,700) 37.80

The overpayment (EUR 900) is noticed at the end of the month. The previously submitted report must be corrected using a replacement report, by marking the overpayment reported to the Incomes Register with the 'Total wages' income type as an unjust enrichment in the overpayment amount. The amount of wages is corrected using a replacement report.

Example 16, table 2/2
REPLACEMENT REPORT
Type of action: Replacement report
Payer's report reference: 14xx08161955
Report version number: 1 (complementary data)
PAY PERIOD
Payment date: 15.12.20xx
The start date of the pay period: 01.12.20xx
The end date of the pay period: 31.12.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOMETYPE DETAILS EUR
101 Total wages 1800.00
101 Total wages 900.00
Unjust enrichment: Yes  
402 Withholding tax (from EUR 2,700) 675.00
413 Employee's earnings-related pension insurance contribution (from EUR 1,800) 128.70
414 Employee's unemployment insurance contribution (from EUR 1,800) 25.20

Correcting employee contributions is discussed in more detail in Section 3.2.

If the amount of wages paid includes income items that are not subject to social insurance contributions, any correction of a report submitted using reporting method 1 must also include the income subtypes in the report (such as the amount of wages subject to the employee's social insurance contributions) according to the actual situation. Correspondingly, you must remember to report the Type of insurance information data connected to the income type according to the actual situation.

Example 17: Reporting an unjust enrichment using reporting method 1, when some of the income is not subject to social insurance contributions.

The income earner was paid EUR 5,000 on 10 August. The payment was reported to the Incomes Register using the 'Total wages' income type. The payment includes EUR 1,000 of waiting time compensation, which is not subject to social insurance contributions.

However, the employer inadvertently paid EUR 800 too much in waiting time compensation. Tax has been withheld (25%) from the payment made (EUR 5,000) in the normal manner, and the employee's earnings-related pension and unemployment insurance contributions (from EUR 4,000) have been collected from the income earner.

The employer does not notice the error before submitting the report, and submits the report according to what was paid.

Example 17, table 1/2
FIRST, INCORRECT REPORT BEFORE THE ERROR IS DETECTED
Type of action: New report
Payer's report reference: 14xx08161955
PAY PERIOD
Payment date: 10.08.20xx
The start date of the pay period: 01.08.20xx
The end date of the pay period: 31.08.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
101 Total wages 5000.00

Type of insurance information:

Subject to social insurance contributions:

Grounds for insurance contribution: No
 
103 Total wages subject to social insurance contributions 4000.00
402 Withholding tax (from EUR 5,000) 1250.00
413 Employee's earnings-related pension insurance contribution (from EUR 4,000) 286.00
414 Employee's unemployment insurance contribution (from EUR 4,000) 56.00

The overpayment (EUR 800) is noticed in September. The previously submitted report must be corrected using the replacement method by marking the overpayment (previously paid and reported to the Incomes Register with the 'Time-rate pay' income type) as an unjust enrichment. The income subtype connected to the total amount must be reported on the replacement report according to the actual situation.

The waiting time compensation (EUR 800) that was an overpayment must be reported to the Incomes Register as an unjust enrichment. Correspondingly, the reduced income amount (EUR 4,200) is reported to the Incomes Register in the correct amount. The correct amount of waiting time compensation is EUR 200, and the amount of pay subject to social insurance contributions remains at EUR 4,000. You must also remember to report this to the Incomes Register using the correct income type.

In the replacement report used to report the unjust enrichment, you must remember to also provide the Type of insurance information data according to the actual situation for the income reported as an unjust enrichment.

Example 17, table 2/2
REPLACEMENT REPORT
Type of action: Replacement report
Payer's report reference: 14xx08161955
Report version number: 1 (complementary data)
PAY PERIOD
Payment date: 10.08.20xx
The start date of the pay period: 01.08.20xx
The end date of the pay period: 31.08.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
101 Total wages 4200.00

Type of insurance information:

Subject to social insurance contributions:

Grounds for insurance contribution: No
 
101 Total wages 800.00

Type of insurance information:

Subject to social insurance contributions:

Grounds for insurance contribution: No
 
Unjust enrichment: Yes  
103 Total wages subject to social insurance contributions 4000.00
402 Withholding tax (from EUR 5,000) 1250.00
413 Employee's earnings-related pension insurance contribution (from EUR 4,000) 286.00

414 Employee's unemployment insurance contribution (from EUR 4,000)

56.00

Example 18: Reporting an unjust enrichment using reporting method1, when the overpayment is subject to social insurance contributions but some of the income paid is not subject to social insurance contributions.

The income earner has been paid EUR 2,500. The payment was reported to the Incomes Register using the ‘Total wages’ income type. The payment includes EUR 500 of notice period compensation, which is not subject to social insurance contributions.

Later, the payer notices having paid EUR 200 too much in wages. The amount of the notice period compensation was correct. Tax has been withheld (25%) from the payment made (EUR2,500) in the normal manner, and the employee’s earnings-related pension and unemployment insurance contributions have been collected (from EUR2,000) from the income earner.

The employer does not notice the error before submitting the report, and submits the report according to what was paid.

Example 18, table 1/2
FIRST REPORT BEFORE THE ERROR IS DETECTED
Type of action: New report
Payer's report reference: 20xx01061955
PAY PERIOD
Payment date: 30.06.20xx
The start date of the pay period: 01.06.20xx
The end date of the pay period: 15.06.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
101 Total wages 2500.00

Type of insurance information:
Subject to social insurance contributions
Grounds for insurance contribution: No

 
103 Total wages subject to social insurance contributions 2000.00
402 Withholding tax (from EUR 2,500) 625.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,000) 143.00
414 Employee's unemployment insurance contribution (from EUR 2,000) 28.00

The payer must correct the submitted report after noticing the error. The payer must report the overpayment of EUR 200 as an unjust enrichment and correct the amount of pay to EUR 2,300. Correspondingly, the pay subject to social insurance contributions is reduced to EUR 1,800 (2,300–500).

In the replacement report used to report the unjust enrichment, you must remember to also provide the Type of insurance information data according to the actual situation for the income reported as an unjust enrichment.

Example 18, table 2/2
REPLACEMENT REPORT
Type of action: Replacement report
Payer's report reference: 20xx09161955
Report version number: 1 (complementary data)
PAY PERIOD
Payment date: 30.06.20xx
The start date of the pay period: 01.06.20xx
The end date of the pay period: 15.06.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
101 Total wages 2300.00

Type of insurance information:
Subject to social insurance contributions
Grounds for insurance contribution: No

 
101 Total wages 200.00

Type of insurance information:
Subject to social insurance contributions
Grounds for insurance contribution: No

 
Unjust enrichment: Yes  
103 Total wages subject to social insurance contributions 1800.00
103 Total wages subject to social insurance contributions 200.00
Unjust enrichment: Yes  
402 Withholding tax (from EUR 2,500) 625.00
413 Employee's earnings-related pension insurance contribution (from EUR 1,800) 128.70
414 Employee's unemployment insurance contribution (from EUR 1,800) 25.20

The tax withheld is reported as the amount withheld. The payer can correct the social insurance contributions collected from the employee to the right amount (calculated based on EUR 1,800) using a replacement report submitted for an unjust enrichment. If the payer does not do this, employee contributions can be corrected to match the correct amount using the report on which the recovery of the income is reported. Correcting employee contributions is discussed in Section 3.2.

Example 19: Reporting an unjust enrichment using reporting method 1, when the overpayment is subject to social insurance contributions but some of the income paid is not subject to social insurance contributions.

The income earner has been paid EUR 5,400. The payment was reported to the Incomes Register using the 'Total wages' income type. The payment includes EUR 600 of voluntary compensation in a situation where employment is terminated, which is not subject to social insurance contributions. Tax has been withheld (30%) from the payment made (EUR 5,400) in the normal manner, and the employee's earnings-related pension and unemployment insurance contributions have been collected (from EUR 4,800) from the income earner.

Later, the payer notices having paid EUR 800 too much in wages. The amount of compensation paid in a situation where employment is terminated was correct.

The employer does not notice the error before submitting the report, and submits the report according to what was paid.

Example 19, table 1/2
FIRST REPORT BEFORE THE ERROR IS DETECTED
Type of action: New report
Payer's report reference: 20xx01061955
PAY PERIOD
Payment date: 20.05.20xx
The start date of the pay period: 01.05.20xx
The end date of the pay period: 15.05.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
101 Total wages 5400.00

Type of insurance information:
Subject to social insurance contributions:
Grounds for insurance contribution: No

 
103 Total wages subject to social insurance contributions 4800.00
402 Withholding tax (from EUR 5,400) 1620.00
413 Employee's earnings-related pension insurance contribution (from EUR 4,800) 386.10
414 Employee's unemployment insurance contribution (from EUR 4,800) 67.20

The payer must correct the submitted report after noticing the error, and correct the EUR 800 overpayment, changing it to an unjust enrichment. Correspondingly, the payer must remember to also correct the income subtype included in the report.

Example 19, table 2/2
REPLACEMENT REPORT
Type of action: Replacement report
Payer's report reference: 20xx09161955
Report version number: 1 (complementary data)
PAY PERIOD
Payment date: 20.05.20xx
The start date of the pay period: 01.05.20xx
The end date of the pay period: 15.05.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
101 Total wages 4600.00

Type of insurance information:
Subject to social insurance contributions
Grounds for insurance contribution: No

 
101 Total wages 800.00

Type of insurance information:
Subject to social insurance contributions
Grounds for insurance contribution: No

 
Unjust enrichment: Yes  
103 Total wages subject to social insurance contributions 4000.00
103 Total wages subject to social insurance contributions 800.00
Unjust enrichment: Yes  
402 Withholding tax (from EUR 5,400) 1620.00
413 Employee's earnings-related pension insurance contribution (from EUR 4,000) 286.00
414 Employee's unemployment insurance contribution (from EUR 4,000) 56.00

3.1.3 When is information corrected for the original period without the Unjust enrichment entry?

Series 300 income types that are not income actually paid to the income earner are corrected for the original pay period by reporting the correct amount of the income without the Unjust enrichment entry. These income types include:

    • Income types of payments made by a substitute payer but reported by the actual employer (code values 321–325): If the substitute payer has made an overpayment to an income earner, the substitute payer corrects the report it submitted and marks the overpayment as unjust enrichment. The actual employer must then correct the report it has submitted and report the correct amount of income without including the Unjust enrichment entry.
    • Fringe benefits and non-monetary benefits and payments: (code values 301, 302, 304, 317, 330, 334, 341, 342): Fringe benefits cannot be unjust enrichment, because the person has enjoyed the benefit and it is not a case of payment error (overpayment). The payment may have been reported incorrectly to the Incomes Register, but in any case, the income earner has enjoyed the benefit in the correct amount. The incorrect report is then corrected by reporting the correct value on a replacement report without including the Unjust enrichment entry.
    • Treatment fee for municipal veterinarian (code value 312) and
    • Wages for insurance purposes (code value 352): The treatment fee for a municipal veterinarian and wages for insurance purposes are not money actually paid to the income earner, and cannot thus be overpayments for which the Unjust enrichment entry could be made. If the data has been incorrectly reported to the Incomes Register, it must be corrected by reporting the correct amount of income on a replacement report without including the Unjust enrichment entry.
    • Other payments of a nature that cannot involve unjust enrichment are Employee stock option (code value 343) and Employee stock option with a subscription price lower than market price at the time of issue (code value 361).
    • In addition to the non-monetary benefits mentioned above, Tax-exempt reimbursement of expenses (code values 303, 311, 331, 357, 358) cannot in principle be unjust enrichment. A reimbursement of expenses in itself cannot be unjust enrichment, but in cases of payment exceeding the values specified in the decision of the Finnish Tax Administration on tax-exempt travel allowances, it can change into a different income type (such as wages) that can be unjust enrichment. If reimbursement of expenses are paid to an income earner in excess of the values confirmed in the decision of the Finnish Tax Administration, the report must be corrected using the replacement method by marking the overpayment as taxable income (e.g. as wages, which can be unjust enrichment).

Example: An income earner has been paid a tax-exempt daily allowance of EUR 43 per day for 5 days, or EUR 215 in total. She should only have been paid for 3 days, i.e., she was paid EUR 86 too much. The correct amount, EUR 129, must be reported as tax-exempt daily allowances on a replacement report. The rest is an overpayment (unjust enrichment). Because Daily allowance is a tax-exempt income type and the groundlessly made overpayment is taxable income, the overpayment must be reported using one of the taxable income types, such as Time-rate pay - Unjust enrichment. Although the wages subject to withholding increase on the replacement report, the withholding is reported as the amount actually withheld, as are the employee's earnings-related pension and unemployment insurance contributions. In this case, the amount of the employer's health insurance contribution does not change, which means that the employer's separate report does not need to be corrected. A reimbursement of expenses in itself cannot therefore be unjust enrichment, but in cases of payment exceeding the values specified in the decision of the Finnish Tax Administration, it changes into a different income type (wages) that can be unjust enrichment.

The Unjust enrichment entry cannot easily be used for the items deducted from income and other payments of the 400 series income types, such as withholding, distraint, or reimbursements collected for fringe benefits. Even if the employer has collected a reimbursement for a fringe benefit that exceeds the taxable value of the fringe benefit, the maximum amount reported in an earnings payment report as the reimbursement collected for a fringe benefit is the taxable value. However, the reimbursement collected for a fringe benefit must be reported in the same earnings payment report as the fringe benefit, even if the reimbursement was collected beforehand or afterwards. Taxes withheld and taxes at source collected are reported as the actual amounts withheld or collected, and if the payer needs to correct the amounts, the corrected amounts are reported once the corrections have been made. Also see the instructions in Section2.2.3, Crediting an income earner for a collected reimbursement.

The income types and their descriptions can be found on the page Wage income types and in the Wages – Descriptions of income types and items deducted from income document.

3.2 Correcting employee's social insurance contributions

Employee's earnings-related pension and unemployment insurance contributions are corrected in a different way than withholding, tax at source and the employee's health insurance contribution. The recommendation is to correct employee's earnings-related pension and unemployment insurance contributions on the same report on which unjust enrichment is reported, even if the employee contributions have not yet actually been credited to the income earner.

If the employee's earnings-related pension and unemployment insurance contributions have already been corrected on the unjust enrichment report, the crediting or reduction is not reported again to the Incomes Register when the payer credits the amount to the income earner.

An alternative method for correcting an employee's earnings-related pension and unemployment insurance contributions is to correct them on the report on which the recovery of the unjust enrichment is reported.

The correction of an employee's health insurance contribution is described in Section 3.2.2. The correction of withholding is described in Section 2.3.

Correcting a collected contribution when the amount was too large

If an employee’s earnings-related pension or unemployment insurance contribution that is too large has been collected from an employee, the employer can pay back the extraneous amount collected, or correspondingly reduce the income earner’s employee contributions for a later pay period. This can occur, for example, in recovery situations or because the income changes to a type that does not constitute grounds for social insurance contributions.

Generally speaking, corrections to an employee’s earnings-related pension insurance and unemployment insurance contributions are reported in the report for the pay period during which the income is corrected, for example in the report used to correct the overpayment and change it into an unjust enrichment. The same calculation bases are used in the replacement report as in the original report, for example, the original contribution percentage.

An employee’s earnings-related pension insurance and unemployment insurance contributions can also be corrected in the report used to report the recovery of the overpayment, i.e., in the report submitted once the income earner has paid back the overpayment. This is only possible if the contributions are corrected during the same calendar year. If the correction is made after the calendar year in question, the employee contributions must be corrected by reporting an unjust enrichment.

It is recommended that an employee’s earnings-related pension insurance and unemployment insurance contributions be corrected in the report in which the unjust enrichment is reported. The reporting of unjust enrichment is described in more detail (with examples) in Section3.1 Unjust enrichment. Correcting employee’s earnings-related pension insurance and unemployment insurance contributions is described in Examples11 and 12.

If an employee contribution considered too large that has been collected cannot be subtracted from the income earner’s employee contributions for a later pay period, and the payer has not already reduced the amount in the report submitted for unjust enrichment or in the recovery report, the excessive amount collected can be paid back to the income earner and the amount can be reported as a negative value in an earnings payment report. This is only possible if the contributions are corrected during the same calendar year.

Example 20: Returning an employee contribution, when the collected amount was too large.

The payer has erroneously collected an earnings-related pension insurance contribution that was EUR 43 too high from the income earner's pay. No more payments will be made to the income earner, so the employer returns the excess amount of collected earnings-related pension insurance contribution to the income earner, and reports the amount returned to the income earner to the Incomes Register:

Example 20
NEW REPORT
Type of action: New report
Payer's report reference: 20xx05111234
PAY PERIOD
Payment date: 05.09.20xx
The start date of the pay period: 01.09.20xx
The end date of the pay period: 30.09.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
413 Employee's earnings-related pension insurance contribution -43.00

Correcting a collected contribution when the amount was too small

In some situations, the law prevents the employer from collecting overly small contributions from the income earner in later wage payments. For example, if an employee's earnings-related pension insurance or unemployment insurance contribution has not been collected due to an obvious error during the payment of wages, the employer can collect the uncollected contribution during the next two wage payments, but not after that.

In situations requiring correction, the payer reports the amount collected from the income earner to the Incomes Register on the report for the pay period during which the payer collects the increased employee contribution.

Correcting a submitted report when the lower limit for earnings-related pension insurance is exceeded during the same month is described in Section 6.3 Correcting Exception to insurance information.

3.2.2 Correcting employee's health insurance contributions

When the income earner is a resident taxpayer, the employee's health insurance contribution is always included in the tax withholding. For this reason, in general the health insurance contribution of an income earner who is a resident taxpayer is not separately reported to the Incomes Register.

If an employee who is a non-resident taxpayer is covered by the Finnish social security, the health insurance contribution of a non-resident taxpayer must be collected separately in addition to tax at source, unless the non-resident taxpayer wishes to be taxed in accordance with the tax procedure act (laki verotusmenettelystä 1558/1995), in which case the health insurance contribution is included in the withholding tax or prepayment of tax. If the health insurance contribution has been collected separately and the paid income or part of it changes to an unjust enrichment, the health insurance contribution is corrected in the same report in which the recovery of the income is reported. Unlike in the correction of an employee's earnings-related pension insurance and unemployment insurance contributions, the health insurance contribution cannot be corrected until the income has been recovered.

The instructions Reporting data to the Incomes Register: international situations describe the information correction procedure when tax at source and health insurance contributions have been collected from an income earner who is a non-resident taxpayer, but the income earner becomes a resident taxpayer, in which case the information previously reported as tax at source and the employee's health insurance contribution is reported as tax withheld using a replacement report.

4 Recovery of a payment

4.1 General information on the recovery of wages and other payments

When the income earner pays back a mistakenly paid unjust enrichment or other payment to the payer, the payback must be reported to the Incomes Register. The recovered amount is not corrected on the original report; the recovered amount is reported during the pay period in which the income is recovered. 'Action type' is 'New report'.

The following information is provided for the recovered income:

  • Income type
  • Recovery – Yes
  • Recovered amount
  • Recovery date
  • Withholding from the recovered amount (if net recovery) or tax at source from the recovered amount (if net recovery)
  • Original pay period

Additionally, the following information on the recovered income can be provided as complementary additional data:

  • Earnings period of the recovered income
  • Original payment date

The ‘Recovery’ entry data must be used for the same income type the payer used when reporting the income as an unjust enrichment. However, the overpayment can be recovered from other income paid to the person (see Example24).

The ‘Original pay period’ to be reported in ‘Additional recovery details’ is the pay period during which the payment subject to recovery was originally paid to the income earner.

The payment can be recovered as a gross amount (gross recovery) or as a net amount (net recovery).

The most common methods of recovery are:

  • the overpayment is recovered from the income earner’s net wages;
  • an invoice is sent to the income earner, who pays it;
  • the overpayment is set off from a later payment made to the income earner, for example by reducing the amount of gross wages (‘offsetting’, i.e. treating the overpayment as advance pay, which is not recommended).

If the payment can be recovered in enforcement proceedings, the recovered amount reported should only include the overpayment, excluding any interest. The recovery is reported once the enforcement authority has paid the recovered amount to the payer.

Each data user has independently defined how they use data disclosed to them from the Incomes Register in their internal processes. Some data users take note of the report on an unjust enrichment due to an overpayment and ignore the subsequent recovery report, while for other data users, the recovery report is important. To ensure that all data users can correctly obtain the data they require from the Incomes Register, the details of the overpayment must be correctly reported: the overpayment must be corrected to an unjust enrichment and the repayment of the overpayment must be separately reported.

This section uses examples to describe how the information is reported to the Incomes Register, if the payment is recovered as a gross or net amount. The section also includes a description of how to report when the overpayment is handled as advance pay paid to the income earner.

4.2 Net recovery

‘Net recovery’ means that the payer recovers the overpayment from which it has first deducted the share of tax withholding or tax at source from the income earner. The Tax Administration takes into account the withholding or tax at source in the payer’s obligations.

If the recovery is carried out as a net amount, the tax withheld from the amount recovered from the employee should only reported in ‘Additional recovery details’ under ‘Withholding from the recovered amount’. A withholding may not be reported as a negative value. The amount of withholding reported here is taken into account in the payer’s withholding obligation for the original wage payment month. Tax at source on the recovered amount is reported correspondingly if tax at source was originally collected from the overpayment and the income is recovered as a net amount.

The income can be recovered from the income earner as a net amount if the income is repaid during the same year or at the beginning of the following year by the date defined in the Finnish Tax Administration’s decision (presently 30April). After this date, the recovery must be carried out using the gross recovery method.

The Tax Administration will establish the time limit in its decision on the repayment due date of recovered income in the payer’s taxation. The decision is based on the act on assessment procedure for self-assessed taxes (laki oma-aloitteisten verojen verotusmenettelystä 768/2016, section51(5)), which lays down provisions on the adjustment of the payer’s obligations. The taxation of the payer’s tax period is not adjusted if the payment recipient repays income received in a previous year to the payer so late that the withholding or tax at source collected from the income has already been taken into consideration in the payment recipient’s taxation. Thus, the due date established by the Tax Administration effectively determines the time limit by which the payer can recover the payment using the net recovery method. The decision will be applied for the first time to withholding and tax at source collected from payments repaid on or after the date the act came into force.

When the income is recovered as a net amount, and the tax withheld from the recovered amount is reported in ‘Additional recovery details’ under ‘Withholding from the recovered amount’, the tax withholding amount that is the payer’s employer obligation for the original payment period is reduced. Additionally, based on the information in question, the Tax Administration will also correspondingly reduce the amount of tax withholding previously accredited to the income earner. Tax withheld from the recovered income is reported as the amount originally withheld from the overpayment. Even a change in the tax withholding percentage after the overpayment does not affect this. Tax at source on the recovered amount is reported correspondingly if tax at source was originally collected from the overpayment and the income is recovered as a net amount.

Even if the income is recovered as a net amount, the recovered overpayment is reported to the Incomes Register as the amount of the original overpayment, i.e. as the gross amount. If the payment is recovered in several instalments, the payer reports the part of income recovered at each time and includes the recovery data (see Section4.5). Tax withheld from the recovered amount is reported as separate information, and tax withholding is not deducted from the amount of the recovered income.

Example 21: Overpayment is recovered as a net amount; other income is not paid to the income earner at the same time.

In November (10 November), the income earner pays back a EUR 2,000 overpayment paid to her in September (see Example 12, Table 2). The employer recovers the payment as a net amount from the income earner.

Example 21
NEW REPORT
Type of action: New report
Payer's report reference: 20xx11121435
PAY PERIOD
Payment date or other report date: 12.11.20xx
The start date of the pay period: 01.11.20xx
The end date of the pay period: 30.11.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 2000.00
Recovery: Yes  
Earnings period: 10.08.20xx–31.08.20xx*  
Additional recovery details:  
Recovery date: 10.11.20xx  
Withholding from the recovered amount 500.00
Original pay period: 01.09.–30.09.20xx  
The original payment date: 15.09.20xx*  

* The earnings period and the original payment date are complementary additional data; however, providing them is recommended. The additional recovery data ‘Original pay period’ is mandatory. The ‘Original pay period’ to be reported in ‘Additional recovery details’ is the pay period during which the payment subject to recovery was originally paid to the income earner.

The payer is also recommended to report the ‘Original payment date’ entry in recovery cases, as the Finnish Tax Administration needs this information for allocating the withholding from the recovered amount to the correct tax period. When the payment is recovered from the income earner as a net amount, the payer reports the tax withheld using the ‘Withholding from the recovered amount’ entry. In the net recovery in Example21, the actual amount recovered from the income earner is EUR 1,500. The Tax Administration reduces the amount of withholding for September that is the payer’s employer obligation. Even then, the amount of the recovered income type is reported as an amount of EUR 2,000.

Example 22: Overpayment is recovered as a net amount; other income is also paid to the income earner at the same time.

If, in the previous example, the income earner were paid the normal monthly wages of EUR 2,800 at the same time, it could have been reported in the same report as the recovery.

Example 22
NEW REPORT
Type of action: New report
Payer's report reference: 20xx11121435
PAY PERIOD
Payment date: 12.11.20xx
The start date of the pay period: 01.11.20xx
The end date of the pay period: 30.11.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
Income TYPE DETAILS EUR
201 Time-rate pay 2800.00
Earnings period: 01.11.20xx–30.11.20xx*  
201 Time-rate pay 2000.00
Recovery: Yes  
Earnings period: 10.08.20xx–31.08.20xx*  
Additional recovery details:  
Recovery date: 10.11.20xx  
Withholding from the recovered amount: 500.00
Original pay period: 01.09.–30.09.20xx  
The original payment date: 15.09.20xx*  
402 Withholding tax (25% of EUR 2,800) 700.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,800) 200.20
414 Employee's unemployment insurance contribution (from EUR 2,800) 39.20

*The earnings period and the original payment date are complementary additional data; however, providing them is recommended. The additional recovery data, 'Original pay period', is mandatory. The payer is also recommended to report the Original date of payment in recovery cases, as the Finnish Tax Administration needs this information for allocating the withholding from the recovered amount to the correct tax period.

In Example 22, based on the submitted report, the Tax Administration corrects the payer's employer contribution obligation for self-assessed taxes for September by EUR 500, which means that the obligation is released to be used to pay later obligations, or the released amount is returned to the payer.

If the employee's social insurance contributions were not already corrected in an earlier replacement report, the payer could report them as lower amounts in the report.

If the payment previously made in Example 22 had been reported using the reporting method 1 for monetary wages using the 'Total wages' income type, the amounts paid using the 'Time-rate pay' income type and the amount recovered using the 'Total wages' income type should be reported on separate reports, because reporting method 1 information cannot be submitted in the same report as reporting method 2 information. The payer must report the recovery using the same income type and reporting method used to report the original overpayment.

4.3 Gross recovery

Gross recovery means that the overpayment is recovered from the income earner as a gross amount, or in the same amount that was paid to the income earner. The recovered amount includes the withheld tax. In gross recovery, the payer can, for example, send an invoice to the income earner, or recover the overpayment at a later date from the net wages paid to the income earner.

In gross recovery, the payment cannot be recovered from the gross wages paid to the income earner. If the payment is recovered from the gross wages paid to the income earner, this is offsetting from wages, and the recovery must not be separately reported to the Incomes Register in these situations. Offsetting from wages is discussed in Section 4.8.

Gross recovery with an invoice or other such claim may come into question when no more wages or other payments will be paid to the income earner. The payer cannot then recover income from a payment made later; instead, the income must be recovered from the income earner as a gross amount. The income earner must pay the overpayment back to the payer in the same amount.

Example 23: Gross recovery of an overpayment.

The income earner was mistakenly overpaid EUR 900 in wages in connection with the last wage payment (EUR 4,500) in March. The payer has withheld tax, collected the employee's earnings-related pension insurance and unemployment insurance contributions, and paid the employer's social insurance contributions based on the gross amount of EUR 4,500. The payer has reported the paid income to the Incomes Register using the 'Total wages' income type.

When the overpayment was noticed, the payer corrected the previously submitted report and reported the overpayment as an unjust enrichment, at which time the payer corrected the amount of the social insurance contributions and corrected the employer's separate report (see Section 3.1, Unjust enrichment, 3.2, Correcting the employee's social insurance contributions, and Section 7, Correcting an employer's separate report).

The payer has sent an invoice to the income earner for the EUR 900 overpayment. The income earner pays back the payment on 10 May. When the income earner pays back the overpayment, the payer (employer) reports the amount paid back to the Incomes Register:

Example 23
NEW REPORT
Type of action: New report
Payer's report reference: 20xx11121435
PAY PERIOD
Payment date or other report date: 10.05.20xx
The start date of the pay period: 01.05.20xx
The end date of the pay period: 15.05.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
101 Total wages 900.00
Recovery: Yes  
Earnings period: 01.03.20xx–15.03.20xx*  
Additional recovery details:  
Recovery date: 10.5.20xx  
Original pay period: 01.03–15.03.20xx  
The original payment date: 15.03.20xx  

In the above situation in Example23, the payer could have also used net recovery, because the overpayment was noticed and recovered prior to the due date established by the Tax Administration.

* The earnings period and the original payment date are complementary additional data; however, providing them is recommended. The additional recovery data ‘Original pay period’ is mandatory. The payer is also recommended to report the ‘Original payment date’ entry in recovery cases, as the Finnish Tax Administration needs this information for allocating the withholding from the recovered amount to the correct tax period.

The recovery data must be reported using the same income type used to report the overpayment as unjust enrichment. However, the overpayment can be recovered from some other net income paid to the person.

Example 24: Overpayment is recovered as a gross amount from the net wages paid to the income earner.

In July, the income earner was overpaid EUR 330 in overtime compensation. The payer has corrected the report submitted for July and reported the payment of EUR 330 as an unjust enrichment. In the replacement report submitted for July, the payer has reduced the amounts of the employee's earnings-related pension insurance and unemployment insurance contributions to match the correct amount.

In September, the income earner is paid normal monthly pay of EUR 2,800. The payer and the income earner agree that the payer will recover the overpayment (EUR 330) from the income earner's September net wages after the withholding of tax and the collection of the employee contributions. The income earner's withholding percentage is 22.

Example 24
NEW REPORT
Type of action: New report
Payer's report reference: 20xx09151645
PAY PERIOD
Payment date: 15.09.20xx
The start date of the pay period: 01.09.20xx
The end date of the pay period: 15.09.20xx
REPORT (INCOME EARNER) DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-7654 (+ other mandatory data)
INCOME TYPE DETAILS EUR
227 Contract pay (normal contract pay for the month) 2800.00
Earnings period: 01.09.–15.09.20xx  
235 Overtime compensation 330.00
Recovery: Yes  
Earnings period: 15.07-30.07.20xx*  
Additional recovery details:  
Recovery date: 15.09.20xx  
Original pay period: 15.07-30.07.20xx  
The original payment date: 30.07.20xx  
402 Withholding tax (from EUR 2,800) 616.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,800) 200.20
414 Employee's unemployment insurance contribution (from EUR 2,800) 39.50
406 Wages to be paid (2,800 – 616 – 200.20 – 39.50 – 330) 1614.60

* The earnings period is voluntarily submitted complementary additional data.

In the example, the payer had already reduced the amounts of the employee's earnings-related pension insurance and unemployment insurance contributions to match the correct amount in the replacement report submitted for July. If the payer had not corrected the amount in the July report, the payer could correct the employee contribution in the September report, or the report in which the recovery is reported. The employee's earnings-related pension insurance and unemployment insurance contribution would then be paid based on EUR 2,470 (2,800 – 330 = 2,470).

If the payment previously made in Example 24 had been reported using the reporting method 1 for monetary wages using the 'Total wages' income type (instead of the 'Overtime compensation' income type), the amounts paid using the 'Contract pay' income type and the amount recovered using the 'Total wages' income type should be reported in separate reports, because reporting method 1 information cannot be submitted in the same report as reporting method 2 information. The recovery must be reported using the same income type used to previously report the overpayment as unjust enrichment.

If the income is recovered from the income earner as a gross amount, the payer does not deduct the tax withheld from the recovered amount. Once the income earner has paid back the overpayment and the payer has reported it to the Incomes Register, the Tax Administration will take the recovery into consideration in the income earner’s taxation, by correspondingly reducing the income earner’s income amount. However, the tax withheld from the income will be accredited to the income earner in taxation. The Tax Administration will take the amount of recovered income into account in taxation, if the person’s taxation for the year in question has not yet been completed. If the recovery takes place later, the Tax Administration will adjust the income earner’s taxation on the basis of the information submitted by the payer to the Incomes Register. If the overpayment was made prior to 2019, see Section 1.7 for instructions.

With respect to reporting the recovery, it does not matter whether the information was reported to the Incomes Register using reporting method 1 for monetary wages (the so-called lower level of detail for reporting monetary wages) or reporting method 2 (the greater level of detail for reporting monetary wages). The reporting procedure is the same, no matter which method was used to report the information. However, the payer must use the same reporting method (method 1 or 2 for reporting monetary wages) and income type used to report the overpayment as unjust enrichment.

In reporting method 1, you must remember to report the allocation of the recovery to the earnings from work reported using income subtypes. Additionally, you must remember to report the Type of insurance information data connected to the recovered income according to the actual situation.

Example 25: Reporting an unjust enrichment using reporting method 1, when some of the income is not subject to social insurance contributions.

The income earner has been paid EUR 2,500. The amount includes EUR 500 of notice period compensation, which is not subject to social insurance contributions. Later, the payer notices having paid EUR 200 too much in wages. The amount of the notice period compensation was correct. The payer has reported the income to the Incomes Register as an unjust enrichment (see Example 18).

The overpayment (EUR 200) is recovered from the income earner during the July wage payment. The income earner's normal pay for July is EUR 3,000.

Example 25
NEW REPORT
Action type: New report
Payer's report reference: 20xx09161955
PAY PERIOD
Payment date: 31.07.20xx
The start date of the pay period: 01.07.20xx
The end date of the pay period: 31.07.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR

101 Total wages (normal pay for July)

3000.00
101 Total wages 200.00

Type of insurance information:

Subject to social insurance contributions:

Grounds for insurance contribution: No
 
Recovery: Yes  
Additional recovery details:  
Recovery date: 31.07.20xx  
Original pay period: 01.06–15.06.20xx  
The original payment date: 30.06.20xx  
103 Total wages subject to social insurance contributions 200.00
Recovery: Yes  
Additional recovery details:  
Recovery date: 31.07.20xx  
Original pay period: 01.06–15.06.20xx  
The original payment date: 30.06.20xx  
402 Withholding tax (from EUR 3,000) 750.00
413 Employee's earnings-related pension insurance contribution (from EUR 3,000) 214.50
414 Employee's unemployment insurance contribution (from EUR 3,000) 42.00

4.4 Recovered amount includes several income types

In some cases, the recovered amount can include several income types, such as time-rate pay, overtime compensation, and holiday bonus, for which one shared tax withholding has been carried out. In such cases, the recovered income types must be reported separately, but the tax withheld from the recovered amount can be reported as a total amount. Correspondingly, employee contributions collected from the overpayment can be deducted from other employee contributions.

Example 26: Several different income types are recovered from the income earner, net recovery.

The income earner has been paid EUR 583 too much in July. The amount consists of EUR 300 in time-rate pay, EUR 150 in overtime compensation, and EUR 133 in night work allowance. The payer has withheld EUR 152 in tax and collected the employee's earnings-related pension insurance contribution EUR 41.68 and unemployment insurance contribution EUR 8.16 from the overpayment. The payer has submitted a replacement report for July and specified the above-mentioned payments as unjust enrichment.

The income earner pays back the amount in August. The payer recovers the overpayment as a net recovery, i.e. an amount from which the share of withholding (EUR 152) has been deducted is recovered from the income earner. The Tax Administration correspondingly reduces the amount of withholding that is the payer's employer obligation based on the submitted report. The payer can deduct the employee contributions (totalling EUR 49.84) collected from the overpayment from other payments made to the pension provider and the Employment Fund, unless the payer has already reduced the amount in the report reporting the unjust enrichment. In practice, the amount recovered from the income earner is EUR 381.16. The payer reports:

Example 26
NEW REPORT
Type of action: New report
Payer's report reference: 20xx11121435
PAY PERIOD
Payment date or other report date: 15.08.20xx
The start date of the pay period: 01.08.20xx
The end date of the pay period: 15.08.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 300.00
Recovery: Yes  
Earnings period: 01.07.20xx–15.07.20xx*  
Additional recovery details:  
Recovery date: 10.8.20xx  
Withholding from the recovered amount: 152.00
Original pay period: 01.07–15.07.20xx  
The original payment date: 15.07.20xx*  
235 Overtime compensation 150.00
Recovery: Yes  
Additional recovery details:  
Recovery date: 10.8.20xx  
Original pay period: 01.07–15.07.20xx  
The original payment date: 15.07.20xx*  
236 Night work allowance 133.00
Recovery: Yes  
Additional recovery details:  
Recovery date: 10.08.20xx  
Original pay period: 01.07–15.07.20xx  
The original payment date: 15.07.20xx*  
413 Employee's earnings-related pension insurance contribution -41.68
414 Employee's unemployment insurance contribution -8.16

If, in Example 26, other income subject to social insurance contributions is paid to the income earner at the same time, the employee's social insurance contributions could be deducted from other contributions collected from the income earner. This would eliminate the need to report a negative number.

*The earnings period and the original payment date are complementary additional data; however, providing them is recommended. The additional recovery data, 'Original pay period', is mandatory. The payer is also recommended to report the Original date of payment in recovery cases, as the Finnish Tax Administration needs this information for allocating the withholding from the recovered amount to the correct tax period.

4.5 Amount is recovered in several instalments

The overpayment can be recovered from the income earner in several instalments. The payer will report the part of income recovered at the time in question as recovery information. The total amount is not reported. When the error is detected, the original report is corrected with a replacement report and the entire overpayment is marked as an unjust enrichment. However, the recovery is reported in the report for the pay period during which the income is recovered.

Example 27: Amount is recovered in several instalments.

The income earner was paid an overpayment of EUR 1,500 in February in addition to the normal wages of EUR 3,160. The income was originally reported using the 'Total wages' income type. The payer corrects the report submitted for February and marks the overpayment as an unjust enrichment.

In a replacement report, the payer reports the overpayment as an unjust enrichment:

Example 27, table 1/2
REPLACEMENT REPORT
Type of action: Replacement report
Payer's report reference: 20xx20031955
Report version number: 1 (complementary data)
PAY PERIOD
Payment date: 15.02.20xx
The start date of the pay period: 01.02.20xx
The end date of the pay period: 28.08.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
101 Total wages 3160.00
Earnings period: 01.02.20xx–28.02.20xx  
101 Total wages 1500.00
Unjust enrichment: Yes  
Earnings period: 01.02.20xx–28.02.20xx  
402 Withholding tax 1000.00
413 Employee's earnings-related pension insurance contribution (from EUR 3,160) 225.94
414 Employee's unemployment insurance contribution (from EUR 3,160) 44.24

The payer and the income earner have agreed that the income earner will pay back the overpayments in EUR 150 monthly instalments. The payment is recovered from the income earner as a gross amount. The income earner pays the first instalment in April (6 April).

The payer reports the repayment of the overpayment in instalments:

Example 27, table 2/2
NEW REPORT
Type of action: New report
Payer's report reference: 20xx11121435
PAY PERIOD
Payment date or other report date: 06.04.20xx
The start date of the pay period: 01.04.20xx
The end date of the pay period: 30.04.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
101 Total wages 150.00
Recovery: Yes  
Earnings period: 01.02.20xx–28.02.20xx*  
Additional recovery details:  
Recovery date: 06.04.20xx  
Original pay period: 01.02-28.02.20xx  
The original payment date: 15.02.20xx  

If income were paid to the income earner at the same time, it could be reported in the same report.

*The earnings period and the original payment date are complementary additional data; however, providing them is recommended. The additional recovery data, 'Original pay period', is mandatory. The payer is also recommended to report the Original date of payment in recovery cases, as the Finnish Tax Administration needs this information for allocating the withholding from the recovered amount to the correct tax period.

4.6 The overpayment has been paid for a longer period and is recovered in instalments

The overpayment can have been paid to the income earner over several pay periods before the error is detected. The previous pay period and payment date on which the income was originally paid to the income earner is reported in the additional recovery information.

Example 28: Amount was paid to the income earner over several pay periods.

The income earner has been paid a monthly language supplement of EUR 200 for a period of six months (wage payments from February to July) in addition to his normal wages (EUR 2,550). The total amount of the income earner's income has been EUR 2,750. At the end of July, the employer notices that the income earner was not entitled to a language supplement.

The overpayment was originally reported using the 'Other compensation' income type. The payer corrects the reports submitted for February-July and marks the overpayment as an unjust enrichment.

In a replacement report, the payer reports the overpayment as an unjust enrichment (the report for May used as an example):

Example 28, table 1/2
REPLACEMENT REPORT
Type of action: Replacement report
Payer's report reference: 20xx20031955
Report version number: 1 (complementary data)
PAY PERIOD
Payment date: 15.05.20xx
The start date of the pay period: 01.05.20xx
The end date of the pay period: 31.05.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 2550.00
Earnings period: 01.05.20xx–31.05.20xx  
216 Other compensation 200.00
Unjust enrichment: Yes  
Earnings period: 01.05.20xx–31.05.20xx  
402 Withholding tax (20% of EUR 2,750) 550.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,550) 182.32
414 Employee's unemployment insurance contribution (from EUR 2,550) 35.70

The payer and the income earner agree that the income earner pays back the overpayments in EUR 100 monthly instalments. The payment is recovered from the income earner as a gross amount. The previous pay period and payment date on which the income was originally paid to the income earner is reported in the additional recovery information.

The income earner pays the first instalment in the September wage payment. The income earner's normal pay for the pay period in question is EUR 2,550.

Example 28, table 2/2
NEW REPORT
Type of action: New report
Payer's report reference: 20xx11121435
PAY PERIOD
Payment date or other report date: 15.09.20xx
The start date of the pay period: 01.09.20xx
The end date of the pay period: 30.09.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 2550.00
216 Other compensation 100.00
Recovery: Yes  
Earnings period: 01.02.20xx–28.02.20xx*  
Additional recovery details:  
Recovery date: 15.09.20xx  
Original pay period: 01.02-28.02.20xx  
The original payment date: 15.02.20xx  
402 Withholding tax (20% of EUR 2,550) 510.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,550) 182.32
414 Employee's unemployment insurance contribution (from EUR 2,550) 35.70

* The earnings period and original payment date are complementary additional data. The payer is also recommended to report the Original date of payment in recovery cases, as the Finnish Tax Administration needs this information for allocating the withholding from the recovered amount to the correct tax period.

4.7 The overpayment has been paid for a longer period and is recovered in one instalment

The overpayment may have been paid to the income earner for a longer period of time, but the income is recovered in one instalment. In such situations, in the recovery report the payer must itemise which part of the recovered income was paid during which pay period.

Example 29: Payment made in several instalments is recovered in one instalment.

The income earner has been paid a foaming supplement of EUR 100 per month for a period of three months (September to November). The income has been reported to the Incomes Register using the 'Working condition compensation' income type. The employer later notices that the income earner was not entitled to the compensation in question.

After noticing the error, the payer has corrected the reports submitted for the three months and marked the EUR 100 payments reported as working condition compensation as unjust enrichment.

The payer and income earner agree that the income earner will pay back the overpayment (EUR 300) in one instalment in mid-December. Once the income earner has made the payment, the employer reports the recovery information to the Incomes Register:

Example 29
NEW REPORT
Type of action: New report
Payer's report reference: 20xx11121435
PAY PERIOD
Payment date or other report date: 19.12.20xx
The start date of the pay period: 01.12.20xx
The end date of the pay period: 31.12.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
218 Working condition compensation 100.00
Recovery: Yes  
Earnings period: 01.09.20xx–30.09.20xx*  
Additional recovery details:  

Recovery date: 15.12.20xx

 
Original pay period: 01.09.–30.09.20xx  
The original payment date: 15.09.20xx*  
218 Working condition compensation 100.00
Recovery: Yes  
Earnings period: 01.10.20xx–31.10.20xx*  
Additional recovery details:  

Recovery date: 15.12.20xx

 
Original pay period: 01.10.–31.10.20xx  
The original payment date: 15.10.20xx  
218 Working condition compensation 100.00
Recovery: Yes  
Earnings period: 01.11.20xx–30.11.20xx*  
Additional recovery details:  

Recovery date: 15.12.20xx

 
Original pay period: 01.11.–30.11.20xx  
The original payment date: 15.11.20xx  

* The earnings period and original payment date are complementary additional data. The payer is also recommended to report the Original date of payment in recovery cases, as the Finnish Tax Administration needs this information for allocating the withholding from the recovered amount to the correct tax period.

4.8 Treating an overpayment as advance pay

The payer can also correct the overpayment made in the Incomes Register without treating the payment as an unjust enrichment. The payer will then treat the payment in the earnings payment report as previously paid advance pay or another such item. The payer deducts the overpayment from a payment made at a later date. The payer recovers the overpayment by setting off the overpayment from the income earner's next wage payment's gross wages. The next payment of wages means the payment of wages carried out after the overpayment was detected. If the overpayment was made in April, for example, and is not detected until the end of June after the wages for June have already been paid, the overpayment can be offset in the payment of wages for July.

If the deduction in the next wage payment is made from the same income type with which the earlier overpayment was reported to the Incomes Register, you should report to the Incomes Register, in connection with the next wage payment, only the amount actually paid to the income earner – that is, the gross wages of the type of income that is left once the previous overpayment is deducted from it. Treating the overpayment as advance pay is permitted in an earnings payment report submitted to the Incomes Register only if the overpayment can be recovered in total in connection with the next wage payment following the discovery of the overpayment.

This procedure is not recommended, because it can distort the amount of benefits paid to the income earner or, at worst, affect eligibility for the benefit in the first place. If the overpayment is set off from the gross wages, some data users may have to separately request information on the incorrectly paid amounts. Furthermore, the wrong income is used as the grounds for benefits. Treating the overpayment as advance pay is voluntary for the payer. Alternatively, the payer can report the overpayment as an unjust enrichment.

Example 30: Treating an overpayment as advance pay, i.e. setting off pay from wages to be paid at a later date.

An income earner was paid EUR 4,000 in contract pay on 5 October. During the payment, an overpayment of EUR 1,500 in wages was made for the pay period 15 September–30 September 20xx. The correct amount should have been EUR 2,500.

The payer and income earner agree that the payment is treated as advance pay paid to the income earner and set off from the EUR 3,600 in contract pay to be paid to the income earner during the next payment of wages (on 20 October). The payer reports EUR 2,100 to the Incomes Register, withholds tax (20%) from this amount, and collects the employee's social insurance contributions.

Example 30
REPORT WHEN THE PAID INCOME IS TREATED AS ADVANCE PAY
Type of action:New report
Payer's report reference: 20xx10231645
PAY PERIOD
Payment date: 20.10.20xx
The start date of the pay period:01.10.20xx
The end date of the pay period: 15.10.20xx
REPORT (INCOME EARNER) DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-7654 (+ other mandatory data)
INCOME TYPE DETAILS EUR
227 Contract pay 2100.00
Earnings period: 01.10-15.10.20xx*  
402 Withholding tax 420.00
413 Employee’s earnings-related pension insurance contribution 150.15
414 Employee’s unemployment insurance contribution 29.40

It should be noted that not all data users get the data they need based on the above-mentioned data.

* The earnings period is complementary additional data.

However, the deduction need not be made from the same income type as the earlier overpayment. If the payer sets off the overpayment from another income type, it must correct the original report and change the previous overpayment into the same income type from which the deduction will be made during a later wage payment. Again, treating the payment as advance pay is only allowed in an earnings payment report submitted to the Incomes Register if the overpayment can be recovered in its entirety in connection with the next wage payment following the discovery of the overpayment. The amount reported to the Incomes Register in connection with the next wage payment must also match the amount actually paid to the income earner, that is, the gross wages of the type of income which is left once the previous overpayment is deducted from it.

Example 31: Setting off pay from different income types and correcting a previous report.

An income earner was paid EUR 3,800 in wages on 20 February. The employer reported the information as time-rate pay (EUR 3,400) and overtime compensation (EUR 400) to the Incomes Register. Later it is noticed that the income earner was paid EUR 200 in unjust overtime compensation.

The payer and the income earner agree that the payment is treated as advance pay paid to the income earner which will be deducted from the wages paid during the next wage payment (20 March). The person was to be paid EUR 3,400 in time-rate pay on 20 March wage payment. The payer sets off the EUR 200 overpayment paid as overtime compensation from the time-rate pay and reports to the Incomes Register EUR 3,200 in time-rate pay. Because the payer sets off the payment from another income type, the original report (20 February) must be corrected and the overpayment must be marked as the same income type from which the overpayment is deducted.

Example 31, table 1/3
FIRST REPORT BEFORE THE OVERPAYMENT IS DETECTED
Type of action: New report
Payer's report reference: 20xx9876543
PAY PERIOD
Payment date: 20.02.20xx
The start date of the pay period: 01.02.20xx
The end date of the pay period: 28.02.20xx
REPORT (INCOME EARNER) DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-7654 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 3400.00
Earnings period: 01/02–28/02/20xx*  
235 Overtime compensation 400.00
Earnings period: 15/02-20/02/20xx*  
402 Withholding tax 954.00
413 Employee's pension insurance contribution 271.70
414 Employee's unemployment insurance contribution 53.20

Once the overpayment is detected and a decision is made to offset it from another income type to be paid later, a replacement report is submitted for February as follows:

Example 31, table 2/3
REPLACEMENT REPORT WHEN THE PAYMENT IS SET OFF FROM ANOTHER INCOME TYPE
Type of action: Replacement report
Payer's report reference: 20xx9876543
PAY PERIOD
Payment date: 20.02.20xx
The start date of the pay period: 01.02.20xx
The end date of the pay period: 28.02.20xx
REPORT (INCOME EARNER) DETAILS
Type of identifier: Personal identity code (Finnish) ppkkvv-7654 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 3600.00
Earnings period: 01.02.–28.02.20xx*  
235 Overtime compensation 200.00
Earnings period: 15.02.–20.02.20xx*  
402 Withholding tax 954.00
413 Employee’s earnings-related pension insurance contribution 271.70
414 Employee’s unemployment insurance contribution 53.20

Because the EUR 200 overpayment was offset from the time-rate pay for March (EUR 3,400), the payer reports the lower amount of gross wages to the Incomes Register as follows:

Example 31, table 3/3
REPORT WHEN THE PAID INCOME IS TREATED AS ADVANCE PAY
Type of action: New report
Payer's report reference: 20xx1234567
PAY PERIOD
Payment date: 20.03.20xx
The start date of the pay period: 01.03.20xx
The end date of the pay period: 31.3.20xx
REPORT (INCOME EARNER) DETAILS
Type of identifier: Personal identity code (Finnish) ppkkvv-7654 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 3200.00
Earnings period: 01/03-31/03/20xx*  
402 Withholding tax 848.00
413 Employee's pension insurance contribution 228.80
414 Employee's unemployment insurance contribution 44.80

* The earnings period is complementary additional data.

If the overpayment cannot be fully deducted from the next wage payment, the payer must correct the overpayment to an unjust enrichment (see Section3, Reporting and retroactively correcting a payment made on incorrect grounds).

The Incomes Register's method of reporting the overpayment information is described in Section 3.1.

4.9 Unjust enrichment and recovery in the same report

The reporting of an unjust enrichment and recovery has been described above. You can report an unjust enrichment paid during the pay period in question and the income recovered during the same pay period in the same report. Because the unjust enrichment must be reported to the Incomes Register within one month of its detection, situations may arise where the unjust enrichment paid can be recovered during the same pay period. The unjust enrichment must be reported in these situations, too.

Example 32: Unjust enrichment and recovery in the same report.

An income earner was paid EUR 3,000 in wages. The payer withholds tax from the income (20%). In the same payment of wages, an overpayment of EUR 150 made in the previous wage payment is recovered from the income earner. The payment is recovered as a gross amount. The information has been reported to the Incomes Register in the normal manner.

Later, the payer notices that the correct amount of wages payable to the income earner was only EUR 2,700. The payer must correct the submitted report and mark the overpayment as an unjust enrichment. All information in the original report must be resubmitted, including the recovery information:

Example 32
REPLACEMENT REPORT
Type of action: Replacement report
Payer's report reference: 20xx10081111
Report version number: 1 (voluntary data)
PAY PERIOD
Payment date: 05.10.20xx
The start date of the pay period: 16.09.20xx
The end date of the pay period: 30.09.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-7654 (+ other mandatory data)
INCOME TYPE DETAILS EUR
227 Contract pay 2700.00
Earnings period: 16.09.–30.09.20xx*  
227 Contract pay 300.00
Unjust enrichment: Yes  
Earnings period: 16.09.–30.09.20xx*  
227 Contract pay 150.00
Recovery: Yes  
Earnings period: 16.08–31.08.20xx*  
Additional recovery details:  
Recovery date: 05.10.20xx  
Original pay period: 16.08-31.08.20xx  
The original payment date: 05.08.20xx*  
402 Withholding tax (20% of EUR 3,000) 600.00
413 Employee's earnings-related pension insurance contribution (from EUR 2,700) 193.05
414 Employee's unemployment insurance contribution (from EUR 2,700) 37.80

*The earnings period and the original payment date are complementary additional data; however, providing them is recommended. The additional recovery data, 'Original pay period', is mandatory. The payer is also recommended to report the Original date of payment in recovery cases, as the Finnish Tax Administration needs this information for allocating the withholding from the recovered amount to the correct tax period.

4.10 Recovery of fringe benefits

If there is an error in the amount of the reported fringe benefit, the amount must be corrected in the report for the month when the fringe benefit was originally used. A fringe benefit cannot be an unjust enrichment, because the person has had access to the benefit during that time (see Section3.1.3, ‘When is information corrected for the original period without the “Unjust enrichment” entry?’). When a payer recovers income from an income earner, the recovery is collected from monetary wages. In certain situations, the share of a fringe benefit can also be recovered, and in such cases, the share of the non-monetary benefit is also collected from monetary wages. In such cases, the recovered amount can be reported as a reimbursement collected for a fringe benefit, provided that the person in question still has access to the fringe benefit. However, it should be noted that the amount reported as a reimbursement collected for a fringe benefit may not exceed the taxable value of the fringe benefit, even if the recovered amount was actually higher.

Example 33:Recovery of fringe benefits from monetary wages.

The amount of the income earner’s wages is EUR 5,000. The amount consists of EUR 4,000 in time-rate pay and EUR1,000 in accommodation benefit. The payer recovers the entire amount of EUR 5,000 because the income earner was on unpaid vacation for the month in question. Because the amount of the income earner’s monetary wages is not sufficient for recovering the entire amount in one instalment, the employer and the employee agree that the payment is recovered in instalments of EUR 1,000.

The payer submits a replacement report and enters the monetary wages as an unjust enrichment. The payer must also correct the amounts employee contributions collected. The employee’s social insurance contributions will be reduced once the payer reports the unjust enrichment.

Example 33, table 1/2
REPLACEMENT REPORT ON THE UNJUST ENRICHMENT BEFORE THE FRINGE BENEFIT IS RECOVERED
Type of action: Replacement report
Payer's report reference: 20xx09161955
PAY PERIOD
Payment date:15.09.20xx
The start date of the pay period: 01.09.20xx
The end date of the pay period: 30.09.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876(+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 4000.00
Unjust enrichment:Yes  
301 Accommodation benefit 1000.00
402 Withholding tax (from EUR 5,000) 1250.00
413 Employee's earnings-related pension insurance contribution (from EUR 1,000) 71.50

414 Employee's unemployment insurance contribution (from EUR 1,000)

14.00

When paying the wages (EUR4,000 in time-rate pay and EUR1,000 in accommodation benefit) for the pay period following the detection of the mistake, the payer recovers the share of the fringe benefit (EUR1,000) by submitting the ‘Reimbursement collected form a fringe benefit’ entry in the report:


Example 33, table 2/2
REPORT WHEN THE SHARE OF THE FRINGE BENEFIT IS COLLECTED FROM MONETARY WAGES
Type of action: New report
Payer's report reference: 20xx11161200
PAY PERIOD
Payment date:15.11.20xx
The start date of the pay period: 01.11.20xx
The end date of the pay period: 30.11.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 4000.00
Earnings period: 10.10.-31.10.20xx  
301 Accommodation benefit 1000.00
402 Withholding tax (from EUR 5,000) 1250.00
407 Reimbursement collected for other fringe benefits 1000.00
413 Employee's earnings-related pension insurance contribution (from EUR 4,000) 286.00
414 Employee's unemployment insurance contribution (from EUR 4,000) 56.00

Example 34:Partial recovery of fringe benefits.

The amount of the income earner’s wages is EUR5,000. The amount consists of EUR4,000 in time-rate pay and EUR1,000 in accommodation benefit, of which the employer recovers a monthly reimbursement of EUR800. The payer recovers the entire amount of EUR4,200 because the income earner was on unpaid vacation for the month in question. Because the amount of the income earner’s monetary wages is not sufficient for recovering the entire amount in one instalment, the employer and the employee agree that the payment is recovered in instalments of EUR1,000.

Example 34, table 1/3
ORIGINAL REPORT, WHEN THE UNPAID VACATION WAS NOT YET KNOWN
Type of action: New report
Payer's report reference: 20xx09161955
PAY PERIOD
Payment date:15.09.20xx
The start date of the pay period: 01.09.20xx
The end date of the pay period: 30.09.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 4000.00
301 Accommodation benefit 1000.00
402 Withholding tax (from EUR 4,200) 1000.00
407 Reimbursement collected for other fringe benefits 800.00
413 Employee's earnings-related pension insurance contribution (from EUR 4,200) 300.30

414 Employee's unemployment insurance contribution (from EUR 4,200)

58.80

The payer submits a replacement report and enters the monetary wages as an unjust enrichment. The payer must also correct the amounts employee contributions collected. The employee’s social insurance contributions will be reduced once the payer reports the unjust enrichment.

Example 34, table 2/3
REPLACEMENT REPORT ON THE UNJUST ENRICHMENT BEFORE THE FRINGE BENEFIT IS RECOVERED
Type of action: Replacement report
Payer's report reference: 20xx09161955
PAY PERIOD
Payment date:15.09.20xx
The start date of the pay period: 01.09.20xx
The end date of the pay period: 30.09.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876(+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 4000.00
Unjust enrichment: Yes  
301 Accommodation benefit 1000.00
402 Withholding tax (from EUR 4,200) 1000.00
407 Reimbursement collected for other fringe benefits 800.00
413 Employee's earnings-related pension insurance contribution (from EUR 200) 14.30
414 Employee's unemployment insurance contribution (from EUR 200) 2.80

In connection with the next payment of wages, the payer recovers from the employee an overpayment of EUR1,000, of which EUR800 concerns monetary wages and EUR200 the fringe benefit. This means that in addition to the reimbursement of EUR800 agreed between the parties, an overpayment of EUR200 is collected regarding the fringe benefit.

Example 34, table 3/3
REPORT WHEN THE SHARE OF THE FRINGE BENEFIT IS COLLECTED FROM MONETARY WAGES
Type of action: Newreport
Payer's report reference: 20xx11161200
PAY PERIOD
Payment date:15.10.20xx
The start date of the pay period: 01.10.20xx
The end date of the pay period: 30.10.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 4000.00
201 Time-rate pay 800.00
Recovery: Yes  
301 Accommodation benefit 1000.00
402 Withholding tax (from EUR 5,000) 1250.00
407 Reimbursement collected for other fringe benefits (EUR 800 + EUR 200) 1000.00
413 Employee's earnings-related pension insurance contribution (from EUR 4,000) 286.00
414 Employee's unemployment insurance contribution (from EUR 4,000) 56.00

If no further wages are paid to the income earner, and the payer is also recovering the share of the fringe benefit from the income earner, the payer reports this by submitting a replacement report and indicating the share of previously paid wages equalling the amount of the fringe benefit as an unjust enrichment. Once the income earner repays the overpayment, the payer must report the share of the wages as recovered. The amount of the fringe benefit reported in the report remains the same as during the month in question.

Example 35: Recovery of fringe benefits; no further wages are paid.

An employee has been paid EUR4,000 in wages and EUR1,000 in accommodation benefit in September. The wages were paid, even though the employee’s employment already ended at the end of August.

Example 35, table 1/3
FIRST REPORT BEFORE THE ERROR IS DETECTED
Type of action: New report
Payer's report reference: 20xx09161955
PAY PERIOD
Payment date:15.09.20xx
The start date of the pay period: 01.09.20xx
The end date of the pay period: 30.09.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 4000.00
301 Accommodation benefit 1000.00
402 Withholding tax (from EUR 5,000) 1250.00
413 Employee's earnings-related pension insurance contribution (from EUR 5,000) 357.50

414 Employee's unemployment insurance contribution (from EUR 5,000)

70.00

The payer recovers the wages and fringe benefit (EUR5,000 in total). The payer corrects the September report and reports the monetary wages paid as an unjust enrichment. The fringe benefit is reported in the normal manner.

Example 35, table 2/3
REPLACEMENT REPORT ON THE UNJUST ENRICHMENT BEFORE THE FRINGE BENEFIT IS RECOVERED
Type of action:Replacement report
Payer's report reference: 20xx09161955
PAY PERIOD
Payment date:15.09.20xx
The start date of the pay period: 01.09.20xx
The end date of the pay period: 30.09.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 4000.00
Unjust enrichment: Yes  
301 Accommodation benefit 1000.00
402 Withholding tax (from EUR 5,000) 1250.00
413 Employee's earnings-related pension insurance contribution (from EUR 1,000) 71.50
414 Employee's unemployment insurance contribution (from EUR 1,000) 14.00

Because the amount of the monetary wages for September (EUR4,000) is not sufficient for recovering the entire overpayment (monetary wages + the fringe benefit, i.e. EUR5,000 in total) in one instalment, the payer must also correct the earnings payment report for the previous month (August) and enter a share of EUR1,000 of previously paid wages as an unjust enrichment.

Example 35, table 3/3
REPORT WHEN A FRINGE BENEFIT IS RECOVERED BUT NO FURTHER WAGES ARE PAID
Type of action:Replacement report
Payer's report reference: 20xx09161944
PAY PERIOD
Payment date:15.08.20xx
The start date of the pay period: 01.08.20xx
The end date of the pay period: 30.08.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-9876(+ other mandatory data)
INCOME TYPE DETAILS EUR
201 Time-rate pay 3000.00
201 Time-rate pay 1000.00
Unjust enrichment: Yes  
301 Accommodation benefit 1000.00
402 Withholding tax (from EUR 5,000) 1250.00
413 Employee's earnings-related pension insurance contribution (from EUR 3,000) 214.50
414 Employee's unemployment insurance contribution (from EUR 3,000) 42.00

5 Cancellation of data

Cancellation of data means the deletion of data from the Incomes Register. The payer can entirely delete a submitted record or report if it was erroneous. When a report is cancelled, the previously submitted report is deleted. The deletion is allocated to the correct report based on the Incomes Register’s report reference or the payer’s report reference.

The unnecessary cancellation of correctly submitted reports should be avoided. We do not recommend cancelling the data before the new report can be submitted. The recommendation is that the cancellation of the previous report and submission of the new report be made on the same day; for more details, see Section6.4.

Data is deleted in different ways via different reporting channels. If the report is deleted using the e-service online form or a paper form, the report data to be deleted is submitted in an earnings payment report or the employer's separate report according to which type of report is in question. In the e-service online form, open the previously submitted report and select 'Delete'. Correspondingly, select 'Report cancellation' as the action type on a paper form.

If the data is submitted via the technical interface or the upload service, records and reports are not cancelled using the same earnings payment report or employer's separate report in which the new and replacement reports are submitted. Cancellation has been separated into its own record type. If the record type is the cancellation of an earnings payment report or the cancellation of an employer's separate report, provide the following information:

  • record owner's (payer's) identifier
  • payer’s report reference, or
  • Incomes Register report reference.

You can provide the report's version number. The version number is voluntarily submitted, complementary additional data.

When cancelling an entire record, use the record reference of the record in question.

6 Correcting data by cancelling a previously submitted report

Although corrections to data in the Incomes Register are usually made using a replacement report, there are situations in which the replacement method cannot be used, but the previously submitted report must be cancelled instead, after which a new report with the correct data must be submitted.

The data must be corrected by cancelling the previous report and submitting a new one in the following situations:

  • Payment day correction
  • Pay period correction
  • Correction of the payer’s and income earner’s customer identifications
  • Correction of the type of additional income earner data when changing the additional data ‘Athlete’ or ‘Organisation’
  • Correction of payer type when changing the information ‘Temporary employer’
  • Correction of the customer identifications of the actual employer in the ‘Substitute payer’ data group
  • Correction of the ‘Acts as substitute payer’ entry
  • Correction of the income earner’s birth date
  • Correction of the earnings-related pension insurance information
  • Correction of a pension policy number
  • Correction of the occupational accident insurance company identifier or policy number
  • Corrections to ‘Type of exception to insurance’ data
    • Retroactive changes to the ‘No obligation to provide insurance’ entry
    • Retroactive changes to the ‘Not subject to Finnish social security’ entry
    • Retroactive changes to the ‘Voluntary insurance in Finland (earnings-related pension insurance)’ entry.

We do not recommend cancelling the data before the new report can be submitted. The recommendation is that the cancellation of the previous report and submission of the new report be made on the same day.

If the correction is made on a paper form, enter 'Report cancellation' as the action type. If the information is corrected via the e-service, the payer can open a previously submitted report and delete it. If the information is submitted via the technical interface or the upload service, the payer submits the necessary information in a cancellation report (see Section 5). The payer must then submit a new report with the correct data.

6.1 Correcting the payment date and pay period

If the payment date or pay period of a payment was incorrect, the data cannot be corrected using a replacement report for the payment date in question. The previously submitted report must be cancelled, after which a new report must be submitted with the payment date and pay period correctly reported.

If all reports of a submitted record contained an incorrect payment date or pay period, the entire record can be cancelled using the record reference generated by the Incomes Register or the payer's own record reference.

Example 36: Correcting the payment date.

The income earner has been paid EUR 3,500 in time-rate pay on 15 May. The income was incorrectly reported as having been paid on 5 May.

The payer submits the report to the Incomes Register and does not notice the error:

Example 36, table 1/3
NEW REPORT
Type of action: New report
Payer's report reference: 20xx05170720
PAY PERIOD
Payment date: 05.05.20xx
The start date of the pay period: 01.05.20xx
The end date of the pay period: 31.05.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Type of identifier: Tax Identification Number (TIN) ZZZZZZZZ (+ country code of the country that issued the TIN)
Occupational class: Statistics Finland's classification of occupations
Occupational class ID: NNNNN
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
INCOME TYPE DETAILS EUR
201 Time-rate pay 3500.00
402 Withholding tax 1100.00
413 Employee's earnings-related pension insurance contribution 250.25
414 Employee's unemployment insurance contribution 49.00
  • The Incomes Register returns the report reference: a5d1dec9b7b94ca7ab118d644328fdd3

When the employer notices the error, the data must be corrected by cancelling the previous report and submitting a new one.

If the data is submitted via the technical interface or the upload service, the payer submits the following cancellation report.

Example 36, table 2/3
CANCELLATION OF AN EARNINGS PAYMENT REPORT (InvalidationsToIR)

Cancellation of an earnings payment report: Code value 105

(or, alternatively, code value 109 if the entire record is cancelled)
Record owner: 1234567-8
Payer's report reference: 20xx05170720
Incomes Register report reference: a5d1dec9b7b94ca7ab118d644328fdd3
Version number: 1 (complementary data)

The payer then submits a new report with the correct information:

Example 36, table 3/3
NEW REPORT
Type of action: New report
Payer's report reference: 20xx18050940
PAY PERIOD
Date of payment: 15.05.20xx
The start date of the pay period: 01.05.20xx
The end date of the pay period: 31.05.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Type of identifier: Tax Identification Number (TIN) ZZZZZZZZ (+ country code of the country that issued the TIN)
Occupational class: Statistics Finland's classification of occupations
Occupational class ID: NNNNN
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
INCOME TYPE DETAILS EUR
201 Time-rate pay 3500.00
402 Withholding tax 1100.00
413 Employee's earnings-related pension insurance contribution 250.25
414 Employee's unemployment insurance contribution 49.00

6.2 Correcting customer identifiers, pension policy numbers and insurance policy numbers

If the customer identifier used as the income earner's or the payer's identifying information has been incorrectly reported to the Incomes Register, the information must be corrected by cancelling the previously submitted report and submitting a new report.

This procedure applies to corrections to the following data:

  • Correction of the payer's and income earner's customer identifications
  • Correction of the customer identifications of the actual employer in the Substitute payer data group
  • Correction of the income earner's birth date
  • Correction of a pension policy number
  • Correction of the Occupational accident insurance company identifier or policy number.

If a foreign person later receives a Finnish personal identity code, the personal identity code is reported on the next report submitted after the change. Correspondingly, if the person's sex changes, the new identifier is reported on the next report submitted after the change. In these cases, the previous reports do not need to be corrected. The foreign customer identifier must still also be reported for foreign income earners and payers.

For information on how to correct the information, see Example 36 in Section 6.1.

6.3 Correcting Exception to insurance information

If the income earner's insurance provision obligation has been incorrectly reported or the circumstances change at a later date, the information must be corrected by cancelling the previously submitted report and submitting a new report. Correction by cancellation applies to the following information:

  • Retroactive changes to No obligation to provide insurance data
  • Retroactive changes to Not subject to Finnish social security data
  • Changes to Voluntary insurance in Finland (earnings-related pension insurance) data.

Corrections to Type of exception to insurance information involve a situation in which the income earner's income was originally reported as being subject to social insurance contributions, but it is later noticed that there would have been no obligation to provide insurance with regard to the income paid to the income earner, that the income earner is not subject to Finnish social security, or that the person is covered by voluntary insurance in Finland. In such a case, the original report must be cancelled, after which a new report must be submitted with the correct Type of exception to insurance information. The above procedure must be used in order to also deliver the data to social insurance providers who had received the incorrectly reported data.

Example 37: Correcting Exception to insurance data.

A foreign employee works in Finland for one year (15 April 20n1–14 April 20n2) employed by a Finnish employer. His wages are EUR 4,600 per month. The employee is paid wages for the first pay period, before he retroactively receives an employee's certificate from his home country. Because the certificate had not yet been received when the first wages were paid, the payer must pay the social insurance contributions for the employee's wages, and provide the other data needed by users of Incomes Register data.

Example 37, table 1/3
NEW REPORT
Type of action: New report
Payer's report reference: 20xx05170720
PAY PERIOD
Payment date: 15.05.20xx
The start date of the pay period: 01.05.20xx
The end date of the pay period: 31.05.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Type of identifier: Tax Identification Number (TIN) ZZZZZZZZ (+ country code of the country that issued the TIN)
Occupational class: Statistics Finland's classification of occupations
Occupational class ID: NNNNN
Earnings-related pension insurance information Employee's earnings-related pension insurance
Earnings-related pension provider code: NN
Pension policy number of earnings-related pension provider: NNNNZZZZ
Start date of the employment:15.04.20n1
End date of the employment: 14.04.20n2
INCOME TYPE DETAILS EUR
201 Time-rate pay 4600.00
402 Withholding tax 1150.00
413 Employee's earnings-related pension insurance contribution 328.90
414 Employee's unemployment insurance contribution 64.40
  • The Incomes Register returns the report reference: a5d1dec9b7b94ca7ab118d644328fdd3

Based on the submitted report, the data has been provided to social insurance providers (including the pension insurance provider, the Employment Fund, and an occupational accident insurance company).

When the posted employee's certificate is received, the data must be corrected as described above by cancelling the previous report and submitting a new one. If the information is submitted via the technical interface or the upload service, the payer submits the following cancellation report.

Example 37, table 2/3
CANCELLATION OF AN EARNINGS PAYMENT REPORT (InvalidationsToIR)
Cancellation of an earnings payment report: Code value 105
Record owner: 1234567-8
Payer's report reference: 20xx05170720
Incomes Register report reference: a5d1dec9b7b94ca7ab118d644328fdd3
Version number: 1 (complementary data)

If the information is corrected via the online form of the e-service, the payer can open a previously submitted report and delete it.

Social insurance providers who have received the original report are notified of the cancellation of the report.

The payer then submits a new report with the correct information. It is recommended that the employment validity data be provided even if the income earner does not have pension insurance in Finland.

Example 37, table 3/3
NEW REPORT
Type of action: New report
Payer's report reference: 20xx06041115
PAY PERIOD
Payment date: 15.05.20xx
The start date of the pay period: 01.05.20xx
The end date of the pay period: 31.05.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234
Type of identifier: Tax Identification Number (TIN) ZZZZZZZZ (+ country code of the country that issued the TIN)
Type of exception to insurance: Not subject to Finnish social security (earnings-related pension, health, unemployment, or accident and occupational disease insurance)
Social security certificate: To Finland A1 certificate or agreement (complementary additional data)
Start date of the employment: 15.04.20n1
End date of the employment: 14.04.20n2
INCOME TYPE DETAILS EUR
201 Time-rate pay 4600.00
402 Withholding tax 1150.00

In Example 37, the payer must also correct the total amount of health insurance contributed by the employer, as reported in an employer's separate report, if the amount of health insurance contribution paid changes due to the correction of the earnings payment report.

The data must be corrected in the manner described above also when it was originally reported that the income earner is not subject to Finnish social security or if there is no obligation to provide insurance for the income earner, and it is later discovered that the income should have been reported as subject to social insurance contributions.If the income paid to the income earner falls below the lower limit for earnings-related pension insurance (EUR 61.37 per month in 2021) and this limit is later exceeded during the same month, the payer must cancel the previous report and submit a new report with the correct data.

If the person is not obligated to take out YEL or MYEL insurance due to the small scale of their business operations, the ‘No obligation to provide insurance’ entry is reported, and no earnings-related pension insurance details need to be given. Additionally, the ‘Self-employed person, no obligation to take out YEL or MYEL insurance’ entry must be submitted in the additional income earner details. If it is later discovered that the income earner would have been obligated to take out insurance – for example, after the business has grown – the payer must cancel the previously submitted reports and submit new ones, as described in the example below.

Example 38: The income earner's business has been small in scale, and they have not been under obligation to take out YEL insurance.

The payer paid the person EUR 1,000 in wages and submitted the data on the earnings payment report as follows:

Example 38, table 1/3
NEW REPORT
Type of action: New report
Payer's report reference: 20xx031520xxx
PAY PERIOD
Payment date: 15.03.20xx
The start date of the pay period: 01.03.20xx
The end date of the pay period: 30.03.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234

Type of additional income earner data Self-employed person, no obligation to take out YEL or MYEL insurance

Type of exception to insurance: No obligation to provide insurance (earnings-related pension, health, unemployment, or accident and occupational disease insurance)
INCOME TYPE DETAILS EUR
201 Time-rate pay 1000.00
402 Withholding tax 200.00

If it is later discovered that the income earner would have been under obligation to take out self-employed person's pension insurance, the payer must cancel the previously submitted report.

Example 38, table 2/3
CANCELLATION OF AN EARNINGS PAYMENT REPORT (InvalidationsToIR)

Cancellation of an earnings payment report: Code value 105

Record owner: 1234567-8

Payer's report reference:20xx031520xxx

Incomes Register report reference:a5d1dec9b7b94ca7ab118d644328fdd6

Version number: 1 (complementary data)

Once the report is cancelled, the payer must submit a new report with the correct data.

Example 38, table 3/3
NEW REPORT
Type of action: New report
Payer's report reference: 20xx031520zzz
PAY PERIOD
Payment date: 15.03.20xx
The start date of the pay period: 01.03.20xx
The end date of the pay period: 30.03.20xx
INCOME EARNER DETAILS
Type of identifier: Personal identity code (Finnish) ddmmyy-1234

Earnings-related pension insurance information Pension insurance for the self-employed (or Pension insurance for farmers)

Type of exception to insurance: No obligation to provide insurance (earnings-related pension insurance)
Type of exception to insurance: No obligation to provide insurance (unemployment insurance)
Type of exception to insurance: No obligation to provide insurance (accident and occupational disease insurance)
INCOME TYPE DETAILS EUR
201 Time-rate pay 1000.00
402 Withholding tax 200.00

6.4 Impacts of cancellations on the payment of self-assessed taxes

Where erroneous reports submitted to the Incomes Register are corrected by cancellation, the old report must be cancelled and the new report must be submitted during the same day. Reports submitted between 4:00 and 6:00p.m. may in some isolated cases be recorded for different days. Due to this, you should submit your reports either before 4:00p.m. or after 6:00p.m.

If data submitted to the Incomes Register is corrected by cancelling a previous report, check the time of refund of self-assessed taxes from the MyTax service. Depending on the refund time, a payment intended for the Tax Administration may be returned to the payer if the new data reported to the Incomes Register is not transferred to the MyTax service in sufficient time. By selecting ‘The refund will be saved for later use’ as the refund time in the MyTax service, payments intended for employer contributions will not be unnecessarily refunded to the payer.

If either ‘Refund immediately after processing’ or ‘Refund after the due date following the day of filing’ is selected as the refund time, a payment intended for the Tax Administration may be returned to the payer. In such a case, MyTax will treat the tax payment as unpaid and will calculate late payment interest on the payment starting from the payment’s original due date.

7 Correcting an employer's separate report

7.1 General information on correcting an employer's separate report

If there has been an error in the information in an employer's separate report, the payer must correct the submitted information. An employer's separate report is corrected in the same way as an earnings payment report. An incorrect report is corrected using a replacement report. This means that the payer corrects the incorrect information and resubmits all other information in the report, including the information that was correct.

The correction of an employer's separate report is allocated to the correct report using the Incomes Register's report reference or the payer's own report reference (for more details on report references, see Section 1.4., How is a correction allocated to the correct report?).

Example 39: Payer retroactively reports a deduction made to a health insurance contribution.

The payer has paid EUR 4,700 of wages to the income earner. Half of the pay is for a period during which the income earner was sick. The payer has reported the amount of health insurance contribution paid based on the wages using the Employer's health insurance contribution (total) income type.

Example 39, table 1/2
FIRST REPORT
Type of action: New report
Payer's report reference: 20xx050511125
Reporting date: 05.05.20nn
PAYER'S (=ACTUAL EMPLOYER) DETAILS
Type of identifier: Business ID
Identifier: 8765432-1 (Customer identification of the actual employer)
REPORT DETAILS
Payment month:04
Payment year: 20nn
CODE INCOME TYPE DETAILS EUR
102 Employer's health insurance contribution (total) 71.91

Based on the sick pay paid in May, the employer has been granted a daily allowance benefit of EUR 1,200, based on which the employer is entitled to a refund of the paid health insurance contribution from the Tax Administration. The employer submits a replacement employer's separate report for May, in which the employer reports the deductions under Deductions to be made from the employer's health insurance contribution, and also resubmits the previously reported Employer's health insurance contribution (total) information.

Example 39, table 2/2
REPLACEMENT REPORT WHEN A DAILY ALLOWANCE BENEFIT IS GRANTED
Type of action: Replacement report
Payer's report reference: 20xx050511125
Reporting date: 05.05.20nn
PAYER'S (=ACTUAL EMPLOYER) DETAILS
Type of identifier: Business ID
Identifier: 8765432-1 (Customer identification of the actual employer)
REPORT DETAILS
Payment month: 04
Payment year: 20nn
CODE INCOME TYPE DETAILS EUR
102 Employer's health insurance contribution (total) 71.91
103 Deductions to be made from the employer's health insurance contribution 18.36

The payer may also make the deduction during the current pay period, i.e. when the payer is notified of the benefit decision. The amount of the health insurance contribution for the current period will then be reduced, but the payer will not receive the compensatory interest that would have been paid if the deduction had been paid retroactively for the original period.

If the income data on an earnings payment report changes in such a manner that the amount of the employer's health insurance contribution also changes, the payer must also correct the submitted employer's separate report. This is the case when, for example, wages paid change to an unjust enrichment. The payment will then no longer be subject to a health insurance contribution. All information, including the information that was correct, must be resubmitted.

Example 40: An earnings payment report is corrected, which also makes it necessary to correct a previously submitted employer's separate report.

The income earner has been paid EUR 5,000. The payer has reported the income in an earnings payment report and correspondingly provided the information on the health insurance contribution in an employer's separate report.

Example 40, table 1/2
FIRST REPORT BEFORE THE ERROR IS DETECTED
Type of action: New report
Payer's report reference: 20xx05101200
Reporting date: 05.10.20nn
PAYER'S (=ACTUAL EMPLOYER) DETAILS
Type of identifier: Business ID
Identifier: 8765432-1 (Customer identification of the actual employer)
REPORT DETAILS
Payment month:09
Payment year: 20nn
CODE INCOME TYPE DETAILS EUR
102 Employer's health insurance contribution (total) 76.50

The employer accidentally paid EUR 2,000 too much in addition to the normal wages, EUR 3,000. The employer corrects the submitted earnings payment report and marks the overpayment as an unjust enrichment.

Correspondingly, the previously submitted employer's separate report must be corrected:

Example 40, table 2/2
REPLACEMENT REPORT WHEN THE ERROR IS DETECTED
Type of action: Replacement report
Payer's report reference: 20xx05101200
Reporting date: 05.10.20nn
PAYER'S (=ACTUAL EMPLOYER) DETAILS
Type of identifier: Business ID
Identifier: 8765432-1 (Customer identification of the actual employer)
REPORT DETAILS
Payment month: 09
Payment year: 20nn
CODE INCOME TYPE DETAILS EUR
102 Employer's health insurance contribution (total) 45.90

7.2 Correcting data by cancelling a previously submitted report

There are certain situations involving error correction in the employer's separate reports, where the replacement method cannot be used, but the previously submitted report must be cancelled instead, after which a new report with the correct data must be submitted.

The data must be corrected by cancelling the previous report and submitting a new one in the following situations:

  • Correction of a reporting period
  • Correction of the payer's customer identification
  • Correction of a pension policy number
  • Correction of the Occupational accident insurance company identifier or policy number.

For more details on submitting data in an employer's separate report, see the instructions Reporting data to the Incomes Register: employer’s separate report.

8 Key rules regarding corrections and the reporting of overpayments

Any corrections to data reported to the Incomes Register must be carried out according to the principles below. The key principles regarding reporting and the correction of data:

  • The earnings payment report is only used to report amounts actually paid to the person in question.
  • The earnings payment report is only used to report taxes and other charges actually collected from the person in question.
    • Any technical deductions such as transfers of income from one pay type to another made in the payroll system must not be reported to the Incomes Register.
    • Employee contributions or other reimbursements must not be reported if they have not actually been collected from the person in question and deducted from their wages.
    • Withholding must not be reported if it has not actually been collected from the person in question and deducted from their wages.
  • Negative taxes and employee contributions can only be reported if funds have actually been returned to the person in question.
  • Negative withholding tax can only be reported if the withholding tax cannot be adjusted by reducing tax withheld from subsequent wages.

When reporting an overpayment, or an unjust enrichment, keep in mind the following:

  • Overpayments cannot be reported as negative values.
  • An overpayment is reported by correcting previously reported income to an unjust enrichment.
  • Fringe benefits and non-monetary benefits cannot be reported as an unjust enrichment.
  • Tax-exempt reimbursements of expenses cannot be reported as an unjust enrichment.
  • Charges collected from income or other deductions (400 series income types) cannot be reported as an unjust enrichment.
  • Income cannot be reported as recovered, unless it has first been reported as an unjust enrichment.
  • If an overpayment is treated as advance pay (offsetting from wages), it must not be reported as an unjust enrichment.
    • Offsetting from wages is not recommended, because it can distort the amount of benefits paid.
  • Reporting an overpayment as an unjust enrichment reduces the amount of social insurance contributions to be paid.

When reporting recovered income, keep in mind the following:

  • Recovery must only be reported if income was actually collected from the person in question.
  • Recovered income cannot be reported to as a negative amount.
  • The income must first be reported as an unjust enrichment before reporting its recovery.
  • Recovered income must be reported in a separate report with the details of the recovery.
  • Recovery must not be reported before the income is actually collected from the person in question.
    • Any planned recoveries must not be reported.
  • Income can be recovered as either a gross or a net amount.
    • In gross recovery, the payer recovers the overpayment from the income earner according to the actual amount overpaid. The recovered amount also includes the share of withholding originally carried out from the income.
    • In net recovery, the payer recovers the overpayment, from which they have first deducted the proportion of withholding carried out on the income original payment date. The payer reports the withholding amount in ‘Additional recovery details’ under ‘Withholding from the recovered amount’. However, the overpayment must be reported to the Incomes Register according to the original overpayment, i.e. so that the amount reported also includes the share of withholding.
    • The ‘Withholding from the recovered amount’ entry impacts the payer’s withholding obligations and reduces the amount withheld from the income earner.
    • Income must always be recovered from net wages.
    • Net recovery is possible until the due date determined by the Tax Administration.
  • Fringe benefits and non-monetary payments cannot be recovered in the same way as monetary wages.
  • Charges collected from income or other deductions cannot be reported as recovered.
  • If an overpayment is treated as advance pay (offsetting from wages), it must not be reported as recovered.
  • Recovery data has no impact on obligations to pay social insurance contributions.

8.1 Three examples of the treatment and reporting of overpayments

An overpayment can be recovered in three different ways:

  1. net recovery
  2. gross recovery
  3. treatment of the overpayment as advance pay (offsetting from wages)

Reporting an unjust enrichment precedes a recovery report

Reporting recovery data requires that an overpayment has been corrected as an unjust enrichment in the report of the original payment date of the income. Income cannot be reported as recovered, unless it has first been reported as an unjust enrichment.

Example 41: Payer notices that it has paid too much in wages.

An employee has been paid EUR2,200 in wages in January 2020, with 25% (EUR550) tax withheld. The employee contributions have also been collected in the normal manner. The payer has reported the wages to the Incomes Register.

Example 41, table 1/4
FIRST REPORT BEFORE THE ERROR IS CORRECTED EUR
201 Time-rate pay 2200.00
402 Withholding tax 550.00
413 Employee’s earnings-related pension insurance contribution 157.30
414 Employee’s unemployment insurance contribution 30.80

Later, the payer notices that it has overpaid EUR200 in time-rate pay. The payer carries out an additional run in the payroll system, which results in a negative amount (-200), i.e. in a EUR200 receivable from the employee in question. When an overpayment is detected, the payer must report the income as an unjust enrichment. Negative amounts cannot be reported to the Incomes Register.

The payer must correct the January report and notify the overpayment (EUR200) as an unjust enrichment. The payment date and income type reported in the original report will remain the same, but the payer must submit the ‘Unjust enrichment’ entry in connection with the income type.

The payer corrects the submitted report and marks the overpayment as an unjust enrichment.

Example 41, table 2/4
PAYER CORRECTS THE OVERPAYMENT TO AN UNJUST ENRICHMENT EUR
201 Time-rate pay 2000.00
201 Time-rate pay 200.00
Unjust enrichment: Yes  
402 Withholding tax 550.00
413 Employee’s earnings-related pension insurance contribution 143.00
414 Employee’s unemployment insurance contribution 28.00

The Unjust enrichment entry impacts the obligations to pay social insurance contributions. Based on this data, social insurance providers will then reduce the wages subject to social insurance contributions (to EUR2,000 in the example case). Other social insurance contributions will be automatically adjusted based on the replacement report, but the payer must submit an employer’s separate report to adjust the health insurance contribution according to the correct amount of wages paid (EUR2,000).

Even though the overpayment is corrected to an unjust enrichment, the income earner’s taxable income will remain at EUR2,200, and the amount of withholding at EUR550 according to the actual amount withheld.

Because the pay subject to social insurance contributions is reduced, the employee’s earnings-related pension insurance and unemployment insurance contributions reported to the Incomes Register must also be corrected. The payer may reduce the amounts of the employee contributions when reporting the unjust enrichment or, alternatively, when reporting the recovered income. If the recovery does not take place until the following calendar year, the amounts of the employee contributions must be corrected already when reporting the unjust enrichment. The payer may also return the excessive employee contributions collected to the income earner or collect a lower amount of contributions during the next payment of wages but still report the income as if the contributions were collected from the income in a normal manner.

The reporting of an unjust enrichment has no impact on the amount of withholding carried out.

8.1.1 Net recovery

Net recovery means that the payer recovers the overpayment, from which they have first deducted the share of withholding carried out on the original payment date.Even then, the overpayment must be reported to the Incomes Register according to the original amount, without deducting the share of withholding from the total amount.

The income can be recovered from the income earner as a net amount if the income is repaid during the same year or at the beginning of the following year by the date determined by the Tax Administration (30April). This ensures that the Tax Administration can access the data before the person’s tax assessment is completed, and the withholding will not be accredited to the income earner in taxation. The Tax Administration will allocate the withholding correction to the payer’s withholding obligations for the original payment month.

Example 41(continued): The payer recovers the overpayment by using the net recovery method.

The employee agrees with the income earner that it will recover the overpayment of EUR200 in connection with the February wage payment. The income earner’s normal pay for February is EUR2,000. The EUR200 overpayment made in January is collected from the wages as a net amount.

Between the two wage payments, the employee has received a new tax card, and their withholding rate is now 20%.

Example 41, table 3/4
INCOME IS RECOVERED AS A NET AMOUNT EUR
201 Time-rate pay 2000.00
201 Time-rate pay 200.00
Recovery:Yes  
402 Withholding tax(20% from EUR 2,000) 400.00
413 Employee’s earnings-related pension insurance contribution(from EUR 2,000) 143.00
414 Employee’s unemployment insurance contribution(from EUR 2,000) 28.00

Additional recovery details:

 
Recovery date: 15.2.20xx  
Withholding from the recovered amount
(25% from EUR200, withholding for January)
50.00

Original pay period: 1.1.–31.1.20xx

The original payment date: 15.1.20xx

 

The ‘Withholding from the recovered amount’ entry impacts the employer’s withholding obligation. Based on the entry, the employer’s obligations for the tax period will reduce (by EUR50 in the example case). Correspondingly, the income earner’s income for the tax year in question will reduce by EUR200 and withholdings accredited to the income earner by EUR50. Recovery data has no impact on obligations to pay social insurance contributions. In the example case, the social insurance contributions are determined on the basis of EUR2,000.

In the example, the income earner’s income after taxes and employee contributions totals EUR1,429: EUR2,000 (gross income) – EUR400 (20% withholding) – EUR171 (employee contributions). The recovery is carried out from the net wages: EUR200 (overpayment, gross) – EUR50 (25% withholding) = EUR150 (recovered amount). This means that the income earner will be paid EUR1,279 (EUR1,429 – EUR150).

8.1.2 Gross recovery

Gross recovery means that the overpayment is recovered from the income earner as a gross amount. The payer recovers the amount paid to the income earner, plus the original withholding carried out from the income. In gross recovery, the payer can, for example, send an invoice to the income earner, or recover the overpayment at a later date from the net wages paid to the income earner. Payers can use gross recovery even if net recovery was also possible.

Example 41(continued): The payer recovers the overpayment by using the gross recovery method.

The employee agrees with the income earner that it will recover the overpayment of EUR 200 in connection with the February wage payment. The January overpayment is recovered as a gross amount.

The amount of the income earner’s wages in February is EUR 2,000. Between the two wage payments, the employee has received a new tax card, and their withholding rate is now 20%.

Example 41, table 4/4
INCOME IS RECOVERED AS A GROSS AMOUNT EUR
201 Time-rate pay 2000.00
201 Time-rate pay 200.00
Recovery:Yes  
402 Withholding tax (20% from EUR 2,000) 400.00
413 Employee’s earnings-related pension insurance contribution (from EUR 2,000) 143.00
414 Employee’s unemployment insurance contribution (from EUR 2,000) 28.00

Additional recovery details:

Recovery date: 15.2.20xx

Original pay period: 1.1.–31.1.20xx

The original payment date: 15.1.20xx

 

In the example, the income earner’s income after taxes and employee contributions totals EUR1,429: EUR2,000 (gross income) – EUR400 (20% withholding) – EUR171 (employee contributions). The recovery is carried out from the net wages. This means that the income earner will be paid EUR1,229 (EUR1,429 – EUR200).

The employer’s obligations for January will not be reduced. The income earner’s taxable income will be reduced by EUR200, but the amount of withholding will remain the same.

In terms of reporting, the difference between gross and net recovery is that in gross recovery, the payer must not report the Withholding from the recovered amount entry.

8.1.3 Offsetting from wages, i.e. treating the overpayment as advance pay

The payer can also correct the overpayment made in the Incomes Register without treating the payment as an unjust enrichment. In such a case, the payer treats the overpayment as advance payment and offsets it during the next payment of wages after noticing the error. In other words, the payer deducts the overpayment from the next gross wages. Treating an overpayment as advance pay is only permitted if the overpayment can be recovered in full during the next payment of wages.

If an overpayment is offset during the next payment of wages, an unjust enrichment or recovery must not be reported.

However, treating the overpayment as advance payment (or offsetting from gross wages) is not recommended. The procedure is described in more detail in Section4.8.

Example 42: Offsetting from wages, i.e. processing an overpayment as advance pay. This procedure may only be applied during the next payment of wages after noticing the error.

The employer recovers the EUR200 overpayment made in January by offsetting the amount from the gross wages paid in February. The income earner’s normal pay for February is EUR2,000, but in this case, the payer deducts the overpayment of EUR200 from the gross wages and only pays EUR1,800 to the income earner, less the withholding and employee contributions for February.

In this case, the employer must not report an unjust enrichment for January or submit data regarding the recovery.

Example 42
OFFSETTING FROM WAGES EUR
201 Time-rate pay 1800.00
402 Withholding tax (20% from EUR 1,800) 360.00
413 Employee’s earnings-related pension insurance contribution (from EUR 1,800) 128.70
414 Employee’s unemployment insurance contribution (from EUR 1,800) 25.20

In the example, the income earner’s income after taxes and employee contributions totals EUR1,286.10: EUR1,800 (gross income) – EUR360 (20% withholding) – EUR153.90 (employee contributions).

The employer’s obligations for January will remain unchanged. The income earner’s taxable income for February totals EUR 1,800.