Correcting data in the Incomes Register
- Date of issue
- 12/4/2023
- Record no.
- VH/6565/00.01.00/2023
- Validity
- 1/1/2024 - 12/31/2024
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. A summary of the general principles applied to the correcting of data is provided at the end of these instructions. The main correction principles are described under Correcting data in the Incomes Register. There are also brief instructions on the reporting of unjust enrichments and recovered payments as well as the correction of fringe benefits.
Correcting data in business restructuring situations is described in Section 3 of the instructions Reporting data to the Incomes Register: business restructuring. Correcting employment relationship data is described in Section 14 of the instructions Reporting data to the Incomes Register: employment relationship data, and correcting absence data is described in Section 6 of the instructions Reporting data to the Incomes Register: absence data.
These instructions replace the previous ‘Correcting data in the Incomes Register’ instructions. We have made the following additions and clarifications to the instructions:
- Added references to instructions that describe how to correct absence and employment relationship data and how to correct data after business restructuring to the beginning of the instructions.
- Complemented the guidance in Section 1.1 for cancelling the entire record.
- Complemented the guidance in Section 2.3 for adjusting tax at source.
- Added new Section 2.2.4, Not following a payment ban issued by the enforcement authority.
- Changed Section 3.1.3 to Section 3.2. As a result of the change in the header level, references to sections have been corrected. In addition, added new income type “Earnings from work paid by a JuEL employer which the individual performing the work invoices through an invoicing service company” added to the section regarding income types for which an unjust enrichment cannot be reported.
- Added new Section 3.2.1 on correcting fringe benefits retroactively and related examples.
- Complemented Example 43 in Section 4.9.
- Section 4.11, Recovery of fringe benefits, changed to Section 3.2.2.
- Complemented instructions in Section 7.1 for adjusting the employer’s health insurance contribution.
Otherwise these instructions are similar in outline to the earlier instructions.In the examples in the guide, the employee’s earnings-related pension insurance contributions and unemployment insurance contributions are at the 2023 level. The amounts in force for each year can be found under insurance information. In the examples, the amount of the employee’s earnings-related pension insurance contribution is the rate used for those aged under 53 and over 62.
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. It is recommended that the payer only correct any incorrect reports. There is no need to submit the entire record again.
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 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 due to appeal deadlines or time periods taken into consideration in the granting of benefits, for example.
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 data by cancelling the previous report and then resubmitting the report with the correct data. The cancellation of data is described in Section 5. Section 6 describes cases where a replacement report cannot be used, requiring the previous data to be cancelled first. In these cases as well, it is recommended that corrections be made by only cancelling any incorrect reports. If the entire record is cancelled and a new record is submitted, new reports will not be directly allocated to the cancelled reports.
Payments made on 1 January 2019 and later, and any corrections to be made to such data, are reported to the Incomes Register (see Section 1.7, ‘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.
In some cases, the interpretation of the nature of the income or the nature of the work may only change later due to a court decision, for example. The interpretation may change from wages to non-wage compensation for work or vice versa, for example. In such a case, the submitted reports must be corrected to reflect the correct nature of the income.
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 report (i.e. the ‘new report’).
Using the version number when correcting data is not mandatory, but it is recommended. . If a version number has been used in a replacement report, the Incomes Register will verify that the version is the most recent version of the report in the Incomes Register. If the payer attempts to substitute an outdated version of a report or a cancelled report, the Incomes Register will reject 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 previous years be separately corrected according to the instructions of the data user in question. If necessary, the payer must contact the customer service of each data user.
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 EUR 2,500 as monthly wages.
The payer reports the following data in an earnings payment report:
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 (TK10) 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: nn-nnnnnnnT Start date of the employment: 01.01.2010 |
|
INCOME TYPE DETAILS | EUR |
201 Time-rate pay | 2500.00 |
235 Overtime compensation 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 |
150.00
|
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) | 37.50 |
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 values.
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.
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 (TK10) 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: nn-nnnnnnnT Start date of the employment: 01.01.20xx |
|
INCOME TYPE DETAILS | EUR |
201 Time-rate pay (or some other income type of pay) Earnings period*: 01.01–31.01.20xx |
3730.00 |
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) | 40.95 |
* 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.
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 (TK10) 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: nn-nnnnnnnT 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 | 40.95 |
* 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:
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 (TK10) 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: nn-nnnnnnnT 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) | 30.00 |
- 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:
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 (TK10) 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: nn-nnnnnnnT 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 | 30.00 |
Example 4: Income is corrected due to a sick leave
The income earner’s employment relationship started in May. They were paid EUR 4,000 in wages for May.
The wages paid are reported to the Incomes Register according to the amount paid.
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 (TK10) 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: nn-nnnnnnnT 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) | 60.00 |
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 (EUR 1,000) as partial pay during sick leave (EUR 500) and the remaining 50% as an overpayment, i.e. an unjust enrichment (EUR 500). Reporting an unjust enrichment is described in more detail in Section 3.
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 (TK10) 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: nn-nnnnnnnT Start date of the employment: 01.01.20xx |
|
INCOME TYPE DETAILS | EUR |
201 Time-rate pay | 3000.00 |
201 Time-rate pay Unjust enrichment: Yes |
500.00 |
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) | 52.50 |
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.
The payer reports the information and does not notice the mistake before submitting the report:
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 (TK10) 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: nn-nnnnnnnT 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) | 30.00 |
- 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:
REPLACEMENT REPORT 1 | |
---|---|
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 (TK10) 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: nn-nnnnnnnT 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 | 30.00 |
Later, the payer notices having reported the income earner's occupational class incorrectly. The payer must correct the report it submitted:
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 (TK10) 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: nn-nnnnnnnT 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 | 30.00 |
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:
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):
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:
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 (TK10) 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: nn-nnnnnnnT Start date of the employment: 01.01.20xx |
|
INCOME TYPE DETAILS | EUR |
201 Time-rate pay Earnings period*: 01.04.–30.04.20xx |
3000.00 |
402 Withholding tax | 750.00 |
413 Employee's earnings-related pension insurance contribution | 214.50 |
414 Employee's unemployment insurance contribution | 45.00 |
* 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.
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 (TK10) 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: nn-nnnnnnnT Start date of the employment: 01.01.20xx |
|
INCOME TYPE DETAILS | EUR |
201 Time-rate pay Earnings period*: 01.09.–30.09.20xx |
3000.00 |
235 Overtime compensation Earnings period*: 01.04.–30.04.20xx |
500.00 |
332 Capital income payment Earnings period*: 01.04.–30.09.20xx |
50.00 |
402 Withholding tax | 875.00 |
413 Employee's earnings-related pension insurance contribution (from EUR 3,500) | 250.25 |
414 Employee's unemployment insurance contribution (from EUR 3,500) | 52.50 |
* The earnings period is voluntarily submitted, complementary additional data.
2.2.2 Amount of income paid was too large
The reporting and recovery of overpayments are described in Sections 3 and 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 values, i.e. values with minus signs. Thus reimbursements collected from fringe benefits cannot be reported to the Incomes Register as negative values.
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.
However, in certain cases, a refund paid to an income earner is not reported as taxable income to the Incomes Register. This is the case 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. When the payer refunds such income to the income earner, the correction can be made in either of the following ways:
- The payer corrects the original report and deletes the overcharged compensation.
- The payer reports the amount refunded in the next pay period’s report. The refund is reported as part of the net wages under income type 406 Wages to be paid.
Example 8: Crediting an income earner for a collected reimbursement
The payer has unduly withheld a parking fee of EUR 50 from the income earner’s net wages of EUR 2,000 and reported the withheld amount under income type 408 Other item deductible from net wage or salary.
The excessive amount was refunded to the income earner with the next pay after the error was discovered. There are two ways to correct the excessive amount in the Incomes Register:
- The payer can correct the original report and delete the amount unduly withheld, i.e. the amount declared under income type 408. The item can be deleted either by correcting the reported amount to zero or by deleting the income type altogether.
- The payer may report the amount credited in the report for the next pay period: in this case, the payer reports the total amount of the wages received by the income earner, i.e. EUR 2,050, under income type 406 Wages to be paid.
If the data in this example case had not been reported to the Incomes Register yet, the unduly deducted amount would not be reported to the Incomes Register at all.
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.Other aspects of the correction of fringe benefits are discussed in Section 3.2
2.2.4 Not following a payment ban issued by the enforcement authority
If the payer receives a payment ban concerning the income earner from the National Enforcement Authority of Finland, the payer must reduce the garnished amount from the income paid to the income earner in accordance with the payment ban. The garnished amount is calculated from the income earner’s net income. A payment ban imposed by the National Enforcement Authority of Finland is binding and determines the amount to be paid for enforcement from the income earner’s wages.
If the payer does not comply with a payment ban it has received, an amount equalling the amount to be paid for enforcement can be distrained from the payer. In these situations, the payer pays an amount equalling the amount to be paid for enforcement to the National Enforcement Authority of Finland on the income earner’s behalf. As the amount is taxable income for the income earner, it must be converted into gross income for tax withholding purposes. The amount paid on the income earner’s behalf must be reported to the Incomes Register by submitting an earnings payment report.
- If the payer does not later recover the amount from the income earner, the amount converted into gross income is reported using the income type Other fringe benefit (317).
- If the payer later recovers the amount from the income earner, the amount converted into gross income is reported using the income type Unjust enrichment (359). In addition, when the payment is later recovered, a report on recovery must be submitted.
Example 9: The payer does not recover the amount from the income earner
The employer has received a payment ban concerning an income earner, but has accidentally ignored it. The employer should have distrained EUR 800 from the employee’s net wages. The employer later notices the error, but decides not to recover the amount from the employee because it was the employer’s mistake. The employer pays EUR 800 to the National Enforcement Authority of Finland from its own assets. The employer calculates the amount of gross income from the amount subject to the payment ban. Based on the employee’s tax rate, the amount of gross wages is EUR 1,000. The employer must report the information as follows:
NEW REPORT | |
---|---|
Type of action: New report | |
Payer’s report reference: 20xx04300935 | |
PAY PERIOD | |
Date of payment: 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: nn-nnnnnnnT Start date of the employment: 01.01.20xx |
|
INCOME TYPE DETAILS | EUR |
317 Other fringe benefit | 1000.00 |
402 Withholding tax | 200.00 |
417 Distraint | 800.00 |
Example 10: The payer recovers the amount from the income earner
The employer has received a payment ban concerning an income earner, but has accidentally ignored it. The employer should have distrained EUR 800 from the employee’s net wages. The employer first pays EUR 800 to the National Enforcement Authority of Finland from its own assets, but decides to recover the amount from the income earner. The employer converts the amount paid to the National Enforcement Authority of Finland into gross income. Based on the employee’s tax rate, the amount of gross wages is EUR 1,000. The employer must report the information as follows:
NEW REPORT | |
---|---|
Type of action: New report | |
Payer’s report reference: 20xx04300936 | |
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 |
359 Unjust enrichment | 1000.00 |
402 Withholding tax | 200.00 |
417 Distraint | 800.00 |
When the employer later recovers the amount from the income earner as gross recovery, the employer reports data about recovery as follows:
INCOME TYPE DETAILS | EUR |
---|---|
359 Unjust enrichment Recovery: Yes Additional recovery details: Recovery date: 10.5.20xx Original pay period: 01.04.–30.04.20xx Original payment date: 30.04.20xx |
1000.00 |
Read more about the reporting of recovery in Section 4.
2.3 Correcting withholding 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.
Withholding tax can only be corrected in conjunction with later paydays during the same calendar year. If the calendar year changes, the payer cannot correct partially or entirely non-withheld tax or return any excessive amount of tax withheld.
The payer can adjust tax at source in accordance with the same procedures as have been presented in this section regarding the adjustment of withholding tax. If an income earner works or resides in another Nordic country, the payer cannot however adjust tax at source on their own initiative. Read more in the Finnish Tax Administration’s instructions Taxation of work abroad, Section 7.3.1 Employer’s general obligations in situations involving an employee working in a Nordic country.
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 11: Correcting too large an amount of tax withheld by withholding a lower amount of taxes at a later date
On 30 August 2022, 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 Section 7 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 of withheld tax returned as a negative amount on an earnings payment report. 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 12: 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.
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 13: 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 values 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 value in 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 3.3.).
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 earnings-related 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 14: 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:
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 Type of insurance information: Subject to social insurance contributions: Grounds for insurance contribution: No |
2500.00 |
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) | 30.00 |
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:
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) | 30.00 |
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 4.9.
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 3.2
There are also some income types that are corrected in the next report. These income types are also discussed in Section 3.2.
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 excessive amount.
An unjust enrichment must be reported without undue delay and no later than within one month of becoming aware of the unjust enrichment.
An unjust enrichment is reported when the payer separately collects an overpayment from the income earner. If an overpayment is corrected in connection with the following wage payment 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 Section 4.9. ‘Treating an overpayment as advance pay’). It should be noted, however, that treating an 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 is used as the grounds for benefits.
An unjust enrichment must always be reported when the payment of the unjust enrichment leads to its being separately recovered from the income earner instead of the payer setting off the overpayment from the next wage payment. 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. An unjust enrichment must be reported even if the overpayment cannot be recovered from the income earner.
An 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, an 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 (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 as an unjust enrichment. Recovery is discussed in Section 4. An unjust enrichment can be 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 15: 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:
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 16: 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 3.3).
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) | 46.50 |
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 17: 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.
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 Earnings period*: 10.08.20xx–31.08.20xx |
5000.00 |
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) | 75.00 |
* 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.
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 Earnings period*: 10.08.20xx–31.08.20xx |
3000.00 |
201 Time-rate pay Unjust enrichment: Yes Earnings period*: 10.08.20xx–31.08.20xx |
2000.00 |
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) | 45.00 |
* 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 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 tax withheld from the income earner is reported in a replacement report, in the amount in which it was originally withheld from the income earner.
The payer must remember to correct the information in 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 18: 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.
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 Earnings period: 01.10.20xx–31.10.20xx |
2670.00 |
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) | 40.05 |
The payer corrects the incorrect information submitted using a replacement report:
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 Unjust enrichment: Yes Earnings period*: 01.10.20xx–31.10.20xx |
2670.00 |
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 3.3.
* 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 19: 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.
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) | 40.50 |
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.
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 Unjust enrichment: Yes |
900.00 |
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) | 27.50 |
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 20: 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.
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 Type of insurance information: Subject to social insurance contributions: Grounds for insurance contribution: No |
5000.00 |
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) | 60.00 |
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.
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 Type of insurance information: Subject to social insurance contributions: Grounds for insurance contribution: No |
4200.00 |
101 Total wages Type of insurance information: Subject to social insurance contributions: Grounds for insurance contribution: No Unjust enrichment: Yes |
800.00 |
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) | 60.00 |
Example 21: 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 (EUR 2,500) in the normal manner, and the employee’s earnings-related pension and unemployment insurance contributions have been collected (from EUR 2,000) from the income earner.
The employer does not notice the error before submitting the report, and submits the report according to what was paid.
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 Type of insurance information: Subject to social insurance contributions: Grounds for insurance contribution: No |
2500.00 |
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) | 30.00 |
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.
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 Type of insurance information: Subject to social insurance contributions: Grounds for insurance contribution: No |
2300.00 |
101 Total wages Type of insurance information: Subject to social insurance contributions: Grounds for insurance contribution: No Unjust enrichment: Yes |
200.00 |
103 Total wages subject to social insurance contributions | 1800.00 |
103 Total wages subject to social insurance contributions Unjust enrichment: Yes |
200.00 |
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) | 27.00 |
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 22: 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.
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 Type of insurance information: Subject to social insurance contributions: Grounds for insurance contribution: No |
5400.00 |
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) | 72.00 |
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.
3.2 Correction for the original period without data about an unjust enrichment, e.g. fringe benefits
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. Furthermore, this type of income cannot be reported as recovered. 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 an 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 and recovery entries.
- Fringe benefits and non-monetary benefits and payments (code values 301, 302, 304, 317, 330, 334, 341, 342, 363, 364): 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 and recovery entries. The recovery of fringe benefits from monetary wages is described in more detail in Section 3.2.2.
- Wages for insurance purposes (code value 352): The treatment fee for a municipal veterinarian (code value 312) and earnings from work paid by a JuEL employer which the individual performing the work invoices through an invoicing service company (code value 369) are not money actually paid to the income earner, and cannot thus be overpayments for which the unjust enrichment and recovery entries 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). The unjust enrichment and recovery entries cannot be linked to an employee stock option even if the employee stock option is paid in money.
- In addition to the non-monetary benefits mentioned above, tax-exempt reimbursements 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 the reimbursements of expenses paid to an income earner exceed the values confirmed in the decision of the 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 and which can be recovered).
Example 23: A tax-exempt reimbursement of expenses changes into an overpayment and is recovered
An income earner has been paid a tax-exempt daily allowance of EUR 51 per day for five days, or EUR 255 in total. They should only have been paid for three days, i.e., the income earner was paid EUR 102 too much. The correct amount, EUR 153, must be reported as tax-exempt daily allowances using 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’. 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 an unjust enrichment and can later be recovered from the income earner.
FIRST REPORT BEFORE THE ERROR IS CORRECTED | EUR |
---|---|
331 Daily allowance Type of daily allowance: Full daily allowance |
255.00 |
THE PAYER CORRECTS THE OVERPAYMENT AS AN UNJUST ENRICHMENT | EUR |
---|---|
331 Daily allowance Type of daily allowance: Full daily allowance |
153.00 |
201 Time-rate pay Unjust enrichment: Yes |
102.00 |
If, in the example case, the income earner had been paid other income subject to withholding and social insurance contributions at the same time, the withholding and the employee’s earnings-related pension and unemployment insurance contributions must have been reported according to the collected amounts, even if the amount of wages was higher on the replacement report. 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.
The unjust enrichment and recovery entries 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. Entries deducted from income are reported to the Incomes Register on the report for the payment date on which the deduction from income was made. If deductible entries need to be corrected, the corrected data is reported to the Incomes Register when the payer has adjusted the amounts, usually with the next report for the next pay period, when adjusting withholding or employee contributions, for example. In some cases, the payer may also correct the original payment date report if, for example, the amount withheld from the net wages is corrected. An exception to this are corrections of reimbursements collected for fringe benefits, because the collected reimbursement must be reported on the same report as the fringe benefits even if the reimbursement is collected in advance or retroactively. 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. Also see the instructions in Section 2.2.3, ‘Crediting an income earner for a collected reimbursement’.
The income types and their descriptions can be found on page Wage income types and in the ‘Wages – Descriptions of income types and items deducted from income’ document.
3.2.1 Retrospective changes in fringe benefits
In certain situations, a fringe benefit may have been left completely unreported, the amount of the benefit may have been incorrect, or the benefit may have been reported even though it has no longer been available to the income earner. In these situations, the report submitted to the Incomes Register must be corrected.
If a fringe benefit was completely left unreported with wages, the report submitted earlier for the same month must be corrected by submitting a replacement report. The missing fringe benefit must be added to the report according to the amount that was available to the income earner. The previously withheld amount or the amounts of previously collected employee contributions are not changed.
Alternatively, the payer can submit a new report for the month, in which only the amount of the fringe benefit is reported. This can be done, for example, if no wages were paid for the month, and no previous report exists. In both cases, the fringe benefit must be reported using the 300-series income types intended for fringe benefits.
The payer can adjust any too small an amount withheld in conjunction with a later payment of wages during the same calendar year, see Section 2.3.2. For more information about the adjustment of too small employee contributions, see Section 3.3.1.2.
Example 24: The income earner was paid EUR 3,000 in monetary wages, of which the payer withheld EUR 750 in tax. Employee contributions were also collected based on monetary wages. It is later found out that the income earner had access to a company car benefit during the month. First report before the error is detected:
NEW REPORT | |
---|---|
Type of action: New report | |
Payer’s report reference: 20xx09161955 | |
PAY PERIOD | |
Date of payment: 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 Earnings period: 10.08.20xx–31.08.20xx |
3000.00 |
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) | 45.00 |
At the beginning of the next month, payroll accounting finds out that the employee already had access to a company car benefit of age group A, totalling EUR 630 in value, during the previous month. No information about the benefit was available when the month’s wages were paid and the relevant report was submitted. The payer corrects the previous report and submits the data as follows:
REPLACEMENT REPORT | |
---|---|
Type of action: Replacement report | |
Payer’s report reference: 20xx09161955 | |
Report version number: 1 (complementary data) | |
PAY PERIOD | |
Date of payment: 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 Earnings period: 10.08.20xx–31.08.20xx |
3000.00 |
304 Car benefit Type of company car benefit: Full car benefit |
630.00 |
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) | 45.00 |
The payer may adjust the too small amount withheld (at most 10% of the paid amount without the employee’s consent) and the too small employee contributions collected in conjunction with next wages.
If too high a value has been reported for a fringe benefit, i.e. more fringe benefits have been reported than what has been paid or the benefit has no longer been available to the employee, the report submitted previously for the same month must be corrected by submitting a replacement report. The amount of the fringe benefit must be entered correctly in the report.
If the benefit has no longer been available to the income earner, the previously reported fringe benefit must be removed from the report.
The previously withheld amount or the amounts of previously collected employee contributions are not changed or corrected. The amounts must be entered according to the amounts collected from the employee. The payer can adjust any too high an amount withheld in conjunction with a later payment of wages during the same calendar year, see Section 2.3.1. For more information about the adjustment of too high employee contributions, see Section 3.3.1.1.
Example 25: The income earner was paid EUR 4,000 in monetary wages. In addition, the income earner had an accommodation benefit of EUR 1,000. The payer withheld EUR 1,250 (from EUR 5,000). Employee contributions were also collected based on EUR 5,000. It is later found out that the income earner’s residence was replaced by a smaller company residence during the month. First report before the error is detected:
NEW REPORT | |
---|---|
Type of action: New report | |
Payer’s report reference: 20xx09161955 | |
PAY PERIOD | |
Date of payment: 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 Earnings period: 10.08.20xx–31.08.20xx |
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) | 75.00 |
During the next month, payroll accounting finds out that the income earner’s residence was replaced by a smaller company residence at the beginning of the previous month. The value of the new company residence is EUR 600. The payer corrects the previous report and submits the data as follows:
REPLACEMENT REPORT | |
---|---|
Type of action: Replacement report | |
Payer’s report reference: 20xx09161955 | |
Report version number: 1 (complementary data) | |
PAY PERIOD | |
Date of payment: 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 Earnings period: 10.08.20xx–31.08.20xx |
4000.00 |
301 Accommodation benefit | 600.00 |
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) | 75.00 |
The payer may adjust the too high amount withheld and the too high employee contributions collected by deducting smaller amounts from the next wages (in October).
3.2.2 Recovery of fringe benefits from monetary wages
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. The fringe benefit cannot be an unjust enrichment, because the person has had access to the benefit during that time (see Section 3.2.1, Retrospective changes in fringe benefits).
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 26: 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 EUR 1,000 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.
REPLACEMENT REPORT ON THE UNJUST ENRICHMENT BEFORE THE FRINGE BENEFIT IS RECOVERED | |
---|---|
Type of action: Replacement report | |
Payer’s report reference: 20xx09161955 | |
PAY PERIOD | |
Date of payment: 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 Unjust enrichment: Yes |
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 1,000) | 71.50 |
414 Employee’s unemployment insurance contribution (from EUR 1,000) | 15.00 |
When paying the wages (EUR 4,000 in time-rate pay and EUR 1,000 in accommodation benefit) for the pay period following the detection of the mistake, the payer recovers the share of the fringe benefit (EUR 1,000) by submitting the ‘Reimbursement collected form a fringe benefit’ entry in the report:
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 | |
Date of payment: 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 Earnings period: 10.10.20xx–31.10.20xx* |
4000.00 |
301 Accommodation benefit | 1000.00 |
402 Withholding tax (from EUR 4,000) | 1000.00 |
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) | 60.00 |
* The earnings period is complementary additional data.
Example 27: Partial recovery of fringe benefits
The amount of the income earner’s wages is EUR 5,000. The amount consists of EUR 4,000 in time-rate pay and EUR 1,000 in accommodation benefit, of which the employer recovers a monthly reimbursement of EUR 800. The payer recovers the entire amount of EUR 4,200 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 EUR 1,000.
ORIGINAL REPORT, WHEN THE UNPAID VACATION WAS NOT YET KNOWN | |
---|---|
Type of action: New report | |
Payer’s report reference: 20xx09161955 | |
PAY PERIOD | |
Date of payment: 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) | 63.00 |
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.
REPLACEMENT REPORT ON THE UNJUST ENRICHMENT BEFORE THE FRINGE BENEFIT IS RECOVERED | |
---|---|
Type of action: Replacement report | |
Payer’s report reference: 20xx09161955 | |
PAY PERIOD | |
Date of payment: 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 Unjust enrichment: Yes |
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 200) | 14.30 |
414 Employee’s unemployment insurance contribution (from EUR 200) | 3.00 |
In connection with the next payment of wages, the payer recovers from the employee an overpayment of EUR 1,000, of which EUR 800 concerns monetary wages and EUR 200 the fringe benefit. This means that in addition to the reimbursement of EUR 800 agreed between the parties, an overpayment of EUR 200 is collected regarding the fringe benefit.
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 | |
Date of payment: 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 Recovery: Yes |
800.00 |
301 Accommodation benefit | 1000.00 |
402 Withholding tax (from EUR 4,000) | 1000.00 |
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) | 60.00 |
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 28: Recovery of fringe benefits; no further wages are paid
An employee has been paid EUR 4,000 in wages and EUR 1,000 in accommodation benefit in September. The wages were paid, even though the employee’s employment already ended at the end of August.
FIRST REPORT BEFORE THE ERROR IS DETECTED | |
---|---|
Type of action: New report | |
Payer’s report reference: 20xx09161955 | |
PAY PERIOD | |
Date of payment: 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) | 75.00 |
The payer recovers the wages and fringe benefit (EUR 5,000 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.
REPLACEMENT REPORT ON THE UNJUST ENRICHMENT BEFORE THE FRINGE BENEFIT IS RECOVERED | |
---|---|
Type of action: Replacement report | |
Payer’s report reference: 20xx09161955 | |
PAY PERIOD | |
Date of payment: 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 | euroa |
201 Time-rate pay Unjust enrichment: Yes |
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 1,000) | 71.50 |
414 Employee’s unemployment insurance contribution (from EUR 1,000) | 15.00 |
Because the amount of the monetary wages for September (EUR 4,000) is not sufficient for recovering the entire overpayment (monetary wages + the fringe benefit, i.e. EUR 5,000 in total) in one instalment, the payer must also correct the earnings payment report for the previous month (August) and enter a share of EUR 1,000 of previously paid wages as an unjust enrichment.
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 | |
Date of payment: 15.08.20xx The start date of the pay period: 01.08.20xx The end date of the pay period: 31.8.20xx |
|
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 Unjust enrichment: Yes |
1000.00 |
301 Accommodation benefit | 1000.00 |
402 Withholding tax (from EUR 5,000) | 1250.00 |
413 Employee’s earnings-related pension insurance contribution (from EUR 4,000) | 286.00 |
414 Employee’s unemployment insurance contribution (from EUR 4,000) | 60.00 |
3.3 Correcting employee's social insurance contributions
3.3.1 Correcting employee's earnings-related pension and unemployment 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 in the same report in which the 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 in 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 in the report in which the recovery of the unjust enrichment is reported. This is only possible if the overpayment and its repayment take place during the same calendar year.
If the case does not involve the recovery of overpaid income, but overly large amounts of employee contributions have been collected for another reason, the contributions can also be corrected after the original wage payment year. The payer can reduce the employee contributions during a later pay period or repay the excessively withheld amount to the employee.
The correction of an employee’s health insurance contribution is described in Section 3.3. The correction of withholding is described in Section 2.3.
3.3.1.1 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. The contribution may also have been collected as an overly large amount for other reasons.
3.3.1.1.1 Overpayment of income
Often, an employee’s earnings-related pension and unemployment insurance contributions need to be corrected when income has been overpaid, and it is recovered. Usually in these cases, corrections to employee 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 Section 3.1 ‘Unjust enrichment’. Correcting employee’s earnings-related pension insurance and unemployment insurance contributions is described in Examples 18 and 19.
3.3.1.1.2 A contribution is corrected for another reason
Not all cases involve the recovery of an overpayment, but the payer may have incorrectly recovered employee contributions as an overly large amount in another situation, for example, because it has inadvertently used an incorrect payment rate or collected the contributions based on incorrect wages. The payer can, after discovering the error, reduce the income earner’s employee contributions during a later pay period and report the reduced amount on an earnings payment report.
If an overly large employee contribution cannot be subtracted from the income earner’s employee contributions for a later pay period, the excessive amount collected can be paid back to the income earner, in which case the amount can be reported as a negative number in the earnings payment report. Unlike in recovery situations, an overly large employee contribution can also be corrected after the original wage payment year, for example, during the following year.
Example 29: 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:
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 |
3.3.1.2 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 have not been collected due to an obvious error during the payment of wages, the employer can collect the contribution left uncollected during the previous payment of wages 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. The amount can also be collected from the employee and reported to the Incomes Register after the original wage payment year, for example, during the following year.
If the amount of employee contributions collected from an employee has been too small, and the employer pays them on the employee’s behalf without collecting the amount from the employee, the amount paid on the employee’s behalf must be reported on an earnings payment report as a fringe benefit. For more information, see the instructions Reporting data to the Incomes Register: fringe benefits and reimbursements of expenses, Section 1.3 ‘Other taxable fringe benefits’.
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’.
3.3.2 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 net income paid to the person (see Example 25). In this case as well, the same income type used to report the original overpayment must be used when reporting the recovered income.
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 30 April). 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, section 51(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. Net recovery may also be possible after the date set by the Tax Administration if it concerns a payment for which tax was originally collected from a non-resident taxpayer. In such a case, the Tax Administration will refund the tax at source collected to the payer if the income earner’s tax liability status during the original tax year was still non-resident taxpayer and the income earner has not submitted a request to have their tax assessment performed in accordance with the Tax Assessment Procedure Act. 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 Section 4.5). 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 30: 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.
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 Recovery: Yes Earnings period*: 10.08.20xx–31.08.20xx |
2000.00 |
Additional recovery details: Recovery date: 10.11.20xx Withholding from the recovered amount: Original pay period: 01.09.–30.09.20xx The original payment date*: 15.09.20xx |
500.00 |
* 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 Example 30, 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 31: 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 3,800 at the same time, it could have been reported in the same report as the recovery.
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 Earnings period*: 01.11.20xx–30.11.20xx |
3800.00 |
201 Time-rate pay Recovery: Yes Earnings period*: 10.08.20xx–31.08.20xx |
2000.00 |
Additional recovery details: Recovery date: 10.11.20xx Withholding from the recovered amount: Original pay period: 01.09.–30.09.20xx The original payment date*: 15.09.20xx |
500.00 |
402 Withholding tax (25% of EUR 3,800) | 1064.00 |
413 Employee's earnings-related pension insurance contribution (from EUR 3,800) | 271.70 |
414 Employee's unemployment insurance contribution (from EUR 3,800) | 57.40 |
406 Wages paid (3,800 – 1,064 – 271.70 - 57 - 1500) | 907.03 |
* 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.
In Example 31, 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 31 had been reported using reporting method 1 for monetary wages and 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. 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 4.9.
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 32: 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’, 3.3, ‘Correcting the employee’s social insurance contributions’, and 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 10th of May the same year. When the income earner pays back the overpayment, the payer (employer) reports the amount paid back to the Incomes Register:
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 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 |
900.00 |
In the above situation in Example 32, 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 33: Overpayment is recovered as a gross amount from the net wages paid to the income earner; the overpayment is collected from other income
In July, the income earner was overpaid EUR 330 in overtime compensation. The payer corrected the report submitted for July and reported the EUR 330 payment 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. Even though no overtime compensation is paid in conjunction with the wages, and the income is recovered from other wage income, the payer uses the income type of the original overpayment, i.e. overtime compensation, when reporting the recovered income. The income earner’s withholding percentage is 22.
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) Earnings period: 01.09.–15.09.20xx |
2800.00 |
235 Overtime compensation Recovery: Yes Additional recovery details: Recovery date: 15.09.20xx Original pay period: 15.07-30.07.20xx The original payment date*: 30.07.20xx |
330.00 |
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) | 42.00 |
406 Wages to be paid (2,800 – 616 – 200.20 – 42 – 330) | 1611.80 |
* 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 (EUR 2,800 – EUR 330 = EUR 2,470).
If the payment previously made in Example 33 had been reported using reporting method 1 for monetary wages and 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 when reporting the overpayment as an unjust enrichment.
If the overpayment was discovered before the report was sent and reported under the ‘Unjustified benefit’ income type, the same income type must be used to report the recovery, even if it is recovered from other income.
Example 34: Overpayment that was reported under the ‘Unjustified benefit’ income type is recovered as a gross amount from the net wages paid to the income earner; the overpayment is collected from other income
In July, the income earner was overpaid EUR 900 in overtime compensation. The error was noticed before the report was submitted. The payer reported the overpayment to the Incomes Register under the ‘Unjustified benefit’ income type (359); see Example 15.
In August, the income earner is paid their normal monthly wages of EUR 4,000. The payer and the income earner agree that the payer will recover the overpayment (EUR 900) from the income earner’s August net wages after the withholding and the collection of the employee contributions. Even though the overpayment reported using the ‘Unjustified benefit’ income type is recovered from other wage income, the payer must use the income type of the original overpayment, i.e. ‘Unjustified benefit’ (359), to report the recovered income.
NEW REPORT | |
---|---|
Type of action: New report | |
Payer's report reference: 20xx09151645 | |
PAY PERIOD | |
Payment date: 15.08.20xx The start date of the pay period: 01.08.20xx The end date of the pay period: 15.08.20xx |
|
REPORT (INCOME EARNER) DETAILS | |
Type of identifier: Personal identity code (Finnish) ddmmyy-7654 (+ other mandatory data) | |
INCOME TYPE DETAILS | EUR |
201 Time-rate pay (normal wages for the month) Earnings period: 01.08.–31.08.20xx |
4000.00 |
359 Unjust enrichment Recovery: Yes Earnings period: 01.06.–15.06.20xx* Additional recovery details: Recovery date: 15.06.20xx Original pay period: 01.06.-15.06.20xx The original payment date: 15.06.20xx* |
900.00 |
402 Withholding tax (30% from EUR 4,000) | 1200.00 |
413 Employee's earnings-related pension insurance contribution (from EUR 4,000) | 286.00 |
414 Employee's unemployment insurance contribution (from EUR 4,000) | 60.00 |
406 Wages to be paid (4,000 – 1,200 – 286 – 60 – 900) | 1554.00 |
* The earnings period is voluntarily submitted complementary data.
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 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 when reporting the overpayment as an 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 35: 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 21).
The overpayment (EUR 200) is recovered from the income earner in connection with the July wage payment. The income earner’s normal pay for July is EUR 3,000.
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 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 |
200.00 |
103 Total wages subject to social insurance contributions 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 |
200.00 |
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) | 45.00 |
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. However, this requires that all recovered overpayments have been paid on the same payment date. If a recovered amount includes overpayments paid on different dates, the payer must specify on the recovery report which part of withholding has been paid during each pay period (for more details, see Section 4.7). Correspondingly, employee contributions collected from the overpayment can be deducted from other employee contributions.
Example 36: 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 for July based on the submitted report. The payer can deduct the employee contributions (totalling EUR 50.43) 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. If the amount of employee contributions has not already been reduced on the unjust enrichment report, EUR 380.57 will be collected from the income earner. The payer reports:
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 Recovery: Yes Earnings period*: 01.07.20xx–15.07.20xx |
300.00 |
Additional recovery details: Recovery date: 10.8.20xx Withholding from the recovered amount: Original pay period: 01.07–15.07.20xx The original payment date*: 15.07.20xx |
152.00 |
235 Overtime compensation 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 |
150.00 |
236 Night work allowance Recovery: Yes |
133.00 |
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 | -8.76 |
If, in Example 36, 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. In such a case, negative values may not be reported.
* 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.
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 37: 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:
REPLACEMENT REPORT | |
---|---|
Type of action: Replacement report | |
Payer's report reference: 20xx20031955 | |
Report version number: 1 (complementary data) | |
PAY PERIOD | |
Payment date: 15.2.20xx The start date of the pay period: 1.2.20xx The end date of the pay period: 28.2.20xx |
|
INCOME EARNER DETAILS | |
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data) | |
INCOME TYPE DETAILS | EUR |
101 Total wages Earnings period: 1.2.20xx–28.2.20xx |
3160.00 |
101 Total wages Unjust enrichment: Yes Earnings period: 1.2.20xx–28.2.20xx |
1500.00 |
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) | 47.40 |
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:
NEW REPORT | |
---|---|
Type of action: New report | |
Payer's report reference: 20xx11121435 | |
PAY PERIOD | |
Payment date or other report date: 6.4.20xx The start date of the pay period: 1.4.20xx The end date of the pay period: 30.4.20xx |
|
INCOME EARNER DETAILS | |
Type of identifier: Personal identity code (Finnish) ddmmyy-9876 (+ other mandatory data) | |
INCOME TYPE DETAILS | EUR |
101 Total wages Recovery: Yes Earnings period*: 1.2.20xx–28.2.20xx Additional recovery details: Recovery date: 6.4.20xx Original pay period: 1.2-28.2.20xx The original payment date*: 15.2.20xx |
150.00 |
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 38: 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):
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 Earnings period: 01.05.20xx–31.05.20xx |
2550.00 |
216 Other compensation Unjust enrichment: Yes Earnings period: 01.05.20xx–31.05.20xx |
200.00 |
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) | 38.25 |
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.
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 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 |
100.00 |
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) | 38.25 |
* 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 39: 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) with 25% tax withheld. 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 an 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. The payment is recovered as a net amount.
Once the income earner has made the payment, the employer reports the recovery information to the Incomes Register:
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 Recovery: Yes Earnings period: 01.09.20xx–30.09.20xx* |
100.00 |
Additional recovery details: Recovery date: 15.12.20xx Withholding from the recovered amount: Original pay period: 01.09.–30.09.20xx The original payment date*: 15.09.20xx |
25.00 |
218 Working condition compensation Recovery: Yes Earnings period*: 01.10.20xx–31.10.20xx |
100.00 |
Additional recovery details: Recovery date: 15.12.20xx Withholding from the recovered amount: Original pay period: 01.10.–31.10.20xx The original payment date: 15.10.20xx |
25.00 |
218 Working condition compensation Recovery: Yes Earnings period*: 01.11.20xx–30.11.20xx |
100.00 |
Additional recovery details: Recovery date: 15.12.20xx Withholding from the recovered amount: Original pay period: 01.11.–30.11.20xx The original payment date: 15.11.20xx |
25.00 |
* 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 Net recovery becomes gross recovery
If a payer has recovered a payment from an income earner as net recovery, and the income earner repays the payment only after the date set by the Tax Administration in its decision (later than 30 April in the year following the overpayment), the Tax Administration will not adjust the payer’s tax for the tax period. In such a case, the payer may recover the uncredited part of the withholding from the income earner. As the recovery will then change from net to gross recovery, the payer must correct the recovery report previously submitted. Net recovery is changed to gross recovery by deleting from the report the data on the withholding from the recovered amount. The amount of the recovered payment must also be corrected to correspond to the amount actually recovered from the income earner. The payer must report the share of the withholding subsequently recovered to the Incomes Register when the share has been recovered.
Example 40: Overpayment is recovered as a net amount after the deadline set by the Tax Administration; net recovery changes to gross recovery
In October, the income earner was overpaid EUR 500 in wages. The payer notices the overpayment in May the following year, corrects it as unjust enrichment on the October report and recovers the payment in connection with the payment of the wages for May. The payer recovers the overpayment as net recovery. The amount withheld on the overpayment is EUR 100, which means that the payer actually recovers EUR 400 from the income earner.
The payer reports the data as follows (before being informed that net recovery is no longer possible):
NEW REPORT | |
---|---|
Type of action: New report | |
Payer's report reference: 20xx11121435 | |
PAY PERIOD | |
Payment date or other report 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 Earnings period: 01.05.20xx–31.05.20xx* |
2800.00 |
201 Time-rate pay Recovery: Yes Earnings period: 01.10.20xx–31.10.20xx* |
500.00 |
Additional recovery details: Recovery date: 15.05.20xx Withholding from the recovered amount: Original pay period: 01.10.–31.10.20xx The original payment date*: 15.10.20xx |
100.00 |
402 Withholding (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) | 42.00 |
406 Wages to be paid (2800 – 700 – 200.20 – 42 – 400) | 1457.80 |
As the deadline for net recovery set by the Tax Administration has already expired, the Tax Administration will not adjust the amount of the payer’s tax for the tax period. The payer will recover the missing EUR 100 from the income earner in June. The payer must correct the report for May and change the recovery to gross recovery. At the same time, the payer must correct the amount recovered as EUR 400. When the payer recovers the EUR 100 withheld from the income earner in June, the payer must submit a separate report.
The payer must correct the report submitted as follows and change the net recovery to gross recovery:
NEW REPORT | |
---|---|
Type of action: Replacement report | |
Payer's report reference: 20xx11121435 | |
PAY PERIOD | |
Payment date or other report 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 Earnings period: 01.05.20xx–31.05.20xx* |
2800.00 |
201 Time-rate pay Recovery: Yes Earnings period: 01.10.20xx–31.10.20xx* |
400.00 |
Additional recovery details: Recovery date: 15.05.20xx Original pay period: 01.10.–31.10.20xx The original payment date*: 15.10.20xx |
|
402 Withholding (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) | 42.00 |
406 Wages to be paid (2800 – 700 – 200.20 – 42 – 400) | 1457.80 |
The payer must report the EUR 100 withheld from the June wages as follows:
NEW REPORT | |
---|---|
Type of action: New report | |
Payer's report reference: 20xx11121436 | |
PAY PERIOD | |
Payment date or other report date: 15.06.20xx 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-9876 (+ other mandatory data) | |
INCOME TYPE DETAILS | EUR |
201 Time-rate pay Earnings period: 01.06.20xx–30.06.20xx* |
2800.00 |
201 Time-rate pay Recovery: Yes Earnings period: 01.10.20xx–31.10.20xx* |
100.00 |
Additional recovery details: Recovery date: 15.06.20xx Original pay period: 01.10.–31.10.20xx The original payment date: 15.10.20xx |
|
402 Withholding (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) | 42.00 |
406 Wages to be paid (2800 – 700 – 200.20 – 42 – 100) | 1757.80 |
4.9 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. It should be noted that the Employment Contracts Act (55/2001) restricts the employer’s right to set off overpayments in certain situations.
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 41: 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.
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 Earnings period*: 01.10-15.10.20xx |
2100.00 |
402 Withholding tax | 420.00 |
413 Employee’s earnings-related pension insurance contribution | 150.15 |
414 Employee’s unemployment insurance contribution | 31.50 |
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 42: 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.
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 Earnings period: 01.02–28.02.20xx* |
3400.00 |
235 Overtime compensation Earnings period: 15.02-20.02.20xx* |
400.00 |
402 Withholding tax | 954.00 |
413 Employee's earnings-related pension insurance contribution | 271.70 |
414 Employee's unemployment insurance contribution | 57.00 |
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:
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 Earnings period*: 01.02.–28.02.20xx |
3600.00 |
235 Overtime compensation Earnings period*: 15.02.–20.02.20xx |
200.00 |
402 Withholding tax | 954.00 |
413 Employee’s earnings-related pension insurance contribution | 271.70 |
414 Employee’s unemployment insurance contribution | 57.00 |
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:
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 Earnings period*: 01.03-31.03.20xx |
3200.00 |
402 Withholding tax | 848.00 |
413 Employee's earnings-related pension insurance contribution | 228.80 |
414 Employee's unemployment insurance contribution | 48.00 |
* The earnings period is complementary additional data.
Example 43: Negative balance in working time bank is offset against the holiday compensation at the end of the employment relationship
The income earner has flexible working hours and at the end of the employment relationship, the flexible balance shows minus 10 hours, which is allowed. In connection with the final wage payment, the income earner is paid a holiday compensation, but no other monthly wages.
The payer and the income earner agree that the negative balance of the working time bank will be treated as advance pay paid to the income earner which will be deducted from the final wage payment of EUR 1,000 (the holiday compensation). The payer offsets the EUR 300 overpayment paid as time-rate pay and reports to the Incomes Register a holiday compensation of EUR 700.
As the payer offsets the payment from another income type, the original report must be corrected and the overpayment must be marked as the same income type from which the overpayment is offset.If it is known when the negative balance in the working time bank was accrued, the correction must be made in the earnings payment report that concerns that period. If it is not known when the negative balance in the working time bank was accrued, the payer will correct the last report that reported time-rate pay. On this report, the payer converts EUR 300 of the time-rate pay into a holiday compensation, as in the previous example.
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.
4.10 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 44: 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 wages paid and the recovery of an overpayment have 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 enter the overpayment (EUR 300) as an unjust enrichment. All data in the original report must be resubmitted, including the recovery details:
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 Earnings period*: 16.09.–30.09.20xx |
2700.00 |
227 Contract pay Unjust enrichment: Yes Earnings period*: 16.09.–30.09.20xx |
300.00 |
227 Contract pay 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 |
150.00 |
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) | 40.05 |
*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.
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 Section 6.4.
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 ‘Cancel. 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 also provide the report’s version number. The version number is voluntarily submitted, complementary additional data.
When cancelling an entire record, the record reference of the record in question must be used.
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; for more details, see Section 6.4.
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 45: 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:
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 (TK10) 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: nn-nnnnnnnT |
|
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 | 52.50 |
- 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.
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:
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 (TK10) 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: nn-nnnnnnnT |
|
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 | 52.50 |
6.2 Correcting customer identifiers, pension policy numbers and insurance policy numbers
If the income earner’s or the payer’s customer identifier or date of birth, or an identifier related to insurance 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.
The payer must always contact the Incomes Register Unit and the payer’s pension company
after cancelling a report if an incorrect identifier of the payer, income earner or actual employer was used in the submitted report. The Incomes Register Unit will ensure that the report submitted using an incorrect identifier is made unavailable in the e-service.
If a foreign person later receives a Finnish personal identity code, the personal identity code is reported in the next report submitted after the change. Correspondingly, if the person’s sex changes, the new identifier is reported in 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 this data, see Example 45 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 the ‘No obligation to provide insurance’ entry
- Retroactive changes to the ‘Not subject to Finnish social security’ entry
- Changes to the ‘Voluntary insurance in Finland (earnings-related pension insurance)’ entry.
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 46: 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.
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 (TK10) 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: nn-nnnnnnnT 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 | 69.00 |
- 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.
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.
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) |
|
INCOME TYPE DETAILS | EUR |
201 Time-rate pay | 4600.00 |
402 Withholding tax | 1150.00 |
In Example 46, 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 68,57,per month in 2024) 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 47: 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:
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.
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.
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 6:00 p.m. may in some isolated cases be recorded for different days. Due to this, you should submit your reports either before 4:00 p.m. or after 6:00 p.m.
In certain cases, reports submitted through the technical interface are sent from software to the Incomes Register in stages or, for example, once a day. If the payer cancels a report or submits a new report directly in their payroll system through the technical interface, the payer must ensure that the software sends the report immediately after submitting the report. As a result, the payer ensures that the reports are not divided between different dates.
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. Read more about the payment of unprompted tax refunds at vero.fi/en.
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 48: 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.
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 |
|
INCOME TYPE DETAILS | EUR |
102 Employer's health insurance contribution (total) | 62.98 |
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.
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 |
|
INCOME TYPE DETAILS | EUR |
102 Employer's health insurance contribution (total) | 62.98 |
103 Deductions to be made from the employer's health insurance contribution | 16.08 |
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 in 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 data, including the data that was correct, must be resubmitted. The payer must correct the employer’s separate report for the period, for which the earnings payment report was corrected.
Example 49: 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.
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 |
|
INCOME TYPE DETAILS | EUR |
102 Employer's health insurance contribution (total) | 67.00 |
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:
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 |
|
INCOME TYPE DETAILS | EUR |
102 Employer's health insurance contribution (total) | 40.20 |
The overpayment of the employer’s health insurance contribution must primarily be corrected in the original period, but the correction can also be allocated to the current period. In this case, the previous period’s overpayment will be directly deducted from the employer’s health insurance contribution which was calculated from the current period’s wages. The payment is reported using income type 102. In this case, the payer does not receive any credit interest, which they would receive if the correction were allocated retroactively to the original period.
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:
- net recovery
- gross recovery
- 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 50: Payer notices that it has paid too much in wages
An employee has been paid EUR 2,200 in wages in January 2020, with 25% (EUR 550) tax withheld. The employee contributions have also been collected in the normal manner. The payer has reported the wages to the Incomes Register.
FIRST REPORT BEFORE THE ERROR IS CORRECTED | EUR |
---|---|
201 Time-rate pay | 2200.00 |
402 Withholding tax (from EUR 2,200) | 550.00 |
413 Employee’s earnings-related pension insurance contribution (from EUR 2,200) | 157.30 |
414 Employee’s unemployment insurance contribution (from EUR 2,200) | 33.00 |
Later, the payer notices that it has overpaid EUR 200 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 EUR 200 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 (EUR 200) 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.
PAYER CORRECTS THE OVERPAYMENT TO AN UNJUST ENRICHMENT | EUR |
---|---|
201 Time-rate pay | 2000.00 |
201 Time-rate pay Unjust enrichment: Yes |
200.00 |
402 Withholding tax (from EUR 2,200) | 550.00 |
413 Employee’s earnings-related pension insurance contribution (from EUR 2,200) | 143.00 |
414 Employee’s unemployment insurance contribution (from EUR 2,200) | 30.00 |
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 EUR 2,000 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 (EUR 2,000).
Even though the overpayment is corrected to an unjust enrichment, the income earner’s taxable income will remain at EUR 2,200, and the amount of withholding at EUR 550 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 50 (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 EUR 200 in connection with the February wage payment. The income earner’s normal pay for February is EUR 2,000. The EUR 200 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%.
INCOME IS RECOVERED AS A NET AMOUNT | EUR |
---|---|
201 Time-rate pay | 2000.00 |
201 Time-rate pay Recovery: Yes |
200.00 |
Additional recovery details: Recovery date: 15.2.20xx Withholding from the recovered amount:(25% from EUR 200, withholding for January) Original pay period: 1.1.–31.1.20xx The original payment date: 15.1.20xx |
50.00 |
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) | 30.00 |
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 EUR 50 in the example case). Correspondingly, the income earner’s income for the tax year in question will reduce by EUR 200 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 EUR 2,000.
In the example, the income earner’s income after taxes and employee contributions totals EUR 1,427: EUR 2,000 (gross income) – EUR 400 (20% withholding) – EUR 173 (employee contributions). The recovery is carried out from the net wages: EUR 200 (overpayment, gross) – EUR 50 (25% withholding) = EUR 150 (recovered amount). This means that the income earner will be paid EUR 1,277 (EUR 1,427 – EUR 150).
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 50 (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%.
INCOME IS RECOVERED AS A GROSS AMOUNT | EUR |
---|---|
201 Time-rate pay | 2000.00 |
201 Time-rate pay Recovery: Yes Additional recovery details: Recovery date: 15.2.20xx Original pay period: 1.1.–31.1.20xx The original payment date: 15.1.20xx |
200.00 |
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) | 30.00 |
In the example, the income earner’s income after taxes and employee contributions totals EUR 1,427: EUR 2,000 (gross income) – EUR 400 (20% withholding) – EUR 173 (employee contributions). The recovery is carried out from the net wages. This means that the income earner will be paid EUR 1,227 (EUR 1,427 – EUR 200).
The employer’s obligations for January will not be reduced. The income earner’s taxable income will be reduced by EUR 200, 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. The overpayment can be recovered from other income paid to the person. In this case as well, the same income type used to report the original overpayment must be used when reporting the recovered income.
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 Section 4.9.
Example 51: 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 EUR 200 overpayment made in January by offsetting the amount from the gross wages paid in February. The income earner’s normal pay for February is EUR 2,000, but in this case, the payer deducts the overpayment of EUR 200 from the gross wages and only pays EUR 1,800 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.
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) | 27.00 |
In the example, the income earner’s income after taxes and employee contributions totals EUR 1,284.30: EUR 1,800 (gross income) – EUR 360 (20% withholding) – EUR 155.70 (employee contributions).
The employer’s obligations for January will remain unchanged. The income earner’s taxable income for February totals EUR 1,800.