Reporting data to the Incomes Register: fringe benefits and reimbursements of expenses

Date of issue
4/20/2021
Record no.
VH/1900/05.00.00/2021
Validity
4/20/2021 - Until further notice

These instructions are intended for payers of contributions. The examples in the instructions describe how various fringe benefits and reimbursements of expenses are reported to the Incomes Register.

Payments made must always be reported to the Incomes Register at least as a total amount (lower-detail level of reporting, the so-called reporting method 1). If the payer wishes, the payments made can be reported in more detail than required by the mandatory reporting method, using the separate complementary income types intended for the purpose (the higher level of detail for reporting, or the so-called reporting method 2). Regardless of the reporting method of monetary wages, fringe benefits and tax-exempt reimbursements of expenses must always be reported separately as specific income types.

The examples in these instructions describe the reporting of data both in total amounts and in an itemised manner. The examples do not include all mandatory data to be reported, only the data needed to report fringe benefits and reimbursements of expenses. For example, there are no separate instructions for the reporting of tax withholding, except in Section 1.6. The sums used in the examples are examples only and the amount of social insurance contributions, the withholding rate, and the maximum amounts of tax-exempt reimbursements of travel expenses must be checked for each year. The withholding is determined on the basis of the withholding rate of each recipient.

The instructions describe reporting in domestic situations. Reporting data to the Incomes Register in international situations is described in the instructions Reporting data to the Incomes Register: international situations. Issues related to substitute payers or wage security are covered in the instructions Correcting data in the Incomes Register.

These instructions replace the earlier instructions named Reporting data to the Incomes Register: fringe benefits and reimbursements of expenses. The instructions have been updated:

  • Added guidance and examples for situations where an employee is granted an employer-subsidised commuter ticket as a fringe benefit by deducting the benefit from the employee’s monetary wages to section 1.1.2 of the instructions.
  • Added guidance and examples for situations where an employee is granted a bicycle benefit by deducting the benefit from the employee’s monetary wages to section 1.1.3 of the instructions.

1 Fringe benefits

Fringe benefits are non-monetary remunerations for work, which the employee receives from the employer. Fringe benefits are considered to be taxable wage income from which tax must be withheld and social insurance contributions paid by the employer who issued the benefit.

If the employer pays no monetary wages to the employee, tax cannot be withheld from the fringe benefit. If monetary wages that would suffice for withholding the employee’s earnings-related pension insurance contribution and unemployment insurance contribution have not been paid to an employee, the employer may withhold these employee’s insurance contributions in connection with later wage payments within the time limits prescribed by law. The employer reports these payments to the Incomes Register at Employee's unemployment insurance contribution and Employee's earnings-related pension insurance contribution in the payment day report containing the withholding from the employee. If, in the situation described above, the employee's social insurance contributions are not collected in connection with a later payment of wages, the employer contributions paid by the employer are reported on the earnings payment report as other fringe benefits paid to the employee; for more details, see Section 1.3. Withholding from fringe benefits is only reported to the Incomes Register if it has been performed.

Fringe benefit data must be submitted no later than on the fifth day of the calendar month following the fringe benefit's accrual month. However, if monetary wages are paid for the fringe benefit's accrual month during the calendar month following the accrual month, the fringe benefit data can also be submitted by reporting the fringe benefit as income for the calendar month following its accrual month. The report must then be reported no later than on the fifth day of the calendar month following the month as the income for which the fringe benefit was reported. Accrual month means the calendar month during which the benefit was available.

Example 1: If monetary wages accrued in December are paid in part or in full during January, a fringe benefit for December can be reported as income for January. The deadline for reporting the fringe benefit will then be the fifth of February.

If an employee receives only a fringe benefit without being paid any monetary wages, data on the amount of the benefit must be reported to the Incomes Register monthly. Enter the date of the month in which the benefit was available to the income earner as the payment date (for example, the last day of the month).

If an employee is paid wages in two-week periods, the payer, if it so wishes, can report the benefit twice per month by dividing the taxable value between the two different pay periods of the same month. The recommendation is, however, that fringe benefits be reported only once per month. The deadlines for reporting fringe benefits are described in more detail in Section 1.5.

Fringe benefits must be reported to the Incomes Register even if the employee has paid the employer reimbursement for the fringe benefit equal to or exceeding the monetary value of the fringe benefit, with no remaining amount to be added to the wages. The reimbursement collected for the fringe benefit must be reported in the same earnings payment report as the fringe benefit. 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. The collected reimbursement reduces taxable income and earnings from work on which social insurance contributions are based.

The Tax Administration confirms the monetary values of fringe benefits for each year in a decision. The decision can be seen at vero.fi > Detailed guidance > Decisions Tax Administration’s decision on calculation principles applied to fringe benefits in the tax assessment for 2021. If the taxable value of a benefit has not been separately confirmed in a decision issued by the Tax Administration, the value of the fringe benefit is its fair value. Fair value means the actual costs incurred by the acquisition of the benefit.

1.1 Fringe benefits that are always reported as specific income types

Car benefit, employer subsidised commuter ticket, bicycle benefit and interest benefit for a housing loan are fringe benefits that are always reported as specific income types.

1.1.1 Car benefit

A car benefit is established for an employee when the employer provides the employee or their family with a car that the employer owns or possesses, and allows its private use.

The employer reports the amount of car benefit in the Incomes Register under the income type Car benefit (304). It is irrelevant whether the employer reports the monetary wages as a total sum (reporting method 1) or itemised (reporting method 2). In addition to car benefit, the employer must notify, as information on the Type of company car benefit, whether the benefit in question is a limited car benefit or full car benefit. In the case of limited car benefit, the employee pays for at least the fuel of the car. In the case of full car benefit, the employer pays all expenses incurred from the car.

The employer must report the Car age group to the Incomes Register by selecting A, B, C, or U from the list of values. Fringe benefit cars are divided into three age groups based on the car's registration year marked on the vehicle licence. This is the year when the car was registered for the first time. During the first three years of use, cars belong to age group A, during the three following years to age group B and after that, to age group C. The value U stands for car benefit used abroad and received abroad. In this case, the registration year is irrelevant.

If the operating costs of the employee’s car benefit are calculated as a per-kilometre value rather than a monthly value, the employer must report the Odometer reading to the Incomes Register. Enter the number of kilometres driven using a company car in private use in this field. According to the Tax Administration’s decision, the employer may report the data on the number of kilometres by pay period or, alternatively, in the last report of the year at the latest. If the employer does not receive information on the number of kilometres of a car benefit until after the month during which the benefit was available, the submitted report must be corrected.

Example 2: In January, an employee received full car benefit, calculated in accordance with the Tax Administration’s decision on fringe benefits. The value of the benefit is EUR 750.

The amount of car benefit reported for January:

Example 2.
DATA TO BE REPORTED EUR

304 Car benefit

Type of car benefit: Full car benefit

Car age group: A

750.00

The employer may collect the deductible of the car benefit from the net wages of the employee. In such a case, the employee actually pays the deductible, and this deductible of the car benefit decreases the taxable benefit or eliminates it entirely. If the deductible of the car benefit is lower than the taxable value of the car benefit, the difference between the value of the car benefit and the compensation collected for the car benefit is a taxable fringe benefit for the employee. If the deductible is equal to the taxable value of the car benefit, no taxable benefit is established. The employer reports the taxable value of the fringe benefit to the Incomes Register under the income type Car benefit (304) and the amount of deductible collected from the employee under the income type Compensation collected for car benefit (401).

The car benefit must be reported even if the employer has collected compensation from the employee for the fringe benefit, which is equal to or exceeds the monetary value of the fringe benefit, with no remaining amount to be added to the wages. Even if the employer has collected a reimbursement for a car benefit that exceeds its taxable value, the amount reported as the reimbursement collected for the car benefit on the earnings payment report must not exceed the taxable value.

The deductible collected from the employee is reported separately under the income type Compensation collected for car benefit (401). Even then, the taxable value of the benefit is reported in full using the income type Car benefit (304), and the amount of the collected reimbursement is not deducted from it. The reimbursement collected for a car benefit must be reported on the same earnings payment report as the car benefit, even if the employer collects the reimbursement during the pay period before or after the pay period in which the car benefit is reported.

Example 3: In January, an employee received limited car benefit, the monthly value of which is EUR 350. The payer collects EUR 100 as a deductible from the employee's net wages. The difference between the amount of car benefit and the deductible is the amount of the employee's taxable car benefit.

Example 3.
DATA TO BE REPORTED EUR

304 Car benefit

Type of car benefit: Limited car benefit

Car age group: A

350.00

401 Compensation collected for car benefit

100.00

1.1.2 Employer-subsidised commuter ticket as fringe benefit

An employer-subsidised commuter ticket is a personal public transport ticket provided by the employer to the employee for commuting between the employee's residence and place of work. The employer-subsidised commuter ticket’s value is partly tax-exempt and partly taxable. The taxable portion is a fringe benefit considered as wages. The employer-subsidised commuter ticket is tax-exempt income up to EUR 3,400. If an employee has both an employer-subsidised commuter ticket and a bicycle benefit, their total tax-exempt amount can be at most EUR 3,400 per calendar year. The employer must always report the employer-subsidised commuter ticket to the Incomes Register, even if no taxable benefit is established.

If the employees buy the ticket themselves, and the employer pays the price of the ticket or part of it to the employee, all of the compensation paid by the employer is considered to be the employee's wages.

The employer reports the tax-exempt share of the personal public transport ticket provided by the employer to the employee under the income type Employer-subsidised commuter ticket, tax-exempt share (341) and the share considered as wages under the income type Employer-subsidised commuter ticket, taxable share (342). The information must be itemised, because it affects the deductibility of the employee's travel expenses between home and work. The employer-subsidised commuter ticket benefit is always reported to the Incomes Register under the aforementioned income types. It is irrelevant whether the employer reports the monetary wages to the Incomes Register as a total sum (reporting method 1) or in an itemised manner (reporting method 2).

The reporting of an employer-subsidised commuter ticket differs from other fringe benefits, because the payer must deduct the reimbursement collected from the employee from the share deemed to be wages. The share of the benefit value from which the employer has already deducted a reimbursement it has possibly collected from the income earner is reported as the share deemed to be wages.. If no benefit deemed to be wages is created, the employer must deduct the reimbursement collected from the employee from the tax-exempt share of the employer-subsidised commuter ticket. The remaining amount must be reported as the tax-exempt share of the employer-subsidised commuter ticket.

The share regarded as wages is subject to withholding and social insurance contributions. No tax is withheld or social insurance contributions are paid from the tax-exempt share.

The euro limits are tax year-specific. The employer calculates and reports the tax-exempt and taxable part of the benefit monthly using the procedures and observing the exceptions described later. If the employer, instead of providing payment instruments entitling the employee to purchase a ticket, acquires a ticket for the employee's use the validity period of which overlaps two different years, the employer must distribute the price to these years in proportion with the ticket's validity periods in the different years and report the data correspondingly on an earnings payment reports. If, for example, the ticket is valid from 1 November 2021 to 31 March 2022, two-fifths of the ticket price are income for the year 2021 and three-fifths are income for the year 2022. The price shares are reported correspondingly on earnings payment reports for the years 2021 and 2022. If wages accrued in December are paid in January, the employer can report the fringe benefit for December as income for January, in which case the fringe benefit is then deemed income for the tax year starting from January. The amount reported as income for January is taken into account when the euro-denominated limits for the tax year starting from January are monitored.

Example 4: The employer has provided an employee with an employer-subsidised commuter ticket with a value of EUR 1,500 and with a validity period from 1 June 2021 to 31 May 2022. The employer reports 7/12 of the ticket price, EUR 875, as income for 2021, and 5/12 of the ticket price, EUR 625, as income for 2022. No fringe benefit is established. The payer reports information on the employer-subsidised commuter ticket to the Incomes Register under the income type Employer-subsidised commuter ticket, tax-exempt share (341). The payer reports the ticket for 2021 as follows:


Example 4.
DATA TO BE REPORTED EUR

341 Employer-subsidised commuter ticket, tax-exempt share

875.00

If the employer gives an employee means of payment entitling them to buy a ticket, such as commuting vouchers, or a ticket that can be used for a certain number of trips and is valid for a year from the date of purchase, for example, the benefit is deemed to be and reported as income for the month during which the ticket was purchased. The time of purchase also determines the ticket's tax year.

The employer can report the employer-subsidised commuter ticket in connection with the wages accrued during the same period of time. If, for example, the employer has given an employer-subsidised commuter ticket in December, but the wages accrued in December are not paid to the employee until January, the employer can report the employer-subsidised commuter ticket in connection with the monetary wages paid in January. Alternatively, the employer can report the benefit separately on its own report no later than on the fifth of February. A payment date in January must be entered as the payment date, for example the last day of January. The benefit is then deemed January's income for the income earner and is taken into account when euro-denominated limits for the tax year starting from January are monitored.

The employer-subsidised commuter ticket benefit is reported as income for the pay period during which the benefit was processed in the employee's payroll calculation. If the tax-exempt employer-subsidised commuter ticket benefit is not processed in the payroll system at all, the tax-exempt employer-subsidised commuter ticket benefit can be reported once per year. The recommendation is, however, to report the benefit in the report for the month during which the benefit is granted. If, for example, an income earner is granted EUR 300 in employer-subsidised commuter ticket benefit in February, the data is reported in the February earnings payment report. If, however, the wages accrued in February are paid in March, the employer-subsidised commuter ticket benefit can be reported in connection with the March payment of wages or separately on the fifth of April. If the employer acquires a ticket for the employee's use, the validity period of which overlaps two different years, the employer must distribute the price to these years in proportion with the ticket's validity periods in the different years and report the data correspondingly on earnings payment reports, even if the tax-exempt employer-subsidised commuter ticket benefit is not processed in the payroll system.

Example 5: The employer has provided an employee with an employer-subsidised commuter ticket with a value of EUR 300. No fringe benefit is established. The payer reports to the Incomes Register EUR 300 under the income type Employer-subsidised commuter ticket, tax-exempt share (341).
Example 5.
DATA TO BE REPORTED EUR

341 Employer-subsidised commuter ticket, tax-exempt share

300.00

Example 6: In January, the employer provided an employee with an employer-subsidised commuter ticket with a value of EUR 3,800. The employer does not charge a fee for the ticket price from the employee. The employer-subsidised commuter ticket is taxable income insofar as the value of the benefit exceeds EUR 3,400 , which means that a taxable fringe benefit of EUR 400 is established (the share considered as wages). The employee receives EUR 3,400 of tax-exempt benefit.

Example 6.
DATA TO BE REPORTED EUR

341 Employer-subsidised commuter ticket, tax-exempt share

3400.00

342 Employer-subsidised commuter ticket, taxable share

400.00

Example 7: The employer has provided an employee with an employer-subsidised commuter ticket with a value of EUR 5,000. The employer does not charge a fee for the ticket price from the employee. Under the income type Employer-subsidised commuter ticket, taxable share (342), the employer reports EUR 1,600 (5,000-3,400) to the Incomes Register. Under the income type Employer-subsidised commuter ticket, tax-exempt share (341), the employer reports EUR 3,400.

Example 7.
DATA TO BE REPORTED EUR

341 Employer-subsidised commuter ticket, tax-exempt share

3400.00

342 Employer-subsidised commuter ticket, taxable share

1600.00

The employer may collect the deductible from the employee’s net wages. The deductible portion is reported under the income type Reimbursement for employer-subsidised commuter ticket (415). The collected reimbursement is reported in full even if it is greater than the share deemed to be wages. The collected reimbursement must be deducted from the share deemed to be wages. The remaining amount must be reported as the taxable share deemed to be wages.

Example 8: The employer has provided an employee with an employer-subsidised commuter ticket with a value of EUR 5,000. The employer collects EUR 1,200 from the employee's net wages. The amount of the taxable fringe benefit and wages is EUR 400 (5,00-3,400-1,200). The employee receives EUR 3,400 of tax-exempt benefit .

The employer reports the information to the Incomes Register as follows:

Example 8.
DATA TO BE REPORTED EUR

341 Employer-subsidised commuter ticket, tax-exempt share

3400.00

342 Employer-subsidised commuter ticket, taxable share

400.00

415 Reimbursement for employer-subsidised commuter ticket

1200.00

If no benefit deemed to be wages is created, the employer must deduct the reimbursement collected from the employee from the tax-exempt share of the employer-subsidised commuter ticket. The remaining amount must be reported as the tax-exempt share of the employer-subsidised commuter ticket.

Example 9: The employer has provided an employee with an employer-subsidised commuter ticket with a value of EUR 1,000. The employer collects EUR 500 from the employee's net wages. The employee receives EUR 500 of tax-exempt benefit.

Example 9.

DATA TO BE REPORTED

EUR

341 Employer-subsidised commuter ticket, tax-exempt share

500.00

415 Reimbursement for employer-subsidised commuter ticket

500.00

If an employee has both an employer-subsidised commuter ticket and a bicycle benefit, their total tax-exempt amount can be at most EUR 3,400. Therefore, the bicycle benefit provided by the employer reduces the maximum tax-exempt amount of the employer-subsidised commuter ticket.

Example 10: The employer has provided an employee with an employer-subsidised commuter ticket with a value of EUR 4,000 and a bicycle benefit with a value of EUR 1,000. The employer does not charge a fee from the employee for the value of the employer-subsidised commuter ticket or bicycle benefit. The bicycle benefit reduces the amount of the employer-subsidised commuter ticket by EUR 1,000. The amount of the taxable employer-subsidised commuter ticket benefit and wages is EUR 1,600. The employee receives a tax-exempt employer-subsidised commuter ticket benefit with a value of EUR 2,400 and a tax-exempt bicycle benefit with a value of EUR 1,000. 

Example 10.
DATA TO BE REPORTED EUR

341 Employer-subsidised commuter ticket, tax-exempt share

2400.00

342 Employer-subsidised commuter ticket, taxable share

1600.00

363 Bicycle benefit, tax-exempt share

1000.00

In the case of employer-subsidised commuter tickets, the amounts of taxable and tax-exempt benefit is estimated for the entire year unlike with other fringe benefits, the amounts of which are estimated for one month at a time. If an employer-subsidised commuter ticket is granted once per year, for example at the start of the year, and a reimbursement is collected regularly, the person would, in practice, incur a taxable benefit at the start of the year as the payer has not yet had time to collect more than the first month's reimbursement for the benefit. So that the payer does not need to correct submitted reports in a situation described above, the payer can anticipate the situation in advance, divide the tax-exempt share over the entire year and report it monthly to the Incomes Register together with the collected reimbursement.

Example 11: The employer grants an employer-subsidised commuter ticket worth EUR 4,200 at the start of the year. The employer collects EUR 100 per month for the ticket. The amount of reimbursement collected is thus EUR 1,200 per year. In practice, no share deemed to be wages would be formed at the end of the year. Instead, wages would be formed at the start of the year, because the reimbursement has not yet been collected from the employee.

The amount of the tax-exempt benefit received by the person is EUR 3,000 for the entire year. The payer reports the data to on a monthly basis as follows:

Example 11.
DATA TO BE REPORTED EUR

341 Employer-subsidised commuter ticket, tax-exempt share

250.00

415 Reimbursement for employer-subsidised commuter ticket

100.00

If the employer-subsidised commuter ticket benefit has been granted at the start of the year for the entire year, and the employment is terminated in the middle of the year, the payer must correct the reports it has submitted. In such a case, only the part during the time of employment is employer-subsidised commuter ticket benefit. The rest of the value of the commuter ticket is wages, unless the employer collects a reimbursement for it. The ticket must be corrected into wages using income types for wages no later than during the last wage payment month.

An employer-subsidised commuter ticket is granted by deducting the benefit from the employee’s monetary wages

The employer-subsidised commuter ticket benefit can be granted by deducting it from the employee’s monetary wages by separate agreement between the employer and the employee. In this case, the amount corresponding to the granted tax-exempt fringe benefit’s value is deducted from the employee’s monetary wages. This means that the fringe benefit reduces the amount of the employee’s taxable gross wages. It also reduces the amount of the employee’s wages subject to withholding and health insurance contributions. However, it should be noted that the earnings-related pension and unemployment insurance contributions and the accident and occupational disease insurance contributions are calculated based on the amount of the wages before the value of the fringe benefit is deducted. From the point of view of the earnings-related pension, unemployment insurance, and accident and occupational disease insurance contributions, tax-exempt fringe benefits that are granted as deductions from monetary wages are paid as remuneration for work, which is why the amount of income used as the grounds for these contributions is different from the amount considered as taxable income.

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

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

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

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

Example 12: The employee’s monthly wages are EUR 3,500. The employer provides the employee with a monthly tax-exempt employer-subsidised commuter ticket of EUR 100 (totalling EUR 1,200 per year). The employer and employee have agreed that the employer-subsidised commuter ticket provided for the employee is included in the employee’s gross wages. The monthly tax-exempt benefit of EUR 100 provided as part of the employee’s wages is reported using income types 322–324. In addition, the benefit is reported as a tax-exempt employer-subsidised commuter ticket using income type 341.

Each month, the following are reported to the Incomes Register on an earnings payment report:

Example 12.
INFORMATION TO BE REPORTED euro
201 Time-rate pay 3400.00
322 Wages paid by substitute payer: employer pays for employer’s earnings-related pension insurance contribution 100.00
323 Wages paid by substitute payer: employer pays for employer’s unemployment insurance contribution 100.00
324 Wages paid by substitute payer: employer pays for accident and occupational disease insurance contribution 100.00
341 Employer-subsidised commuter ticket, tax-exempt share 100.00
402 Withholding tax (25% from EUR 3,400) 850.00
413 Employee’s earnings-related pension insurance contribution (from EUR 3,500) 250.25
414 Employee’s unemployment insurance contribution (from EUR 3,500)

49.00

The amount of the health insurance contribution reported on the employer’s separate report is calculated from EUR 3,400.

If part of the employer-subsidised commuter ticket is a taxable benefit, it is reported to the Incomes Register using income type 342 Employer-subsidised commuter ticket, taxable share.

Example 13: The employee’s monthly wages are EUR 4,100. The employer provides the employee with a monthly employer-subsidised commuter ticket of EUR 300 (totalling EUR 3,600 per year). The employer-subsidised commuter ticket generates a taxable fringe benefit, i.e. wages, of EUR 200 (3,600-3,400) per year, i.e. EUR 16.67 per month. The employer and employee have agreed that the employer-subsidised commuter ticket provided for the employee is included in the employee’s gross wages.  The monthly tax-exempt benefit of EUR 283.33 (3,400 ÷ 12) provided as part of the employee’s wages is reported using income types 322–324. In addition, the tax-exempt benefit is reported using income type 341 and the part deemed to be wages using income type 342. 

Each month, the following are reported to the Incomes Register on an earnings payment report:

Example 13.
INFORMATION TO BE REPORTED euro
201 Time-rate pay 3800.00
322 Wages paid by substitute payer: employer pays for employer’s earnings-related pension insurance contribution 283.33
323 Wages paid by substitute payer: employer pays for employer’s unemployment insurance contribution 283.33
324 Wages paid by substitute payer: employer pays for accident and occupational disease insurance contribution 283.33
341 Employer-subsidised commuter ticket, tax-exempt share 283.33
342 Employer-subsidised commuter ticket, taxable share 16.67
402 Withholding tax (25% from EUR 3,816.67) 954.17
413 Employee’s earnings-related pension insurance contribution (from EUR 4,100) 293.15
414 Employee’s unemployment insurance contribution (from EUR 4,100) 57.40

The amount of the health insurance contribution reported on the employer’s separate report is calculated from EUR 3816.67.

If a reimbursement has exceptionally been collected for the employer-subsidised commuter ticket benefit granted by deducting it from the employee’s monetary wages, it is reported using income type 415 Reimbursement for employer-subsidised commuter ticket. The payer deducts the reimbursement collected from the share reported using income type 342 Employer-subsidised commuter ticket, taxable share. If there is no share deemed to be wages, the payer deducts the reimbursement collected from the share reported using income type 341 Employer-subsidised commuter ticket, tax-exempt share. If there is no share deemed to be wages and the reimbursement collected is deducted from the tax-exempt share, the payer must also correspondingly reduce the amount subject to social insurance contributions reported using income types 322, 323 and 324.

Example 14: The employee’s monthly wages are EUR 8,000. The employer provides the employee with a monthly employer-subsidised commuter ticket of EUR 90 (totalling EUR 1,080 per year). The granted employer-subsidised commuter ticket is tax-exempt income. The employer and employee have agreed that the employer-subsidised commuter ticket provided for the employee is included in the employee’s gross wages. The employer collects EUR 50 per month as a reimbursement for the ticket from the employee. The reimbursement collected reduces the amount of the employer-subsidised commuter ticket granted to EUR 40 per month (90-50). This amount is reported using income types 322–324. The payer also deducts the reimbursement collected from the tax-exempt benefit and reports the difference as a tax-exempt employer-subsidised commuter ticket. 

Each month, the following are reported to the Incomes Register on an earnings payment report:

Example 14.
INFORMATION TO BE REPORTED euro
201 Time-rate pay 7910.00
322 Wages paid by substitute payer: employer pays for employer’s earnings-related pension insurance contribution 40.00
323 Wages paid by substitute payer: employer pays for employer’s unemployment insurance contribution 40.00
324 Wages paid by substitute payer: employer pays for accident and occupational disease insurance contribution 40.00
341 Employer-subsidised commuter ticket, tax-exempt share 40.00
402 Withholding tax (30% from EUR 7,910) 2373.00
413 Employee’s earnings-related pension insurance contribution (from EUR 7,950) 568.43
414 Employee’s unemployment insurance contribution (from EUR 7,950) 111.30
415 Reimbursement for employer-subsidised commuter ticket 50.00

The amount of the health insurance contribution reported on the employer’s separate report is calculated from EUR 7,910.

Read more in the instructions Työsuhdepolkupyöräedun ja työsuhdematkalippuedun ottaminen huomioon eläkkeen perusteena olevassa työansiossa (Taking the bicycle benefit and employer-subsidised commuter ticket benefit in earnings from work used as the basis of pensions) (tyoelakelakipalvelu.fi).

Correcting reports already submitted for 2021

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

1.1.3 Bicycle benefit

A bicycle benefit is established when the employer provides a bicycle for an employee for private use. The bicycle may be owned by the employer or acquired through a leasing agreement. A bicycle benefit is also established if the employer provides, by other similar means, an employee with an opportunity to use a bicycle during their leisure time.

EUR 1,200 per year of the bicycle benefit is tax-exempt income and any amount in excess of this limit is a taxable fringe benefit. If an employee has both a bicycle benefit and an employer-subsidised commuter ticket, their total tax-exempt amount can be at most EUR 3,400. In other words, the tax-exempt bicycle benefit is deducted from the maximum tax-exempt amount of the employer-subsidised commuter ticket.

The value of the bicycle benefit is determined according to the fair value. Every year, the Tax Administration issues calculation principles for the fair values of fringe benefits. The calculation of the amount of the bicycle benefit is described in the Tax Administration Guidelines Fringe benefits in taxation and the Tax Administration’s decision on calculation principles for fringe benefits applied to taxation.  

The bicycle benefit must always be reported on an earnings payment report, also when no taxable benefit is established.

Example 15: The employer has provided an employee with a bicycle benefit with a value of EUR 600. No fringe benefit is established.

Example 15.
DATA TO BE REPORTED EUR

363 Bicycle benefit, tax-exempt share

600.00

A tax-exempt bicycle benefit must be reported as income for the pay period in which the benefit was handled in the payroll accounting for the employee. If a tax-exempt bicycle benefit is not handled in the payroll system at all, the tax-exempt bicycle benefit can only be reported once a year. The recommendation is, however, to report the benefit in the report for the month during which the benefit is granted. Instead, the taxable share of a bicycle benefit regarded as wages must be reported over the months, during which the employee had access to the benefit. The taxable and tax-exempt shares of a bicycle benefit must be itemised, because they affect the deductibility of the employee’s travel expenses between home and work.

Example 16: The employer has provided an employee with a bicycle benefit with a value of EUR 1,500. The employer does not charge a fee for the benefit value from the employee. The employee can use the bicycle round the year. Because the bicycle benefit is taxable insofar as the value of the benefit exceeds EUR 1,200, a taxable fringe benefit of EUR 300 is established. The employer reports EUR 25 every month as an amount deemed as wages and EUR 100 as the tax-exempt share of the bicycle benefit: 

Example 16.
DATA TO BE REPORTED EUR

363 Bicycle benefit, tax-exempt share

100.00

364 Bicycle benefit, taxable share

25.00

The reporting of a bicycle benefit differs from other fringe benefits, similarly to the reporting of an employer-subsidised commuter ticket, because the payer must deduct the reimbursement collected from the employee from the share deemed to be wages. The share of the benefit value from which the employer has already deducted a reimbursement it has possibly collected from the income earner is reported as the share deemed to be wages.

Example 17: The employer has provided an employee with a bicycle benefit with a value of EUR 1,800. The employer collects EUR 200 from the employee's net wages. The employee receives EUR 1,200 of tax-exempt benefit. The amount of the taxable fringe benefit and wages is EUR 400 (1,800-1,200-200). 

Example 17.
DATA TO BE REPORTED EUR

363 Bicycle benefit, tax-exempt share

1200.00

364 Bicycle benefit, taxable share

400.00

420 Reimbursement collected for bicycle benefit

200.00

If no benefit deemed to be wages is established, the employer must deduct the reimbursement collected from the employee from the tax-exempt share of the bicycle benefit. The remaining amount must be reported as the tax-exempt share of the bicycle benefit.

Example 18: The employer has provided an employee with a bicycle benefit with a value of EUR 1,000. The employer collects EUR 400 from the employee's net wages. The employee receives EUR 600 of tax-exempt benefit.

Example 18.
DATA TO BE REPORTED EUR

363 Bicycle benefit, tax-exempt share

600.00

420 Reimbursement collected for bicycle benefit

400.00

A bicycle benefit is granted by deducting the benefit from the employee’s monetary wages

The bicycle benefit can be granted by deducting it from the employee’s monetary wages by separate agreement between the employer and the employee. In this case, the amount corresponding to the granted tax-exempt fringe benefit’s value is deducted from the employee’s monetary wages. This means that the fringe benefit reduces the amount of the employee’s taxable gross wages. It also reduces the amount of the employee’s wages subject to withholding and health insurance contributions. However, it should be noted that the earnings-related pension and unemployment insurance contributions and the accident and occupational disease insurance contributions are calculated based on the amount of the wages before the value of the fringe benefit is deducted. From the point of view of the earnings-related pension, unemployment insurance, and accident and occupational disease insurance contributions, tax-exempt fringe benefits that are granted as deductions from monetary wages are paid as remuneration for work, which is why the amount of income used as the grounds for these contributions is different from the amount considered as taxable income.

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

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

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

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

Example 19: The employee’s monthly wages are EUR 4,800. The employer provides an employee with a tax-exempt bicycle benefit with a value of EUR 800. The employer and employee have agreed that the bicycle benefit provided for the employee is included in the employee’s gross wages. The tax-exempt benefit of EUR 800 provided as part of the employee’s wages is reported using income types 322–324. In addition, the benefit is reported as a tax-exempt bicycle benefit using income type 363. The following are reported to the Incomes Register on an earnings payment report:

Example 19.
INFORMATION TO BE REPORTED euro
201 Time-rate pay 4000.00
363 Bicycle benefit, tax-exempt share 800.00
322 Wages paid by substitute payer: employer pays for employer’s earnings-related pension insurance contribution 800.00
323 Wages paid by substitute payer: employer pays for employer’s unemployment insurance contribution 800.00
324 Wages paid by substitute payer: employer pays for accident and occupational disease insurance contribution 800.00
402 Withholding tax (25% from EUR 4,000) 1000.00
413 Employee’s earnings-related pension insurance contribution (from EUR 4,800) 343.20
414 Employee’s unemployment insurance contribution (from EUR 4,800) 67.20

The amount of the health insurance contribution reported on the employer’s separate report is calculated from EUR 4,000.

Example 20: The employee’s monthly wages are EUR 3,500. The employer provides an employee with a monthly tax-exempt bicycle benefit with a value of EUR 100. The employer and employee have agreed that the bicycle benefit provided for the employee is included in the employee’s gross wages. The monthly tax-exempt benefit of EUR 100 provided as part of the employee’s wages is reported using income types 322–324. In addition, the tax-exempt bicycle benefit is reported using income type 363. Each month, the following are reported to the Incomes Register on an earnings payment report:

Example 20.
INFORMATION TO BE REPORTED euro
201 Time-rate pay 3400.00
363 Bicycle benefit, tax-exempt share 100.00
322 Wages paid by substitute payer: employer pays for employer’s earnings-related pension insurance contribution 100.00
323 Wages paid by substitute payer: employer pays for employer’s unemployment insurance contribution 100.00
324 Wages paid by substitute payer: employer pays for accident and occupational disease insurance contribution 100.00
402 Withholding tax (25% from EUR 3,400) 850.00
413 Employee’s earnings-related pension insurance contribution (from EUR 3,500) 250.25
414 Employee’s unemployment insurance contribution (from EUR 3,500) 49.00

The amount of the health insurance contribution reported on the employer’s separate report is calculated from EUR 3,400.

If part of the bicycle benefit is a taxable benefit, it is reported to the Incomes Register using income type 364 Bicycle benefit, taxable share.

Example 21: The employee’s monthly wages are EUR 3,000. The employer provides the employee with a monthly bicycle benefit of EUR 180 (totalling EUR 2,160 per year). The bicycle benefit generates a taxable fringe benefit, i.e. wages, of EUR 960 (2,160-1,200) per year. The amount of the monthly tax-exempt benefit is EUR 100 and the amount of the taxable benefit is EUR 80. The employer and employee have agreed that the bicycle benefit provided for the employee is included in the employee’s gross wages, in which case the employee’s monetary wages decrease to EUR 2,820. The tax-exempt benefit of EUR 100 provided as part of wages is reported using income types 322–324. In addition, the tax-exempt benefit is reported using income type 363 and the part deemed to be wages using income type 362.

Each month, the following are reported to the Incomes Register on an earnings payment report:

Example 21.
INFORMATION TO BE REPORTED euro
201 Time-rate pay 2820.00
322 Wages paid by substitute payer: employer pays for employer’s earnings-related pension insurance contribution 100.00
323 Wages paid by substitute payer: employer pays for employer’s unemployment insurance contribution 100.00
324 Wages paid by substitute payer: employer pays for accident and occupational disease insurance contribution 100.00
363 Bicycle benefit, tax-exempt share 100.00
364 Bicycle benefit, taxable share 80.00
402 Withholding tax (25% from EUR 2,900) 725.00
413 Employee’s earnings-related pension insurance contribution (from EUR 3,000) 214.50
414 Employee’s unemployment insurance contribution (from EUR 3,000) 42.00

The amount of the health insurance contribution reported on the employer’s separate report is calculated on the basis of EUR 2,900.

If a reimbursement has exceptionally been collected for the bicycle benefit granted by deducting it from the employee’s monetary wages, it is reported using income type 420 Reimbursement collected for bicycle benefit. The payer deducts the reimbursement collected from the share reported using income type 364 Bicycle benefit, taxable share. If there is no share deemed to be wages, the payer deducts the reimbursement collected from the share reported using income type 363 Bicycle benefit, tax-exempt share. If there is no share deemed to be wages and the reimbursement collected is deducted from the tax-exempt share, the payer must also correspondingly reduce the amount subject to social insurance contributions reported using income types 322, 323 and 324.

Example 22: The employee’s monthly wages are EUR 3,000. The employer provides an employee with a monthly bicycle benefit with a value of EUR 100. The benefit totals EUR 1,200 per year, meaning that it is tax-exempt income. The employer and employee have agreed that the bicycle benefit provided for the employee is included in the employee’s gross wages. The employer collects EUR 40 per month as a reimbursement for the ticket from the employee. The reimbursement collected reduces the amount of the bicycle benefit granted to EUR 60 per month (100-40). This amount is reported using income types 322–324. The payer also deducts the reimbursement collected from the tax-exempt benefit and reports the difference as a tax-exempt bicycle benefit.

Each month, the following are reported to the Incomes Register on an earnings payment report:

Example 22.
INFORMATION TO BE REPORTED euro
201 Time-rate pay 2900.00
322 Wages paid by substitute payer: employer pays for employer’s earnings-related pension insurance contribution 60.00
323 Wages paid by substitute payer: employer pays for employer’s unemployment insurance contribution 60.00
324 Wages paid by substitute payer: employer pays for accident and occupational disease insurance contribution 60.00
363 Bicycle benefit, tax-exempt share 60.00
402 Withholding tax (25% from EUR 2,900) 725.00
413 Employee’s earnings-related pension insurance contribution (from EUR 2,960) 211.64
414 Employee’s unemployment insurance contribution (from EUR 2,960) 41.44
420 Reimbursement collected for bicycle benefit 40.00

The amount of the health insurance contribution reported on the employee’s separate report is calculated from EUR 2,900.

Read more in the instructions Työsuhdepolkupyöräedun ja työsuhdematkalippuedun ottaminen huomioon eläkkeen perusteena olevassa työansiossa (Taking the bicycle benefit and employer-subsidised commuter ticket benefit in earnings from work used as the basis of pensions) (tyoelakelakipalvelu.fi).

Correcting reports already submitted for 2021

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

1.1.4 Interest benefit for a housing loan

An interest benefit for a housing loan is established when the employer collects annual interest on a housing loan it has granted to an employee that is lower than the reference interest rate commonly used in the market. “Reference rate” means the Euribor rate of 1, 3, 6 or 12 months or another reference rate that a bank generally uses when granting credit for its customers, such as the bank’s prime rate. This type of an interest benefit is handled as wages in taxation.

The employer reports the amount of the taxable interest benefit under the income type Interest benefit for a housing loan (302). The interest benefit is subject to withholding, but not to social insurance contributions.

1.2 Fringe benefits that can be reported in two ways

Data can be reported to the Incomes Register using a lower or higher level of detail. Car benefit, employer subsidised commuter ticket, bicycle benefit and interest benefit for a housing loan are fringe benefits that are always reported as specific income types, while accommodation benefit, telephone benefit, and meal benefit can be reported in two ways: either as a total sum under the income type Other fringe benefit (317) or, alternatively, as specific income types.

If the employer reports accommodation benefit, telephone benefit, and meal benefit as a total sum under the income type Other fringe benefit (317), the employer must also specify the fringe benefits included in the reported total sum. This is done under Benefit type.

If the employer reports Accommodation benefit (301), Telephone benefit (330), and Meal benefit (334) as separate income types, the benefits in question will not be reported under the income type Other fringe benefit (317).

Even if the payer reports the aforementioned three fringe benefits (accommodation benefit, telephone benefit, and meal benefit) as separate income types, monetary wages can still be reported on the same earnings payment report in either way, as a total sum or in an itemised manner.

Example 23: The employee’s wages for a pay period total EUR 3,650. The wages consist of EUR 2,700 in time-rate pay, EUR 300 in overtime pay, EUR 20 in telephone benefit, and EUR 630 in accommodation benefit.

The employer can report the monetary wages (EUR 3,000) in two different ways: either by reporting the monetary wages as a total amount or, alternatively, by itemising the wages in more detail using complementary income types:

Example 23, table 1/2.
MANDATORY MINIMUM LEVEL ALTERNATIVE METHOD

REPORTING METHOD  1

EUR

REPORTING METHOD  2

EUR

101 Total wages

3000.00

201 Time-rate pay

2700.00

 

 

235 Overtime compensation

300.00

The fringe benefits must be itemised by providing information on them separate from monetary wages. The employer reports the fringe benefits paid either under the income type Other fringe benefit, in which case the Benefit type must also be reported, or reports Accommodation benefit and Telephone benefit as separate income types.

Example 23, table 2/2.
SEPARATELY REPORTED INCOME TYPES
MANDATORY MINIMUM LEVEL   ALTERNATIVE METHOD  

Reporting method 1

EUR

Complementary reporting method

EUR

317 Other fringe benefit

Benefit type: Telephone benefit

Benefit type: Accommodation benefit

650.00

330 Telephone benefit

20.00

 

 

301 Accommodation benefit

630.00

1.2.1 Accommodation benefit

An employee receives accommodation benefit when the employer provides the employee with an apartment owned or possessed by the employer, based on a lease relationship related to the employment, or as a benefit included in the pay. If the value of accommodation benefit has been reduced in accordance with the decision of the Tax Administration, report the reduced value to the Incomes Register.

The employer may report the accommodation benefit separately using the income type Accomodation beneft (301) or as a total sum under the income type Other fringe benefit (317). If the employer reports using the latter method, using the Benefit type data related to the Other fringe benefit income type, the employer must also report that the income reported under the Other fringe benefit income type includes an accommodation benefit. If the benefit is reported separately under the income type Accommodation benefit, it is no longer reported under the income type Other fringe benefit.

1.2.2 Telephone benefit

An employee will receive telephone benefit when the employer pays the costs of the telephone subscription it provides, even for the employee’s private use outside working hours.

The employer may report the telephone benefit separately using the income type Telephone benefit (330) or as a total sum under the income type Other fringe benefit (317). If the employer reports using the latter method, using the Benefit type data related to the Other fringe benefit income type, the employer must also report that the income reported under the Other fringe benefit income type includes a telephone benefit. If the benefit is reported separately under the income type Telephone benefit, it is no longer reported under the income type Other fringe benefit.

If monetary wages are paid for the telephone benefit's accrual month during the calendar month following the accrual month, the telephone benefit can be reported as income for the calendar month following its accrual month. The report must then be reported no later than on the fifth day of the calendar month following the month as the income for which the telephone benefit was reported. Accrual month means the calendar month during which the benefit was available. Thus, if the employee received the telephone benefit upon the start of their employment in mid-April, but monetary wages for less than a month of work in April are not paid until the May payment of wages, the telephone benefit for April can be reported in May on the same report as the monetary wages accrued in April, or separately on the fifth day of the month following the payment of wages, i.e. on the fifth of June.

If the income earner only has a telephone benefit, the telephone benefit can be reported in advance on the January report for the entire year in one go according to how the benefit has been processed in the payroll calculation, if the following conditions are met:

  • the telephone benefit is not subject to earnings-related pension, unemployment, or accident and occupational disease insurance contributions, such as YEL-insured shareholders
  • no other income is paid or no other benefit given to the person.

1.2.3 Meal benefit

An employee receives meal benefit when the employer provides its employees with meals at a price below the fair value or completely free of charge. An employer can subsidise meal costs with a meal ticket, such as a lunch voucher, or other, similar targeted means of payment, such as a payment card or a mobile application, or by arranging catering. The amount of meal benefit must be reported to the Incomes Register on a monthly basis, independent of the type of meal benefit. For more information about the meal benefit reporting and adjustment date, see Section 1.5.

The employer may report the meal benefit separately using the income type Meal benefit (334) or as a total sum under the income type Other fringe benefit (317). If the employer reports using the latter method, the employer must also report, using the Benefit type data related to the Other fringe benefit income type, that the income reported under the Other fringe benefit income type includes a meal benefit. If the benefit is reported separately under the income type Meal benefit, it is no longer reported under the income type Other fringe benefit.

If the employer collects from the employee a reimbursement for the meal benefit, corresponding to its taxable value, the information is reported to the Incomes Register as Reimbursement for a meal benefit corresponds to taxable value: Yes. In this case, the amount of meal benefit is not reported. If a reimbursement equalling the taxable value of the meal benefit is collected from the employee, the Other fringe benefit income type must not be used. The amount collected for the meal benefit is not reported separately as Reimbursement collected for other fringe benefits.

Example 24: In April, the employer gave the employee 20 meal tickets with a nominal value of EUR 10. The taxable value of the meal tickets is EUR 7.50 per meal, totalling EUR 150. The employer collects a reimbursement from the employee in the amount of the taxable value (EUR 7.50) per meal. The employee used the tickets in April. The employer reports the April meal benefit as follows:

Example 24.
SEPARATELY REPORTED INCOME TYPES EUR

334 Meal benefit

Reimbursement for a meal benefit corresponds to taxable value: Yes

 

If the employer collects a reimbursement for the meal benefit that is smaller than its taxable value from the employee, the employer must report the meal benefit either by using income type Meal benefit (334) or by using income type Other fringe benefit (317) and specifying Type of benefit: Meal benefit. The collected reimbursement is reported separately using income type Reimbursement collected for other fringe benefits (407). The amount of the meal benefit's taxable value is reported as the meal benefit and the amount of the deductible collected from the employee as the collected reimbursement. Even if the reimbursement collected from the employee reduces the amount of the taxable meal benefit, the employer reports the value of the benefit in full and does not subtract the amount of the collected reimbursement from the amount of the meal benefit when reporting the data.

Example 25: The employer gave the employee 20 meal tickets with a nominal value of EUR 10. The taxable value of the meal tickets is EUR 7.50 per meal, totalling EUR 150. The employer collects EUR 2 per meal from the employee as a reimbursement, totalling EUR 40. The employer reports the meal benefit and the collected reimbursement as follows:

Example 25.
SEPARATELY REPORTED INCOME TYPES

Minimum level for reporting

EUR

Complementary reporting method

EUR

317 Other fringe benefit

Type of benefit: Meal benefit

150.00

334 Meal benefit

150.00

407 Reimbursement collected for other fringe benefits

40.00

407 Reimbursement collected for other fringe benefits

40.00

You can find more examples of reimbursements collected for a meal benefit in Section 1.4, Reimbursement collected for other fringe benefits.

Reporting a meal offered to an intern varies according to whether the intern receives a free meal in his or her educational institution during school days. Internship refers to an internship that forms part of the studies, an on-the-job learning period or a working life orientation period for pupils and immigrants (TET). If the intern receives a free meal during his or her school days from his or her educational institution, no taxable benefit is formed from meals given during the internship, and the offered meal is not reported to the Incomes Register as a benefit. If the educational institute does not offer free meals, a benefit taxable as earned income is formed from the meal offered at the place of the internship, reported to the Incomes Register using the income type Other taxable income deemed earned income (316).  The fair value of the meal is reported as the amount of the received benefit instead of the tax value of the meal benefit. If the payer collects a reimbursement for the meal, only the taxable share is reported to the Incomes Register. 

In the case of a meal subsidy, the data is not reported to the Incomes Register. A meal subsidy is in question when the employer subsidises the meals of its employees in a different way than by giving the employees a meal benefit referred to in the fringe benefit decision. The employer typically makes an agreement with a restaurant, according to which the employer subsidises the meals of its employees by a certain euro amount per meal, and the restaurant correspondingly charges a lower price from the employees. If the amount of the subsidy does not exceed the indirect costs of the restaurant, the employee does not receive a taxable benefit. No benefit is established then even if the price paid by the employee is below the value of the meal benefit, and the subsidy is not reported to the Incomes Register.

1.3 Other taxable fringe benefits

The income type Other fringe benefit (317) is used for reporting the total sum of the employer's non-monetary benefits, including accommodation, telephone, and meal benefit, unless these are reported as separate income types in the Incomes Register.

Other benefits reported using this income type include garage, motorcycle and boat benefit, life and pension insurance premiums deemed wages, benefit from a non-personalised gift voucher, and fringe benefits received by a person working as a seafarer. A fringe benefit received when working as a seafarer and any reimbursement recovered from it must be accompanied by additional information to indicate that the payment was paid as seafarer’s income.

In connection with the income type Other fringe benefit (317), the employer must indicate which fringe benefits are included in the sum paid. This is done by providing the Benefit type: Accommodation benefit, Telephone benefit, Meal benefit, Other benefits. Several values may be selected for the same sum.

If, exceptionally, the fringe benefit is not subject to social insurance contributions, the payer reports this by using the Type of insurance information data group. More information on insurance is given in the instructions Reporting data to the Incomes Register: insurance-related data.

Example 26: The employer has paid the employee's pension or unemployment insurance contributions on behalf of the employee when it is no longer possible to withdraw these from the employee's wages. The amount of the employee's earnings-related pension insurance contribution is EUR 214.50 and the amount of the unemployment insurance contribution EUR 42.00, which means that the total amount of the insurance contributions is EUR 256.50. The amount paid by the employer is not considered as earnings from work forming the basis for an earnings-related pension, unemployment, or accident and occupational disease insurance contributions.

The employer reports the amount it paid to the Incomes Register using income type Other fringe benefit (317) and includes the Type of insurance information entry Subject to earnings-related pension insurance contribution: No, Subject to accident insurance and occupational disease insurance contribution: No and Subject to unemployment insurance contribution: No. The income is only subject to a health insurance contribution. Additionally, the employer reports the employee contributions it has paid using income types Employee's earnings-related pension insurance contribution (413) and Employee's unemployment insurance contribution (414) to have the payment taken into account as a deduction in the employee's taxation.

Example 26.
DATA TO BE REPORTED EUR

317 Other fringe benefit

Type of insurance information

Subject to earnings-related pension insurance contribution
Grounds for insurance contribution: No

Type of insurance information
Subject to unemployment insurance contribution
Grounds for insurance contribution: No

Type of insurance information
Subject to accident and occupational disease insurance contribution
Grounds for insurance contribution: No

256.50

413 Employee's pension insurance contribution

214.50

414 Employee's unemployment insurance contribution

42.00

If the employer pays, on behalf of the employee, pension or insurance contributions when it would still be possible to withdraw these from the wages, for example, because wages are still paid and the statutory deadline has no yet elapsed, this mainly constitutes earnings forming the basis for the employee’s pension, which is subject to earnings-related pension insurance contribution. In this case, the data is reported to the Incomes Register under the income type Other fringe benefit (317). As the income is subject to all insurance contributions, the information Type of insurance information need not be provided.

1.4 Reimbursement collected for other fringe benefits

The employer may withdraw the deductible from the employee’s net salary even for fringe benefits other than car benefit and the employer-subsidised commuter ticket. The deductible portion is reported to the Incomes Register under the income type Reimbursement collected for other fringe benefits (407). The income type Reimbursement collected for other fringe benefits (407) is used to report the share of the value of the fringe benefit collected from the employee. This income type is used to report the amount collected from the employee for fringe benefits other than a car benefit or employer-subsidised commuter ticket benefit. The value of the fringe benefit is also reported in full using its own income type. The income type Reimbursement collected for other fringe benefits is used to report the amount of the deductible collected from the employee.

A reimbursement collected for a fringe benefit must be reported in the same earnings payment report as the fringe benefit even if the reimbursement is collected in advance or later. If the collected reimbursement is not reported on the same earnings payment report as the fringe benefit, the reports remain erroneous from the perspective of the social insurers, as the insurance contributions are based on the wrong amount. For this reason, the insurers will later ask the payer to correct the report. 

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. The reimbursement collected for an employer-subsidised commuter ticket must be reported in full, however. The collected reimbursement reduces taxable income and earnings from work on which social insurance contributions are based. Even then, the fringe benefit is reported at its full taxable value, with the collected reimbursement not deducted from it.

Example 27: The employee received an accommodation benefit from the employer, the value of which is EUR 650. The employee pays EUR 200 for the accommodation benefit. In addition, the employee receives a telephone benefit of EUR 20. The employer can report the accommodation benefit and telephone benefit using a lower or higher level of detail.

Example 27.
MINIMUM LEVEL FOR REPORTING EUR COMPLEMENTARY REPORTING METHOD  EUR

317 Other fringe benefit

Benefit type: Accommodation benefit

Benefit type: Telephone benefit

670.00

301 Accommodation benefit

650.00

 

 

330 Telephone benefit

20.00

407 Reimbursement collected for other fringe benefits

200.00

407 Reimbursement collected for other fringe benefits

200.00

If the employer collects a reimbursement from the employee for a meal benefit, which corresponds to the benefit's taxable value, the information is reported to the Incomes Register as Reimbursement for a meal benefit corresponds to taxable value: Yes. The income type Meal benefit (334) must still be given, but the amount can be left blank.  If the employer collects a reimbursement from the employee for the meal benefit, corresponding to the benefit's taxable value, the amount of the meal benefit may not be reported under the income type Other fringe benefit (317) and by providing the information Benefit type: Meal benefit, because information on other fringe benefits can also be provided in the same report using this income type. The amount of meal benefit in euros cannot be separated from the total sum.

Example 28: The employee received an accommodation benefit from the employer, the value of which is EUR 650, plus a telephone benefit of EUR 20. In addition, the employee has received a meal benefit of EUR 200, and the employer has withdrawn a sum corresponding to the taxable value of the meal benefit from the employee's net salary. The employer can report the accommodation benefit and telephone benefit using a lower or higher level of detail.

Example 28.
MINIMUM LEVEL FOR REPORTING EUR ALTERNATIVE METHOD EUR

317 Other fringe benefit

Benefit type: Accommodation benefit

Benefit type: Telephone benefit

670.00

301 Accommodation benefit

650.00

 

 

330 Telephone benefit

20.00

334 Meal benefit

Reimbursement for a meal benefit corresponds to taxable value: Yes

 

334 Meal benefit

Reimbursement for a meal benefit corresponds to taxable value: Yes

 

If the employer collects only a part of the meal benefit's taxable value from the employee, the amount of the meal benefit is reported to the Incomes Register either by using the income type Meal benefit (334) or by using the income type Other fringe benefit  (317) and specifying Type of benefit: Meal benefit. The reimbursement collected from the employee reduces the amount of taxable meal benefit. The euro amount collected for the meal benefit is reported using the income type Reimbursement collected for other fringe benefits (407).

Example 29: The employee has received a meal benefit loaded on a payment card from the employer. The employer loads the card with a meal benefit with a nominal value of EUR 10.40 for 21 days, totalling EUR 218.40. The taxable value of fringe benefit is 75% of the nominal value, or EUR 163.80 (EUR 7.80 per meal). The employer has collected half of the given meal benefit from the employee's wages, or EUR 81.90.

Example 29.
MINIMUM LEVEL FOR REPORTING  EUR COMPLEMENTARY REPORTING METHOD EUR

317 Other fringe benefit

Benefit type: Meal benefit

163.80

334 Meal benefit

163.80

407 Reimbursement collected for other fringe benefits

81.90

407 Reimbursement collected for other fringe benefits

81.90

If the fringe benefit reported with the income type Other fringe benefit (317) is not subject to social insurance contributions and the payer has reported this by using the Type of insurance information data group, the equivalent Type of insurance information data must also be added to the income type Reimbursement collected for other fringe benefits (407), insofar as the collected reimbursement concerns the share of the benefit which is not subject to social insurance contributions. Even though the income type, by default, is not subject to social insurance contributions, the payer must confirm the data in the report as described above. This ensures that the Income Register's data users will obtain the correct data.

Example 30: An income earner receives an accommodation benefit of EUR 750, from which the payer has collected EUR 150 as reimbursement. Social insurance contributions are paid from the accommodation benefit. In addition, the employer issues a benefit of EUR 180, which is not subject to earnings-related pension, unemployment or accident and occupational disease insurance contributions. The payer has collected EUR 30 as reimbursement from this benefit.

Example 30.
MINIMUM LEVEL FOR REPORTING  EUR COMPLEMENTARY REPORTING METHOD EUR

317 Other fringe benefit

750.00

301 Accommodation benefit

750.00

317 Other fringe benefit

Insurance information type:
Subject to earnings-related pension insurance contribution
Grounds for insurance contribution: No

Insurance information type:
Subject to unemployment insurance contribution
Grounds for insurance contribution: No

Insurance information type:
Subject to accident and occupational disease insurance contribution
Grounds for insurance contribution: No

180.00

317 Other fringe benefit 

Insurance information type:
Subject to earnings-related pension insurance contribution
Grounds for insurance contribution: No

Insurance information type:
Subject to unemployment insurance contribution
Grounds for insurance contribution: No

Insurance information type:
Subject to accident and occupational disease insurance contribution
Grounds for insurance contribution: No

180.00

 

407 Reimbursement collected for other fringe benefits

150.00

407 Reimbursement collected for other fringe benefits

150.00

407 Reimbursement collected for other fringe benefits

Insurance information type:
Subject to earnings-related pension insurance contribution
Grounds for insurance contribution: No

Insurance information type:
Subject to unemployment insurance contribution
Grounds for insurance contribution: No

Insurance information type:
Subject to accident and occupational disease insurance contribution
Grounds for insurance contribution: No

30.00

407 Reimbursement collected for other fringe benefits

Insurance information type:
Subject to earnings-related pension insurance contribution
Grounds for insurance contribution: No

Insurance information type:
Subject to unemployment insurance contribution
Grounds for insurance contribution: No

Insurance information type:
Subject to accident and occupational disease insurance contribution
Grounds for insurance contribution: No

30.00

 

If there is an error in the amount of the reported fringe benefit, the amount of the fringe benefit must be corrected on the report for the original month when the fringe benefit was used. The fringe benefit cannot be an unjust enrichment, because the person has had access to the benefit during that time. In certain situations, the share of the fringe benefit can, however, be collected from monetary wages. In this case, the employer must report the collected amount as reimbursement collected for fringe benefits. Correcting fringe benefits is described in more detail in Section 4.10, Collecting fringe benefits, of instructions Correcting data in the Incomes Register.

1.5 Deadline for reporting fringe benefits and the usage principle

Before 2020, fringe benefits were, as a rule, reported to the Incomes Register according to the usage principle, which means that the benefit is income for the time period during which it was available to the employee for use. The earnings payment report was submitted on the basis of the time the benefit was used.

As of 2020, fringe benefits still must be reported no later than on the fifth day of the calendar month following the fringe benefit's accrual month. If an employee receives only a fringe benefit without being paid monetary wages, data on the amount of the benefit must be reported to the Incomes Register monthly, no later than on the fifth day of the month following the accrual month. The payment date specified on the earnings payment report must be in the month during which the benefit was available to the income earner in accordance with the usage principle; for example, the last day of the month.

As of 2020, fringe benefits can always be reported no later than on the fifth day of the month following the accrual month, regardless of the time of the month when the monetary wages were paid.

Example 31: Wages accrued in November are paid on 15 November. The payer can report the November fringe benefit together with the monetary wages to the Incomes Register no later than on 20 November, or separately no later than on 5 December.

If monetary wages are paid for the fringe benefit's accrual month during the calendar month following the accrual month, the fringe benefit can also be reported as income for the calendar month following its accrual month. The report must then be submitted no later than on the fifth day of the calendar month following the month as the income for which the fringe benefit was reported.

Example 32: The employee’s monthly wages are EUR 2,300. He also has the following continuous fringe benefits: a housing benefit with a value of EUR 700 and a telephone benefit with a value of EUR 20. The employee's monthly wages are always paid on the 25th of the next month, i.e. the monetary wages accrued in February are paid on 25 March.

The employer can report the fringe benefits for February in four different ways:

  • in connection with the monetary wages paid in February: the wages accrued in January are paid on 25 February, and the fringe benefits for February are reported together with the monetary wages no later than on 2 March
  • separately as income for February, no later than on 5 March
  • in connection with the monetary wages paid in March: the wages accrued in February are paid on 25 March, and the fringe benefits for February are reported together with the monetary wages no later than on 30 March (Example 25, Table 1)
  • separately as income for March, no later than on 5 April (Example 25, Table 2)

If the employer reports the fringe benefits for February in connection with the monetary wages for February paid in March, the following data is reported:

Example 32, table 1/2.
DATA TO BE REPORTED

Payment date: 25.3.20xx

Pay period: 01.03.-31.03.20xx

MINIMUM LEVEL FOR REPORTING EUR COMPLEMENTARY REPORTING METHOD EUR

101 Total wages

Earnings period: 01.02.-28.02.20xx

2300.00

201 Time-rate pay

Earnings period: 01.02.-28.02.20xx

2300.00

317 Other fringe benefit

Type of benefit: Telephone benefit

Type of benefit: Accommodation benefit

720.00

301 Accommodation benefit

700.00

 

 

 

330 Telephone benefit

20.00

402 Withholding tax

720.00

402 Withholding tax

720.00

413 Employee's pension insurance contribution

215.93

413 Employee's pension insurance contribution

215.93

414 Employee's unemployment insurance contribution

42.28

414 Employee's unemployment insurance contribution

42.28

Alternatively, fringe benefits can be reported separately by the fifth day of the month following the accrual month, even if the monetary wages must be reported within five calendar days of the payment. If the employer reports the fringe benefits as income for March, separately from the wages, a day in March must be entered as the payment date; for example, the last day of the month:

Example 32, table 2/2.
DATA TO BE REPORTED

Payment date: 31.3.20xx

Pay period: 01.03.-31.03.20xx

MINIMUM LEVEL FOR REPORTING

EUR

COMPLEMENTARY REPORTING METHOD

EUR

317 Other fringe benefit

Type of benefit: Telephone benefit

Type of benefit: Accommodation benefit

720.00

301 Accommodation benefit

700.00

 

 

330 Telephone benefit

20.00

If wages are paid for the fringe benefit's accrual month on several payment dates, the fringe benefit can be reported no later than on the fifth day following the last payment of wages. In this situation, it does not matter in which month the last payment of wages takes place. Alternatively, the fringe benefit must be reported on the fifth day of the month following the last payment of wages.

Example 33: The employee is paid wages every two weeks. The wages accrued from 1 to 15 July, EUR 1,700, are paid at the end of July on 31 July. The wages accrued from 16 to 31 July, EUR 1,700, are paid on 15 August. The employee's fringe benefits for June are a car benefit with a value of EUR 600 and a meal benefit with a value of EUR 150. The car and meal benefits for July can be reported in connection with the wages paid on either 31 July or 15 August. Alternatively, the fringe benefits for July can be reported on a separate report, either on 5 August or no later than on 5 September. If the fringe benefits are reported separately on 5 September, a payment date in August must be entered as the payment date; for example, the last day of the month.

Example 33, table 1/2.
DATA TO BE REPORTED

Payment date: 15.8.20xx

Pay period: 16.07.-31.07.20xx

MINIMUM LEVEL FOR REPORTING EUR COMPLEMENTARY REPORTING METHOD EUR

101 Total wages

Earnings period: 16.07.-31.07.20xx

1700.00

201 Time-rate pay

Earnings period: 16.07.-31.07.20xx

1700.00

304 Car benefit

Type of company car benefit: Limited car benefit

Car age group: B

600.00

304 Car benefit

Type of company car benefit: Limited car benefit

Car age group: B

600.00

317 Other fringe benefit

Type of benefit: Meal benefit

150.00

334 Meal benefit

150.00

402 Withholding tax

612.50

402 Withholding tax

612.50

413 Employee's pension insurance contribution

175.17

413 Employee's pension insurance contribution

175.17

414 Employee's unemployment insurance contribution

34.30

414 Employee's unemployment insurance contribution

34.30

Alternatively, fringe benefits can be reported separately by the fifth day of the month following the accrual month, even if the monetary wages must be reported within five calendar days of the payment:

Example 33, table 2/2.
DATA TO BE REPORTED

Payment date: 31.8.20xx

Pay period: 16.07.-31.07.20xx

MINIMUM LEVEL FOR REPORTING EUR COMPLEMENTARY REPORTING METHOD EUR

304 Car benefit

Type of company car benefit: Limited car benefit

Car age group: B

600.00

304 Car benefit

Type of company car benefit: Limited car benefit

Car age group: B

600.00

317 Other fringe benefit

Type of benefit: Meal benefit

150.00

334 Meal benefit

150.00

If the employee's fringe benefit changes, the payroll department may not be informed of the change until after the payment of wages. If the amount of the fringe benefit reported to the Incomes Register has been incorrect, the submitted report must be corrected.

Example 34: The employee’s continuous fringe benefits are car and telephone benefits. The employee's earnings payment report for May has been submitted to the Incomes Register on 20 May 2021 using the more detailed complementary reporting method, i.e., the separate Car benefit and Telephone benefit income types:

Example 34, table 1/2.
DATA TO BE REPORTED EUR

201 Time-rate pay

3280.00

304 Car benefit

Type of car benefit: Limited car benefit

Car age group: A

450.00

330 Telephone benefit

20.00

402 Withholding tax

630.00

413 Employee's earnings-related pension insurance contribution

268.12

414 Employee’s unemployment insurance contribution

52.22

On 10 June 2021, the payroll accounting is informed of an employee’s new company car. The car was replaced on 1 May 2021 and the value of the new fringe benefit car is EUR 520. The earnings payment report for May must be corrected, as well as the employer’s separate report for May. Withholding of tax, the employee’s earnings-related pension insurance contribution and unemployment insurance contribution are reported as collected from the employee's wages for May. 

Example 34, table 2/2.
REPLACEMENT REPORT
DATA TO BE REPORTED EUR

201 Time-rate pay

3280.00

304 Car benefit

Type of car benefit: Limited car benefit

Car age group: A

520.00

330 Telephone benefit

20.00

402 Withholding tax

630.00

413 Employee's earnings-related pension insurance contribution

268.12

414 Employee's unemployment insurance contribution

52.22

Employee’s earnings-related pension insurance contribution and employee’s unemployment insurance contribution, not collected in May, are collected and employer contributions are paid in connection with the following wage payment in June. In addition, the amount of withholding tax is corrected in the following wage payment (withholding from the sum: time-rate pay 3,280+car benefit 520+correction of the car benefit for May 70). Correcting fringe benefits is described in more detail in Section 4.10, Collecting fringe benefits, of instructions Correcting data in the Incomes Register.

If the employee’s payday is in the middle of the month, for example, the information on the amount of meal benefit is submitted to the Incomes Register before the total amount of meal benefit is known for certain in the month in question (for example, the employer does not know if the employee is going to be absent). It is therefore considered sufficient that the meal benefit is balanced to the correct amount in the next earnings payment report at the latest. The amount of meal benefit for December must be corrected by submitting a substitute report for December, in order to correct the amount of meal benefit for the right tax year. If, however, wages accrued in December are paid in January, the data on the amount of the meal benefit for December can be reported on the January report. If the meal benefit is implemented using a balance-based payment instrument (such as a payment card), the balancing must be done on the last earnings payment report for the year. For more information, see the Tax Administration’s instructions (in Finnish) Fringe benefits in taxation.

1.6 Reporting the tax withheld from fringe benefits

The data is reported to the Incomes Register according to the payment principle. Correspondingly, the taxes withheld are reported on the report for the pay period during which they were withheld from the wages. If the employee's wages solely comprise non-monetary benefits, such as fringe benefits, taxes cannot be withheld, and therefore they also cannot be reported. Taxes withheld from fringe benefits are reported only when they are actually collected from the employee or the employee pays an amount corresponding to the withholding to the employer.

Taxes are withheld from non-monetary benefits such as fringe benefits differently, depending on whether the benefit is granted repeatedly or sporadically. If the employee is granted a non-monetary benefit repeatedly, taxes are withheld every pay period by adding the value of the benefit to the monetary amount paid. The amount of the taxes withheld is then reported on the earnings payment report using its own income type, 402 Withholding tax.

If the employee is granted a non-monetary benefit sporadically, taxes can be withheld during the same calendar year in two different ways:

• The employer adds the full value of the benefit to the monetary amount paid during the next pay period after the granting of the benefit, and withholds taxes from the total amount.
• The employer divides the value of the benefit to equal instalments, adds the instalments to the monetary amounts paid during the payment months following the granting of the benefit, and withholds taxes from the total amounts. All instalments must be added to amounts paid during the same calendar year.

The latter method must be used when the euro amount of the benefit is high and the monetary wages paid to the employee are insufficient for withholding taxes. If the value of a sporadic benefit is no more than EUR 400 per year, tax may be withheld once a year, no later than in connection with the withholding from the last monetary payment during the calendar year (decree on tax prepayments (Ennakkoperintäasetus 1124/1996), section 9). Even if the withholding is divided over the same calendar year as described above, the fringe benefit must be reported in full when the benefit was available for use or when monetary wages are paid for the benefit's accrual month.

Example 35: During the August pay period, the employee was granted a sporadic fringe benefit with a value of EUR 8,000. The employee's monthly wages are EUR 2,300 and the withholding rate is 20%. The employee's wages in August are therefore EUR 10,300, and the amount of the monetary wages is insufficient to cover withholding in August. The employer must divide the amount of the fringe benefit to equal instalments over the months following the payment. In the wage payments for the rest of the year (September to December), one quarter of the amount of the fringe benefit is thus added to the amount of the wages (8,000 / 4 = 2,000), and tax is withheld from the total amount (2,300 + 2,000 = 4,300).

However, the fringe benefit must be reported to the Incomes Register in full on the August earnings payment report. It must be noted, that the fringe benefit divided into equal instalments is no longer reported to the Incomes Register on the earnings payment reports for September to December, though it is included in payroll calculations and tax is withheld from it during the months in question. Tax is withheld from increased amounts during the wage payments from September to December.

Report for August:

Example 35, table 1/2.
NEW REPORT
DATA TO BE REPORTED EUR

201 Time-rate pay

2300.00

317 Other fringe benefit

Type of benefit: Other benefits

8000.00

402 Withholding tax (20% from EUR 2,300)

460.00

413 Employee's earnings-related pension insurance contribution (from EUR 10,300)

736.45

414 Employee's unemployment insurance contribution (from EUR 10,300)

144.20

Reports for September–December:

Example 35, table 2/2.
NEW REPORT
DATA TO BE REPORTED EUR

201 Time-rate pay

2300.00

402 Withholding tax (20 % from EUR 4 300 )

860.00

413 Employee's earnings-related pension insurance contribution (from EUR 2 300)

164.45

414 Employee's unemployment insurance contribution (from EUR 2 300)

32.20

2 Reimbursements of expenses

2.1 Tax-exempt reimbursement of travel expenses paid to employees

Reimbursement of travel expenses received from the employer for business trips, daily allowance, meal allowance, allowance for accommodation, night travel allowance, and allowance for border crossing is not taxable income if it meets the requirements for being tax-exempt laid down in law. Reimbursement of travel expenses includes kilometre allowances, including increases, incurred from the use of a vehicle during a commute. Tax-exempt kilometre allowances, daily allowances and meal allowances are reported to the Incomes Register.

Reimbursement of travel expenses paid to an employee is tax-exempt only insofar as it has been paid in accordance with the law or the decision of the Tax Administration on tax-exempt reimbursement for travel expenses. If the reimbursement of travel expenses has been paid contrary to the time and kilometre limits in accordance with the Tax Administration’s decision, it is entirely taxable and is reported as wages to the Incomes Register. If the employer pays the employee reimbursement of travel expenses in amounts exceeding the Tax Administration's decision, only the amount equalling the amount specified in the Tax Administration's decision of the reimbursement paid by the employer is tax-exempt income. The part exceeding this amount is taxable wages for the employee.

No tax is withheld or social insurance contributions are paid for tax-exempt reimbursement of travel expenses.

Taxable reimbursement of travel expenses or reimbursement of expenses must always be reported to the Incomes Register. Tax-exempt reimbursement of expenses is reported in the case of daily allowances, meal allowances, kilometre allowances, or other such situations referred to in the Tax Administration's decision on a general information-reporting requirement. The obligation to report these payments to the Incomes Register matches the previous reporting obligation in taxation. Tax-exempt reimbursements of expenses can be reported by the fifth day of the month following the payment month. The payments can be reported on one report once per month, even if there are several payment dates for reimbursements of expenses during the same month. The date of the last payment of reimbursements of expenses during the month is then entered as the payment date on the report.

If an employee is paid reimbursements for commuting based on a document provided by a transport operator (such as a train ticket), and the requirements for paying tax-exempt reimbursements of expenses are met, these reimbursements are not reported to the Incomes Register. Accommodation allowances, night travel allowances, or border-crossing allowances are not reported to the Incomes Register if they are paid in accordance with the maximum amounts specified in the Tax Administration's decision.

A travel advance is an amount paid by the employer to cover costs incurred by, for example, a business trip. The travel advance does not need be reported to the Incomes Register. If, however, some of the travel advance remains unused and tax-exempt reimbursements of expenses paid to the income earner are offset from the remaining amount, the employer must report the share that was deemed expenses paid to the income earner as a daily allowance, kilometre allowance or an expense allowance. The obligation to report data arises once the travel invoice has been prepared and reimbursements of expenses paid to the income earner have been offset from the advance that was too high.

2.1.1 Kilometre allowance (tax-exempt)

Tax-exempt kilometre allowance can be paid both to employed persons and persons who are not employed but who receive personal fees referred to in the prepayment act (ennakkoperintälaki 1118/1996), such as meeting or lecture fees.

The amount of tax-exempt kilometre allowance is reported under the income type Kilometre allowance (tax-exempt) (311). In addition, the Number of kilometres is reported. In this section, the number of kilometres on which the tax-exempt kilometre allowance paid is based, is reported. The data on the number of kilometres can be submitted by pay period. At the latest, data on the number of kilometres based on which tax-exempt kilometre allowances have been paid during the year in question must, however, be submitted in the final report of the year.

In certain cases, the kilometre allowance paid for the use of a private car can be increased (such as when transporting other persons). The grounds for the increase are laid down in section 9(1) of the Tax Administration's decision. Report the total amount of the allowances paid, including the increases, using the income type Kilometre allowance (tax-exempt) (311).

2.1.2 Reimbursement of travel expenses between residence and specific place of work in the construction sector

According to the collective agreement of the construction sector, daily travel expenses between residence and place of work are reimbursed according to a special table. If the reimbursement according to the collective agreement is, at most, equal to the kilometre allowance specified in the Tax Administration Decision, the reimbursement is tax-exempt. Reimbursement higher than this is taxable for the part exceeding the maximum amount according to the decision. Reporting of taxable allowances is described in Section 2.2 Taxable reimbursement of travel expenses paid to employees.

The total amount of reimbursement of travel expenses paid according to the collective agreement of the construction sector is reported under the income type Kilometre allowance (tax-exempt) (311). The number of kilometres is not reported under Number of kilometres.

2.1.3 Daily allowance

A daily allowance is a tax-exempt reimbursement of a reasonable increase in meal and other living costs incurred by the recipient due to a business trip. Each year, the Tax Administration will confirm the maximum tax-exempt amounts in the decision it issues on tax-exempt reimbursement of travel expenses.

The total amount of tax-exempt daily allowances and meal allowances is reported under the income type Daily allowance (331). In addition, the Type of daily allowance is reported. Several values may be selected for the same sum. The type of daily allowance can be:

  • meal allowance,
  • domestic full daily allowance,
  • domestic partial daily allowance,
  • international daily allowance,
  • tax-exempt reimbursements relating to working abroad.

If only half the amount of daily allowance is paid because of a meal offered by the employer, the half amount of daily allowance is also reported under Type of daily allowance as domestic full daily allowance or international daily allowance. Correspondingly, any half amount of domestic daily allowance is reported under Type of daily allowance as domestic partial daily allowance.

Meal allowances are reported under the income type Daily allowance only if they are not reported as a separate Meal allowance (303) income type, see Section 2.1.4 Meal allowance.

The following tax-exempt allowances related to working abroad are also reported in the income type Daily allowance (331):

  • the moving and travel costs of the taxpayer and their family member to the country of work and back;
  • regular private household staff abroad, paid for by the employer; and
  • primary and secondary education for children, paid for by the employer.

The Type of daily allowance information is reported as Tax-exempt reimbursements relating to working abroad. Tax-exempt reimbursements of expenses related to work abroad mean tax-exempt reimbursements connected to work abroad as referred to in section 76(1)(5) of the act on income tax (tuloverolaki 1535/1992). The Type of daily allowance entry in question is used to report all tax-exempt expenses related to work abroad, such as flight expenses, road tolls and other expenses. This being the case, expenses based on a document provided by a transport operator are also reported using the Type of daily allowance entry in question if the expense items were related to work abroad pursuant to section 78 of the act on income tax.

2.1.4 Meal allowance

Tax-exempt meal allowance can be paid for meal expenses incurred from a business trip, if the employee does not have the opportunity to have a meal at their normal eating-place during their lunch break and the meal has not been arranged, for example, as a meal that forms part of the course package paid for by the employer. A tax-exempt meal allowance cannot be paid together with a tax-exempt daily allowance for the same business trip.

Report only the amounts of tax-exempt meal allowances under the income type Meal allowance (303). Grounds for tax exemption are laid down in the Tax Administration’s decision on tax-exempt reimbursement of travel expenses. If the allowance is paid in deviation from the grounds laid down in the decision, the payment should be reported as wages subject to social insurance contributions by using the income types for wages, such as time-rate pay. If a higher allowance is paid than what is laid down in the Tax Administration’s decision, the share in excess of the maximum amount must be reported using the income types for wages.

A meal allowance can be reported separately, but it must be reported as at least a total sum, using the income type Daily allowance (331). In such a case, the Type of other reimbursement or benefit data related to the income type must also be used to report that the allowance reported under the income type Daily allowance includes a meal allowance.

If the meal allowance is reported separately, it is not reported under the income type Daily allowance.

Example 36: An employee’s gross wages total EUR 3,488, consisting of EUR 3,100 in commission pay, EUR 110 in working condition compensation, and EUR 150 compensation for accrued time off. In addition to the monetary wages, the income earner has received a meal benefit for 20 days, with a total value of EUR 128. The employee is also paid a full daily allowance of EUR 123 for three days and a meal allowance of EUR 10.25 for one day as compensation for expenses arising from a business trip, and EUR 61.50 of kilometre allowance for a 150-kilometre business trip made in the employee’s own car.

The employer may report the information in less detail under the income type Total wages (101) or alternatively, report the information in more detail using complementary income types. Correspondingly, the meal allowance can be reported using its own income type or as a total sum using the income type Daily allowance.

Example 36.
MANDATORY MINIMUM LEVEL
  ALTERNATIVE METHOD  
REPORTING METHOD 1 EUR REPORTING METHOD 2 EUR

101 Total wages

3360.00

 

220 Commission

3100.00

 

 

218 Working condition compensation

110.00

 

 

225 Compensation for accrued time off

150.00

317 Other fringe benefit

Benefit type: Meal benefit

128.00

334 Meal benefit

128.00

331 Daily allowance

Type of daily allowance: Meal allowance

Type of daily allowance: Full daily allowance

133.25

331 Daily allowance

Type of daily allowance: Full daily allowance

123.00

 

 

303 Meal allowance

10.25

311 Kilometre allowance (tax-exempt)

Number of kilometres: 150*

61.50

311 Kilometre allowance (tax-exempt)

Number of kilometres: 150*

61.50

* Information on the number of kilometres can be submitted by pay period, but must be submitted in the last report of the year at the latest.

2.2 Taxable reimbursement of travel expenses paid to employees

The reimbursement of travel expenses is entirely taxable, if it has been paid contrary to the time and kilometre limits in accordance with the Tax Administration’s decision. The reimbursement is equivalent to wages.

If the kilometre allowances are paid contrary to the Tax Administration's decision, they are reported to the Incomes Register either under the income type Total wages (101) (lower-detail reporting method 1) or income type Kilometre allowance (taxable) (209) (higher detail reporting method 2).

If the kilometre allowance has been paid in accordance with the Tax Administration’s decision, but in a higher amount than specified as tax-exempt in the decision, some of the allowance is wages and some is tax-exempt. The part exceeding the limits mentioned in the Tax Administration’s decision constitute wages. This part is reported either under the income type Total wages (101) or Kilometre allowance (taxable) (209). Only tax-exempt allowances are reported under the income type Kilometre allowance (tax-exempt) (311). The number of tax-exempt kilometres is reported under Number of kilometres.

Example 37: A total of EUR 300 in kilometre allowance was paid to an employee. The tax-exempt amount in accordance with the Tax Administration’s decision would have been EUR 200. The employee’s monetary wages are reported as EUR 100.

Number of kilometres: 
Example 37.
MANDATORY MINIMUM LEVEL   ALTERNATIVE METHOD  

REPORTING METHOD 1

EUR

REPORTING METHOD 2

EUR

101 Total wages

100.00

209 Kilometre allowance (taxable)

100.00

311 Kilometre allowance (tax-exempt)

200.00

311 Kilometre allowance (tax-exempt)

200.00

Number of kilometres: 485   Number of kilometres: 485  

By default, the income type Kilometre allowance (taxable) (209) is subject to social insurance contributions.

If the kilometre allowance is not subject to a social insurance contribution, the payer must use the separate Type of insurance information entry to report that the income is not subject to the specified insurance contribution. For more detail, see the instructions Reporting data to the Incomes Register: insurance-related data. This kind of situation may occur when, for example, the employer pays an employee taxable kilometre allowances on more lenient grounds than the decision by the Tax Administration as based on a collective agreement and the amount of the allowance does not exceed the maximum amounts of tax-exempt payments specified in the Tax Administration's decision on expenses. The income is then not subject to earnings-related pension, unemployment, or accident and occupational disease insurance contributions.

If the daily allowances or other compensations paid under the income type Daily allowance (331) are paid on grounds more lenient than those in the Tax Administration’s decision (for example full daily allowance for a 5-hour business trip), they must be reported under the income type Total wages (101) or Other compensation (216), and they are subject to social insurance contributions.

If daily allowance and meal allowance  paid on more lenient grounds has been agreed in a collective agreement, it is not subject to pension, unemployment or accident and occupational disease insurance contributions. In such cases, the employer reports the income using the income type Other compensation and specifies what part of the payment is subject to pension insurance contribution, unemployment insurance contribution, and accident and occupational disease insurance contributions. The compensation is subject to the employer's health insurance contribution.

Example 38: The employee has been paid EUR 2,000 in wages. In addition, the employee has been paid a total of EUR 400 of daily allowance and meal allowance under the collective agreement. The tax-exempt amount in accordance with the Tax Administration’s decision would have been EUR 236.50. of which the daily allowance accounts for EUR 215 and the meal allowance EUR 21.50. The taxable portion, EUR 163.50, of the daily allowances and meal allowances must also be reported as wages for the employee.

If the employer uses reporting method 2, the employer reports the taxable amount using the income type Other compensation and combines the Type of insurance information data with the income type. Because the income type Other compensation includes the assumption that the payment is subject to social insurance contributions, it must be reported separately, in this situation, that the income paid is not subject to earnings-related pension, unemployment or accident and occupational disease insurance contributions. In the example case, the income is subject to employer's health insurance contribution, but not other social insurance contributions.

Example 38.
MANDATORY MINIMUM LEVEL ALTERNATIVE METHOD
REPORTING METHOD 1 EUR REPORTING METHOD 2 EUR

101 Total wages

Type of insurance information:
Subject to earnings-related pension insurance contribution
Grounds for insurance contribution: No

Type of insurance information:
Subject to accident and occupational disease insurance contribution
Grounds for insurance contribution: No

Type of insurance information:
Subject to unemployment insurance contribution
Grounds for insurance contribution: No

2163.50

201 Time-rate pay

2000.00

 

 

315 Other taxable benefit for employees

Type of insurance information:
Subject to earnings-related pension insurance contribution
Grounds for insurance contribution: No

Type of insurance information:
Subject to accident and occupational disease insurance contribution
Grounds for insurance contribution: No

Type of insurance information:
Subject to unemployment insurance contribution
Grounds for insurance contribution: No

163.50

102 Total wages subject to earnings-related pension insurance contribution

2000.00

 

 

106 Total wages subject to accident and occupational disease insurance contribution

2000.00

 

 

105 Total wages subject to unemployment insurance contribution

2000.00

 

 

331 Daily allowance

Type of daily allowance: Domestic full daily allowance

Type of daily allowance: Meal allowance

236.50

331 Daily allowance

Type of daily allowance: Domestic full daily allowance

215.00

 

 

303 Meal allowance

21.50

2.3 Taxable reimbursements of moving and travel expenses

Section 69 c of the act on income tax (tuloverolaki 1535/1992) entered into force in the beginning of 2020 provides that 50% of the moving and travel expenses of an employee and their family member paid by the employer is tax-exempt. The relief requires that the move takes place due to the location of the employee's place of work. Expenses directly related to moving are deemed to be moving expenses. These include, for example, expenses incurred from packing, unpacking and transporting property.

Trips between the old and new housing taken during the move are deemed to be trips directly related to the move. If a trip directly related to the move is taken in the employee's own vehicle, the employer may reimburse the trip against a travel invoice. In these situations, too, half of the reimbursement paid by the employer is tax-exempt income and half is taxable income. In these situations, no more than the maximum amount of tax-exempt kilometre allowance confirmed by the Tax Administration is deemed to be a moving expense referred to in the provision. If the employer reimburses more than the maximum amount of the tax-exempt kilometre allowance for the trip, half of the amount not exceeding the maximum amount of kilometre allowance confirmed by the Tax Administration is tax-exempt income. The part of the reimbursement exceeding the maximum amount is taxable earned income in its entirety. The requirements for tax-exempt moving and travel expenses are described in more detail in the Tax Administration’s instructions Taxation of Reimbursement of Business Travel Expenses. 

The part of the moving and travel expenses reimbursed by the employer that is taxable as earned income, or 50% of the expenses paid by the employer, are reported to the Incomes Register as earned income. These expenses are deemed to be the employee's and their family member's living expenses. The data is reported using income type Other compensation (216). In the situations described above, the income is subject to all social insurance contributions.   

The tax-exempt part of moving and travel expense reimbursements is not reported to the Incomes Register.

2.4 Reimbursement of travel expenses paid by public sector entities

The state or its governmental institutions, municipalities or joint municipal authorities, churches, parishes or associations of parishes, and universities must also report all tax-exempt reimbursement of travel expenses paid in accordance with the Tax Administration’s decision. Even taxable reimbursement of expenses must be reported. The information is reported as stated in Sections 2.1 Tax-exempt reimbursement of travel expenses paid to employees and 2.2 Taxable reimbursement of travel expenses paid to employees. When reporting, public sector entities use the Payer type Public sector or State.

The reporting of reimbursement of expenses paid to persons participating in unpaid voluntary work in a public sector organisation is described in the instructions Rewarding employees, payments made to an entrepreneur and other special circumstances.

2.5 Taxable reimbursement of expenses

Taxable reimbursement of expenses is paid to employees as compensation for the costs directly incurred in the performance of work. The income type Taxable reimbursement of expenses (353) is used to report the total amount of taxable reimbursements of expenses that are not itemised using other income types.

The income type Taxable reimbursement of expenses (353) is used to report taxable reimbursement of expenses paid for non-business travel from which the employer does not withhold tax. These reimbursements of expenses are paid in addition to wages. These include costs incurred from obtaining tools and materials. Compensation for these costs is not considered wages when tax is withheld and the employer does not add them to the wages reported to the Incomes Register, for example in the income type Total wages (101) or Time-rate pay (201).

If an employee has acquired tools and work materials on behalf of the employer, their expenses are not reported if the employer has reimbursed the employee for them against a receipt.

The employer does not withhold tax or pay social insurance contributions from taxable reimbursements of expenses. However, reimbursements are taxable income for the employee. The employee must request the deduction of the actual expenses on their pre-completed tax return.

Example 39: The employer pays the employee the costs incurred from using a chainsaw. The wages include EUR 1,400 of pay for chainsaw work and EUR 600 of pay for other work. In addition to the wages, the employer pays EUR 450 in compensation for the use of the chainsaw. Tax is withheld from EUR 2,000.

The amount of wages paid for chainsaw work is not reported to the Incomes Register separately. Instead, the employee declares this information in their personal taxation in order to have the correct amount of chainsaw deduction calculated. 

EUR 2,000 is reported under the income type Total wages (101) or Time-rate pay (201) and EUR 450 under the income type Taxable reimbursement of expenses (353).

Example 39.
DATA TO BE REPORTED EUR

101 Total wages or 201 Time-rate pay

2000.00

353 Taxable reimbursement of expenses

450.00

402 Withholding tax from EUR 2,000

310.00

Example 40: A tool allowance, based on the collective agreement, is paid in the construction industry. No tax is withheld from or social insurance contributions paid for the reimbursement of such expenses. The amount of the reimbursement is reported under the income type Taxable reimbursement of expenses (353).

2.6 Deduction before withholding

Direct costs incurred from work, paid personally by the employee, are reported under the income type Deduction before withholding (419). The employer deducts these costs from the gross salary before withholding tax. Such expenses include expenses paid by the employee that are incurred from the use of a chainsaw, and other expenses arising from tools. Similarly, business travel expenses are such expenses, if the employer does not pay tax-exempt allowance for them in addition to wages. The Deduction before withholding income type is used only when the employee is paid wages or an athlete's fee, the employee him/herself has paid direct expenses incurred from performing work, and these expenses are deducted from the wages before withholding taxes.

In certain situations laid down in the law, the payer can also deduct such costs from the athlete's fee before withholding that were paid by the athlete himself or herself and that were directly incurred from sports.

Deduction made before withholding tax is reported under this income type. The amount of the deduction reported in this section must also be included in the salary reported to the Incomes Register. The maximum amount of deduction that can be reported is the amount of the payment.

Example 41: The employee has paid EUR 500 in expenses incurred from the use of a chainsaw. EUR 1,800 in wages was paid to the employee for the pay period. The wages consist of EUR 1,600 for chainsaw work and EUR 200 for other work. In accordance with the prepayment act (ennakkoperintälaki 1118/1996), tax is withheld (20 %) from EUR 1,300 (1,800–500).

EUR 1,800 is reported under the income type for wages and EUR 500 is reported under the income type Deduction before withholding (419).

Example 41.
DATA TO BE REPORTED EUR

101 Total wages or 201 Time-rate pay

1800.00

402 Withholding tax (from EUR 1,300)

260.00

419 Deduction before withholding

500.00

The employee may claim a chainsaw deduction in their taxation and provide an account of the amount of wages paid for work performed with a chainsaw. In the employee’s taxation, the deduction is calculated from the share of the wages paid for work performed with a chainsaw (EUR 1,600). If the employer has paid the costs of using the chainsaw, reporting is described in section 2.4 Taxable reimbursement of expenses.

Example 42: A folk musician is promised EUR 200 as total pay for a gig. Travel and travel expenses do not affect the gross amount paid. As travel expenses are not compensated separately in addition to wages but are included in the total pay, they are taxable.

The employer can calculate the amount from which to withhold tax by deducting the same amount as the tax-exempt reimbursable amount of travel expenses, based on an account given by the employee. The employer could compensate tax-exempt travel expenses for 51 kilometres, 43 cents per kilometre, i.e. EUR 21.93 and EUR 19 of partial daily allowance. The  amount subject to withholding is EUR 159.07 out of which the employer withholds 25 per cent. The employer's health insurance contribution is also paid for the same amount.

EUR 200 is reported under the income type for wages. EUR 40.93 is reported under the income type Deduction before withholding (419). Nothing is reported under the income types of tax-exempt reimbursements of travel expenses. The employee may claim travel expenses as a deduction in their personal taxation.

Example 42.
DATA TO BE REPORTED EUR

101 Total wages or 201 Time-rate pay

200.00

402 Withholding tax (from EUR 159.07)

39.76

419 Deduction before withholding

40.93

If the payer makes the deduction from income that is not subject to social insurance contributions, the payer must submit the Type of insurance information entry for the Deduction before withholding income type (419). The default for the Deduction before withholding income type is that it is not subject to social insurance contributions. Regardless of this, the payer must provide the Type of insurance information entry (Subject to social insurance contributions: No) if the deduction is made from income that is not subject to social insurance contributions. If income not subject to social insurance contributions is only reported on this report, the payer does not need to submit the Type of insurance information data.

Example 43: A third-party lecturer is paid a lecture fee of EUR 1,000. The lecturer has incurred EUR 150 in travel expenses. The payer does not separately reimburse the expenses; instead, the payer deducts the amount of the expenses from the fee before withholding taxes. The lecturer's withholding rate is 30%. The payer withholds taxes from EUR 850 and reports the data to the Incomes Register as follows:

Example 43.
DATA TO BE REPORTED EUR

214 Lecture fee

1000.00

402 Withholding tax (from EUR 850)

255.00

419 Deduction before withholding

150.00

If a single transaction includes the payment of wages subject to social insurance contributions and such wages in accordance with section 13 of the tax prepayment act (ennakkoperintälaki 1118/1996) that do not act as basis for social insurance contributions, and expenses which are deducted before withholding are allocated to either income, the payer must specify the Type of insurance information. This allows the deduction to be allocated to the correct income type.

If, in a single transaction, the payer deducts expenses from income subject to social insurance contributions and income from which no social insurance contributions are paid, the payer must report the deductions separately. Type of insurance information (Subject to social insurance contributions: No) must be specified for the deduction made from income from which no social insurance contributions are paid. Correspondingly, if the income from which the deduction was made was not subject to some individual social insurance contribution, such as the unemployment insurance contribution, the payer only needs to confirm that there was no obligation to provide this particular insurance.

Example 44: A person is paid EUR 2,900 in monthly wages and EUR 300 in waiting time compensation. The waiting time compensation is not subject to social insurance contributions. The person's withholding rate is 20%. The person has EUR 45 in expenses allocated to the waiting time compensation and EUR 100 in expenses allocated to the time-rate pay. The employer deducts both expense items from the person's income prior to withholding taxes. The employer reports the data to the Incomes Register as follows:

Example 44.
DATA TO BE REPORTED EUR

201 Time-rate pay

2900.00

217 Waiting time compensation

300.00

402 Withholding tax (from EUR 3055)

611.00

419 Deduction before withholding

100.00

419 Deduction before withholding

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

45.00

If the deduction before withholding is made from income subject to all social insurance contributions, the payer does not need to specify the Type of insurance information unless the payer also pays some other income not subject to social insurance contributions in the same transaction.

Example 45: A person is paid EUR 3,500 as monthly wages. Her withholding rate is 25%. In her work, she uses her own tools for which the employer does not pay a separate compensation. The payer deducts EUR 30 for the use of the employee's own tools before withholding and withholds taxes from EUR 3,470. Because the monthly wages paid are subject to all social insurance contributions, the payer does not need to specify the Type of insurance information. The payer reports the data to the Incomes Register as follows:

Example 38.
DATA TO BE REPORTED EUR

101 Total wages or 201 Time-rate pay

3500.00

402 Withholding tax (from EUR 3470)

867.50

419 Deduction before withholding

30.00

2.7 Other reimbursements of expenses

Reimbursements of expenses related to non-wage compensation for work and compensation for use as well as the reimbursement of travel expenses paid by a non-profit organisation are described in the instructions Reporting data to the Incomes Register: rewarding employees, payments made to an entrepreneur and other special circumstances. Of particular interest in these instructions are Section 3, Payments made to companies and entrepreneurs; Section 4, Compensation for use; Section 5.1.2, Athlete's fee; and Section 5.11, Reimbursement paid by a non-profit organisation and public sector organisation to volunteers.

A reimbursement of expenses of a shareholder in a general partnership or a limited partnership, handled in the payroll accounting and invested in the company as a private investment, is reported to the Incomes Register in an earnings payment report using an income type suitable for the reimbursement in question, such as Daily allowance (331) or Kilometre allowance (tax-exempt) (311). The reporting obligation begins when the reimbursement of expenses is entered into the accounts as a private investment. The five-calendar-day deadline for reporting is counted from this moment. The payer reports the date of the accounting entry as the payment date.