Kilometre and per diem allowances

When your main place of work is located in one district but your duties require travelling to another district from time to time, the employer can cover your travel expenses tax-free.  And if you drive your private motor vehicle to get there, the employer can also pay you kilometre allowance tax-free.

Note: the daily commute from home to work and back is no business trip or work trip. In the same way, no trips you take during your free time, or trips connected with your personal affairs, are deemed to be work trips. Your employer cannot pay kilometre allowances for that kind of driving.  

Read our guidance concerning tax deductions based on employees’ expenses for commuting to and from work. 

If you are an employee and your work requires that you change from one work location to another, and no main place work exists, your employer can pay you kilometre allowance to cover your vehicle expenses as you drive to the locations. The employer-paid allowance can reflect the kilometres driven from your home to a work location – and in the case of workers who have a main place of work – the allowance can alternatively reflect the distance from the main workplace to the work location.

If the employer reimburses none of your travel or only pays you partial reimbursements, you can claim tax deductions for the part of the expenses you paid which were left unreimbursed.

For tax-assessment purposes, the type of work described above is often called ‘itinerant’, i.e. involving constant changes of location.
 
Read further guidance concerning travel expenses and the related tax deductions in circumstances where the employer does not cover the expenses.

If you are self-employed person operating under a business name (T:mi), you cannot pay kilometre or per diem allowances to yourself tax-free. However, you have the right to claim deductions due to the expenses; the tax deduction would then be the exact amount of the expenses you paid.

If you drive your privately owned vehicle for purposes related to work, you may be entitled to an additional deduction (lisävähennys) granted to the self-employed. The additional deduction concerns the expenses caused by the work trips your self-employed activity requires. The maximum amount of this deduction equals the maximum per diem that would be paid to an employee earning wages. For more information on per diems, see below.

Read the instructions for completing tax return form no 5. Read the section  Use of a private car for business-related driving of the instructions to see how to make an additional deduction, and Increased living expenses due to temporary business trips to see how to make an additional deduction on the basis of a temporary business trip. These sections discuss the taxpayer’s legal grounds for entitlement to the deduction, and describe how the tax return should be completed.

If you pay travel expenses a few times a year because you visit an apartment that you offer for rent, or because you need to weed out a forest land that you own, you are entitled to claim the actual costs of the trips – typically vehicle expenses or train tickets.  If you drive your own car, the deduction to claim is €0.27 per kilometre in 2024. When you complete your tax return for the year, enter this deduction under the section appropriate to your circumstances.

Examples of the deductibility, to be entered in different sections of the tax return forms:

• If you are an owner of rental property, claim the deduction against your rental income. Read more about the taxation of rental income and related deductions for travel expenses.
• If you are an owner of forest land, claim the deduction on your forestry tax return.  For more information, see “Instructions for the forestry tax return” — Metsätalouden veroilmoituksen täyttöohjeet (under “Expenses, including travel expenses” — Vuosimenot, esim. matkakulut).
• If you are an employee and you have commuting expenses and no public transportation is available for you, claim the deduction when checking your pre-completed tax return under Commuting between home and work.  Read more about how to claim this deduction and about when deductions are granted relating to your private vehicle.

We recommend that you check these sectors’ tax-deduction rules. If all of the following requirements are met, your work is deemed to be performed within a “special” sector:

• You are a wage earner and your job is in construction sector, the excavation sector or in forestry.
• No main place of work is in existence; instead, your work requires you to be present on building sites in the construction sector, or in other locations that change from time to time.
• To travel or to commute to the changing locations is something you do on a daily basis.

If all the above requirements concerning your work activity are met, your daily commute is deemed to be travel within a “special” sector.

This means that your employer has the right to cover the daily expenses tax-free. To cover them does not cause income taxes for you on the condition that the amounts are within the maximum limits laid down by the Tax Administration’s official decision for the year. For more information on the maximum limits, see top of this page.

In addition, if the requirements below are met, your employer not only has the right to cover the travel but also pay you a per diem allowance tax-free:

• You are an employee of a special sector.
• During your work trip, you stayed overnight at an accommodation that you rented or that your employer made the arrangements for.
• You spend nights in the accommodation or in the vicinity for max. 3 years.
• Your permanent residence, i.e. main home, is situated elsewhere.
• The travel time and the distance to the work location fulfil a set of requirements as laid down by the Tax Administration’s official decision.
• Your work assignment is uninterrupted. No tax-free per diem payments by your employer are possible during a vacation, holiday or weekend, etc., when an interruption affects the work assignment.

If your employer does not pay for your trips and accommodation, read the instructions for claiming deductions for travel expenses.

Check the exact requirements, and check how much can be paid to you in tax-free kilometre allowances and per diems:

• Decision of the Tax Administration on tax-exempt allowances for travel expenses 2025
• Decision of the Tax Administration on tax-exempt allowances for travel expenses 2024

It is permissible to receive tax-free expense reimbursements when your work is unpaid volunteer work. However, a number of restrictions apply. You can receive the following amounts tax-free:

• Per diems for no more than 20 days per calendar year
• Coverage of accommodation costs if you provide the payor with documents and receipts
• Coverage of public transport fares if you provide the payor with the tickets – no maximum limit concerns these amounts paid to you
• Kilometre allowance for no more than €3,000 per calendar year.

You can make an agreement with the payor that no fees or wages in cash will be paid to you. This way, you can agree that the payor will only cover your travel expenses, for example.

In the same way, if you are a shareholder-entrepreneur, you can make an arrangement with your company (limited company, limited partnership, general partnership) that no wages will be paid to you although you work for the company. The company can still pay you travel expense allowances tax-free, if you travel in business for the benefit of the company. The allowance will cause no income taxes for the recipient only if the conditions of the decision of the Tax Administration on tax-exempt allowances for travel expenses are fulfilled, and you draw up an expense report for the records of the company’s bookkeeping system.