Travel expenses – if you are a student, unemployed or on parental leave
If you are unemployed for part of the year, the credit threshold for travel expenses is reduced. The threshold is adjusted based on the number of unemployment months. Starting tax year 2023, the threshold is also reduced if you are on parental leave for part of the year.
Students cannot claim a deduction for their travel expenses between home and the place of study on their tax returns.
The unemployment months reduce the credit threshold for travel expenses
If you are unemployed for part of the year, you can deduct your travel expenses between home and the place of work for the period when you work.
Travel/commuting does not result in a tax deduction unless the expense is higher than your annual threshold amount i.e. the "threshold of your own liability". However, you must report the entire expenses: you must include the amount treated as your own liability in the amount you claim. The Tax Administration takes the threshold into consideration when assessing your taxes.
Months of unemployment will lower the threshold and give you a higher deduction. The normal own-liability threshold (€750) is reduced by 70 euros for each full month of unemployment. For purposes of this tax rule, 21.5 days of unemployment make up a full month. However, the lowest possible threshold is €140.
The payors of unemployment allowance give the Tax Administration details on the length of people's unemployment. We make use of this information when we assess your taxes and deductions. The number of days when unemployment allowance has been paid to you is printed on the Specification section of your Pre-Completed Tax Return.
Example: Antti was out of work from January 1 – March 31. However, he got a job April 1 that continued up to September 30. After this he was again unemployed October 1 to December 31. His commuting cost was €80 per month — this is the price of an unlimited-ride bus pass. As a result, for six months of work, Antti can claim 6 × €80.00 = €480.00
An official notice arrives to the Tax Administration from the organization that pays Antti unemployment relief: the period when he was unemployed and received relief was 132 days. Consequently, when we assess Antti's taxes and deductions for the year, we will reduce his own liability for commuting expenses (132 days / 21.5 days = 6.14 months).
This way, the threshold goes down by €420 ( = 6 months × €70 ), and the adjusted amount is €330 ( = €750 - €420 ). Antti's deduction is €150 ( €480 - €330 ).
Note: No deductions are given for travel/commuting expenses that you pay when you deal with your unemployment payments, and when you look for a new job. Deductions are only given for going to a place of work.
Parental leave also reduces the credit threshold for travel expenses
If you are on parental leave for part of the year, you can deduct your travel expenses for the period when you work.
The general credit threshold for travel expenses (€750) is reduced if you receive a maternity allowance, special maternity allowance, paternity allowance, pregnancy allowance, special pregnancy allowance, parental allowance or partial parental allowance during the tax year.
The credit threshold is reduced by €70 for each full month of parental allowance. A full month here means 21.5 days of parental allowance. The parental allowance days for the entire year are added together and the credit threshold is reduced by €70 for each full set of 21.5 days qualifying for the allowance.
The Tax Administration receives the number of the parental allowance days directly from Kela, and reduces the credit threshold for the travel expenses automatically. You can see the number of the parental allowance days in the specification section of your pre-completed tax return.
The credit threshold changed at the beginning of 2023, so it is not yet applicable to the tax returns for 2022.
Example. Elsa’s baby is due on 21 May 2023. She works full-time at the beginning of the year and takes pregnancy leave starting 14 April, i.e. 30 weekdays before the due date. Elsa receives a pregnancy allowance between 14 April and 1 June. She is on parental leave for the rest of the year.
In 2023, Elsa has full parental allowance months from May to December, i.e. 8 months in all. The credit threshold for travel expenses is reduced by €560 (8 months x €70/month). Elsa is entitled to a deduction for travel expenses between home and the place of work during the first part of the year if the expenses exceed the €190 credit threshold (€750 - €560).
If you receive a partial parental allowance
You can receive a partial parental allowance if you work for no more than 5 hours a day. The partial parental allowance is half of the full parental allowance. One day of partial parental leave corresponds to a half day of parental allowance in the calculation of the credit threshold for travel expenses.
Example: Venla and her spouse Sami have a baby, and they take turns taking care of the baby. After the pregnancy leave, Venla takes full days of parental leave on Mondays. She works no more than 5 hours before noon from Tuesday to Thursday, taking care of the baby in the afternoons when she is on partial parental leave. On Fridays, Venla works all day.
Venla's parental allowance days per week = 2.5 (1 full day + 3 half-days). The parental allowance days for the entire year are added together and the credit threshold is reduced by €70 for each full set of 21.5 days qualifying for the allowance.
Commuting expenses for labour market training
If you have been ordered by a TE office to participate in labour market training, you are paid a special allowance for it. You can deduct commuting expenses from your allowance. Expenses for travel between your home and the place where the training is held are deductible as commuting expenses.
You may receive an expense allowance during your training. This allowance is intended to pay for your travel and meal costs as well as your accommodation, if the training takes place outside your home municipality. Half of the expense allowance is considered to cover commuting expenses. If you receive this expense allowance, deduct half of the allowance from your travel expenses for the year before you enter them in your tax return.
Example: Antti signed up for a labour market training programme. Commuting to the required classes has cost him €1,000. He received €450 as expense allowance. He reports €775 as travel expenses either in MyTax or on Form 1A (€1,000 – €450/2).
Antti is unemployed, which means that his credit threshold for travel expenses is €400 instead of the usual €750. Therefore, he gets a travel expense deduction of €775 – €400 = €375.
You cannot deduct expenses for commuting to training or classes that you have taken voluntarily if you also receive unemployment benefit.
No deductions for commuting to educational institutions
If you are a student, you are not allowed deductions for your trips between your home and the location of the institution where you are a student. You may claim expenses only if they have to do with work.
You become eligible for claiming commuting expenses if you have a summertime job or a 'student job' where you work in addition to pursuing your studies. If your studies require that you work as a trainee, the commuting expenses are deductible on the condition that you are getting paid for your traineeship. If you work as a trainee but don't get paid, you cannot get a deduction.
Your own liability is 750 euros. You should only claim the expenses if they go over the threshold of the taxpayer's own liability. However, when claiming expenses, report them in full; do not subtract the threshold yourself, because the Tax Administration takes it into consideration automatically when assessing your taxes and deductions.