What kind of tax card is suited for “light” entrepreneurship?

You need a tax card that your service company can use when paying you wages or trade income. They must withhold tax on the money paid to you.  

  • If your invoicing service pays you wages, you need the card designed for wage income.
  • If the money you receive from the invoicing service is trade income instead, you need thecard designed for trade income.
  • If you are on the Tax Administration’s prepayment register (for example, if you work as a self-employed individual), no tax card is necessary for the trade income received from the service. In this case, you must make regular prepayments to the Tax Administration yourself.

Do you carry pension insurance for the self-employed (often called YEL insurance)?

When you ask the Tax Administration to prepare a new tax card for you, you must fill in specific fields on the application form. The fields vary, depending on whether you have a YEL insurance contract or not. 

Invoicing services rarely collect any pension contributions when they pay out wages and trade income to you. Accordingly, if no pension is withheld, you are responsible for your pension yourself. This also requires that the other conditions for the insurance are fulfilled.

For example, you must have pension insurance for the self-employed (YEL) if you receive at least EUR 9 010.28 from the invoicing service during the year (in 2024) and you work longer than for 4 consecutive months. 

More detailed instructions are available on the Työeläke.fi website. 

Contact your insurance company or the Finnish Centre for Pensions to learn more.

After you have paid the YEL contributions, they are considered tax-deductible expenses: for this reason, it is a good idea to indicate an approximate contribution amount on the application form for your tax card. 

How to complete an application form for the tax card

Estimate the total income you will receive during the year. Also estimate how much you can probably deduct from your income in taxation. After that, you can ask for a new tax card if necessary. Give your card to the invoicing service company. The company will use the percentage rate on it to withhold tax from your wages and trade income. 

Request a tax card in MyTax

See the instructions below. The guidance is different depending on whether you receive wages or trade income and depending on whether or not you carry the YEL pension insurance.

Complete the application like this:

  1. The wages you receive from the invoicing service must be reported under Pay and fringe benefits. If you also receive pay from other sources, add up all the wages.
  2. After that, you must report the wages from your invoicing service again in the Business income and entrepreneur’s work income section, under Pay to be replaced with work income (entrepreneur’s pay)). The above must be done in order to make sure that you do not need to pay earnings-related pension, unemployment insurance, and daily allowance contributions based on your wage income from the invoicing service.
  3. Now you can proceed to related tax-deductions under "Expenses for the production of income” in the “Expenses for the production of wage income” section. The expenses in this category include expenses for tools, for example. Please note that you can no longer deduct the invoicing service company’s fees and the employer's health insurance contributions. Read more: The Supreme Administrative Court’s decision changes the tax treatment of light entrepreneurs
  4. Do not forget to claim deductions for your commuting and travel expenses as appropriate.

Read more about tax-deductible expenses

Complete the application like this:

  1. The wages you receive from the invoicing service must be reported under Pay and fringe benefits. If you also receive pay from other sources, add up all the wages.
  2. After that, you must report the wages from your invoicing service again in the Business income and entrepreneur’s work income section, under Pay to be replaced with work income (entrepreneur’s pay)). The above must be done in order to make sure that you do not need to pay earnings-related pension and unemployment insurance contributions based on your wage income from the invoicing service.
  3. In addition, indicate the amount of your YEL work income. Fill in the “Work income under YEL or MYEL” line of the “Business income and entrepreneur’s work income” section. This means the amount that you and the insurance company have agreed to be the basis for the insurance contribution.
  4. Fill in the contributions you paid to the insurance company under “Other deductions” in the YEL or MYEL contributions or other mandatory pension insurance contributions section. 
  5. Now you can proceed to related tax-deductions under "Expenses for the production of income” in the “Expenses for the production of wage income” section. The expenses in this category include expenses for tools, for example. Please note that you can no longer deduct the invoicing service company’s fees and the employer's health insurance contributions. Read more: The Supreme Administrative Court’s decision changes the tax treatment of light entrepreneurs.
  6. Do not forget to claim deductions for your commuting and travel expenses as appropriate.

Read more about tax-deductible expenses

Trade income and the deductible expenses that support the income must be entered in different lines depending on whether or not you are liable to VAT. Further information on value added taxes

Complete the application like this: 

  1. Enter the amount of trade income for the entire year under one of these 2 alternative fields, depending on whether you have a VAT registration or not:
    • Trade income when you are not on the prepayment register or liable to pay VAT
    • Trade income when you are not on the prepayment register – but you are liable to pay VAT
  2. Also fill in the expenses that support your trade income, such as expenses for tools. Please note that you can no longer deduct the fees you have paid to an invoicing service company. Read more: The Supreme Administrative Court’s decision changes the tax treatment of light entrepreneurs.
    Report the expenses relating to trade income as follows:

    • If you have no VAT registration, enter your expenses in “Expenses for the production of other work income”, which is under “Expenses for the production of income other than wages and salary” in the “Expenses for the production of other work income” section.

    • If you are VAT-registered, enter them under "Expenses relating to trade income per year” when you enter the amount of your trade income.

  3. Do not forget to claim deductions for your commuting and travel expenses as appropriate. 

Read more about tax-deductible expenses

Trade income and the deductible expenses that support the income must be entered in different lines depending on whether or not you are liable to VAT. Further information on value added taxes

Complete the application like this:

  1. Enter the amount of trade income you receive from your invoicing service in either one of these 2 alternative fields, depending on whether you have a VAT registration or not:
    • Trade income when you are not on the prepayment register or liable to pay VAT
    • Trade income when you are not on the prepayment register – but you are liable to pay VAT
  2. In addition, indicate the amount of your YEL work income. Fill in the “Work income under YEL or MYEL” line of the “Business income and entrepreneur’s work income” section. This means the amount that you and the insurance company have agreed to be the basis for the insurance contribution. 
  3. Fill in the contributions you paid to the insurance company under “Other deductions” in the YEL or MYEL contributions or other mandatory pension insurance contributions section.
  4. Also fill in the expenses that support your trade income, such as expenses for tools. Please note that you can no longer deduct the fees you have paid to an invoicing service company. Read more: The Supreme Administrative Court’s decision changes the tax treatment of light entrepreneurs
    Report the expenses relating to trade income as follows:
    • If you have no VAT registration, enter your expenses in “Expenses for the production of other work income”, which is under “Expenses for the production of income other than wages and salary” in the “Expenses for the production of other work income” section.
    • If you are VAT-registered, enter them under "Expenses relating to trade income per year” when you enter the amount of your trade income.
  5. Do not forget to claim deductions for your commuting and travel expenses as appropriate. 

Read more about tax-deductible expenses

Are you on the prepayment register?

If you are on the Tax Administration’s prepayment register, any party that pays you trade income can pay it to you without having to withhold money from it. Instead, you take care of making tax prepayments by yourself. There is no need for a tax card. Prepayments are income tax that is paid in advance. You are not required to have a prepayment registration, but it is often better for business to have it. 

Read more about the prepayment register.

If you are on the prepayment register, you can ask for a calculation of prepayments in MyTax. You need an estimate of your income for the entire year, and you need an estimate of the expenses that give you the right to deductions. You receive the decision on prepayments via MyTax. The prepayment decision will contain the information you need to make the payments, i.e. the amounts and due dates of the instalments.

Read more about prepayments

During the year, please keep an eye on how your estimate matches your actual income. If you receive more income than you estimated and your prepayment amount is therefore too small, request an increase to your prepayment. Otherwise you may have to pay back taxes. If it looks like you are paying too much, you can ask for a reduced prepayment.

Page last updated 1/23/2024