Travel expenses and other deductions — light entrepreneurship

If you are a self-employed person and you have a contract with an invoicing service company, there are tax-deductible expenses that you may have paid because of your work. These expenses include travel, tools, and other costs that have a direct connection to your work.

Do you receive wages — or do you receive trade income? The deductions are different for these two income types.

Please find out first what the type of income is:

• Is the invoicing service company paying you wages?
• Is the invoicing service company paying you trade income?

If you receive both wages and trade income during the year, the tax reporting is different for these 2 categories. To get the deductions, you must enter the travel and other expenses into different sections of the tax forms. See instructions below.

Please note that because of your wage income, an automatic deduction of €750 is given you. This is the standard deduction for work-related expenses. Accordingly, you should only inform the Tax Administration of travel, commuting, and other expenses for the production of wage income when your expenses have been more than €750 during the year.

Recipients of trade income do not have the €750 threshold. So, you have to report your travel expenses that support your trade income even if the sum stays below €750.

Keep a driver’s logbook and write your expenses down

If your work involves driving your car, motorcycle, moped or other vehicle, keep a logbook. The logbook can be a useful if you need to prove how many kilometres per year you needed for your work. The remainder of the kilometres are non-deductible private kilometres.

Your tax-deductions can only consist of costs for the production of income – for example, the annual travel expense caused by trips to visit customers.

Write the amounts down, keep records and save the receipts for all work-related other costs, too. Telephone costs are a typical example. However, do not enclose receipts or similar paper slips with your income tax return. Instead, keep them in storage. The Tax Administration will ask you to show the receipts if needed.

How to claim the deductions for travel expenses on your tax card or tax return 

Food couriers – see illustrated instructions for travel cost and tax deductions (pdf)

How to claim other deductions on your tax return

You can deduct still other work-related expenses in your taxation as expenses for the production of income. The expenses in this category include:

• the part of your telephone costs directly connected to your work
• expenses for tools, if any.

Please note that you can no longer deduct the fees you have paid to an invoicing service company, nor the employer's health insurance contribution charged from you by the invoicing service company. Read more: The Supreme Administrative Court’s decision changes the tax treatment of light entrepreneurs

Have you paid YEL pension contributions?

You can also deduct the YEL contributions – pension insurance for the self-employed – if you have paid them during the year.

If you have no Business ID (Y-tunnus) i.e. no registration of your self-employment as an entrepreneur’s operation, claim the YEL deductions as follows:

• Log in to MyTax, and go to Other deductions – YEL or MYEL contributions or other mandatory pension insurance contributions.
• Complete Form 50A — Earned income and deductions on paper.

For more information about the pension insurance contract for the self-employed, visit the website of the Finnish Centre for Pensions.

You can enter data for upcoming tax deductions when you ask for a tax card

Already at the stage when you submit an application for a tax card for wages or trade income, you can inform the Tax Administration of various deductible expenses.

Please note that only the expenses for the production of wage income appear on your pre-completed tax return automatically. You will receive the pre-completed tax return after the calendar year has ended, in springtime. For this reason, it is important to check that the tax deductions on the pre-completed tax return are correct. Make sure that no deductible expenses are missing.

Because only the expenses related to wage income appear automatically, you must report the expenses for the production of your trade income again when you receive the pre-completed tax return.

Read more about tax cards issued to the self-employed involved in “light” entrepreneurship

Example 1. René is doing food courier work. He drives his own motor vehicle to deliver orders to the customers’ homes. The invoicing service firm pays him. René has a contract with the invoicing service. The invoicing service pays him wages. René has not received any tax-exempt reimbursement for his travel expenses.

René incurs travel expenses. In addition, the invoicing service company charges a fee for their services and collects the employer's health insurance contribution from him.

He has the right to tax-deductions for his direct expenses related to the food courier work. He has a logbook where he enters the deliveries and the kilometres. The logbook shows his tax-deductible kilometres per year.

In 2023, the total kilometres of food courier work amounted to 4,000, so the amount of euros to deduct is: 4,000km × €0.30 = €1,200. Because the above goes over the threshold of €750 (the automatic amount of deduction due to work-related costs, granted to everyone), René has the right to claim a higher deduction that covers the actual expenses for the production of his income.

He can enter the data to his tax return as follows: the above travel expense of €1,200 goes under Travel and commuting expenses — Other than commute – Temporary business trips and travel in special sectors.

René cannot deduct the fees he has paid to the invoicing service company nor the employer's health insurance contribution on his tax return, if the invoicing service company has deducted the fee and the employer's health insurance contribution from Rene's wages.

Example 2. In 2023  Anna’s invoicing service paid her wages and €0.46 per kilometre as reimbursement subject to tax. However, when completing her tax return and claiming travel expenses related to production of income, she can only claim €0.30 per kilometre.