Reporting data to the Incomes Register: monetary wages and items deducted from wages

This instruction describes

• the wage concept
• two methods of reporting monetary wages to the Incomes Register
• separation of wages and earnings from work in the Incomes Register
• deadlines for reporting monetary wages
• reporting items deductible from wages.

This detailed guidance replaces the earlier guidance that was entitled Reporting data to the Incomes Register: monetary wages and items deducted from wages.

The following additions and changes have been made to the instructions:

• Added two income types in which the grounds for social insurance contributions can vary to the list in Section 1.3. Clarified the guidance of the use of the ‘Other compensation’ (216) income type and the guidance of how to report compensation paid for additional days off supplementing the annual holiday in Section 1.3. Supplemented the guidance of reporting JuEL earnings from work in the same situation.
• Transferred the previous section on deadlines for reporting data to new instructions Wages: reporting data to the Incomes Register.
• Added new income type ‘Reimbursement collected for bicycle benefit’ (420) introduced at the beginning of 2021 to Section 2.

Otherwise the detailed guidance is similar in outline to the earlier guidance.

The employer’s and employee’s social insurance contributions mentioned in the examples have been calculated using the rates for 2021.

1 Reporting monetary wages

1.1 Wage concept

Wages are remuneration paid or agreed to be paid for work in an employment relationship (contractual or public-sector employment), or under a director’s agreement. Under the public sector pensions act (julkisten alojen eläkelaki 81/2016), assignments, positions of trust and the tasks of carers and family carers are regarded as employment relationships subject to specified conditions. Accident and occupational disease insurance legislation also includes insurance provisions for accidents and occupational diseases concerning certain groups, according to which the groups in question may be insured in the same way as employees, but this does not make individuals belonging to these groups employees.

Because concepts of income often differ in the legislation applied by the Incomes Register data users, the concept of 'wages' is not identical for all data users. Some data users use the term ‘earnings from work’ for wages. The concept of income is broader for some data users than for others.

From the perspective of tax legislation, wage is a broader concept than, for example, earnings from work, which forms the basis of earnings-related pension or unemployment insurance. In taxation, remuneration paid for work other than that performed in an employment relationship can be regarded as wages. Differences may also arise due to some data users assessing income based on the payment date, and some based on the earnings date.

For the above-mentioned reasons, the terms ‘wages’ and ‘earnings from work’ cannot serve as synonyms in all contexts. More detailed guidance on the interpretation of the wage concept is available on the websites of the Tax Administration, insurance companies and the Employment Fund, or by contacting the bodies in question directly.

1.2 Two methods of reporting monetary wages

The earnings payment report submitted to the Incomes Register replaces the various reports previously submitted to the data users. Because data users have differing concepts of income, it is recommended that the payer reports wages in an itemised breakdown (reporting method 2). Wages must, however, be reported at least as a total amount (reporting method 1).

Itemised reporting of monetary wages (reporting method 2)

• The payer uses specific, complementary income types. With this reporting method, the wage is generated from the reported earnings, and the payer does not have to calculate the wage by adding up earnings.
• When the data is reported with the complementary income types (38), all parties using the data stored in the Incomes Register can use it in their operations.
• Reporting the data by means of reporting method 2 is subject to the same deadlines as mandatory data.

Reporting of monetary wages as a total amount (reporting method 1)

• The payer reports the monetary wages as a total amount.
• If the wages are reported as a total amount, some data users may have to request more detailed information, since a lower level of detail is not sufficient for all users. For example, Kela needs more detailed information on monetary wages when granting sickness allowances or parental allowances.

Reporting method 1 and reporting method 2 cannot be used simultaneously in the same report. However, you are free to change reporting methods between reports.

See below for examples of reporting data. The examples do not present all mandatory data, only the data necessary for processing the matter.

When reporting method 2 is used, the income earner’s wages comprise the total amount of the reported income types. The payer does not need to give the total amount of the reported income types.

1.3 Separating earnings from work and wages in a report

The above describes how the concept of income is wider for some data users than for others. The terms used for income also differ: some use ‘earnings from work’ and others ‘wages’. With the Income Register’s earnings payment report, payers can use a single report to notify various social insurers of the income on which contributions are based, even if the income amounts differ.

The reporting method 1 for monetary wages (income type Total wages (101)) includes the total of wages and earnings from work subject to the various social insurance contributions of employers and employees (earnings-related pension, health, unemployment and accident and occupational disease insurance contributions).

• If some part of the payment made is not remuneration paid for work and thus not the grounds for one of the above-mentioned social insurance contributions, notification that the income is not subject to the insurance contribution in question is added to the Total wages income type, using the Insurance information type data group.
• In addition, the payer must separately report the part of the income that constitutes the grounds for the social insurance contribution in question with the separate income subtypes related to reporting method 1:
  • Total wages subject to social insurance contributions (103)
  • Total wages subject to earnings-related pension insurance contribution (102)
  • Total wages subject to health insurance contribution (104)
  • Total wages subject to unemployment insurance contribution (105)
  • Total wages subject to accident and occupational disease insurance contribution (106)

If none of the reported income is subject to social insurance contributions, the payer uses the Insurance information type data to report that the amount is not subject to social insurance contributions. In such a case, the payer does not need to confirm data, using income subtypes, from all of the social insurance contributions.

If the payment made is partially the inverse of the default value, separate data on the income type must be submitted for payments that have and those that do not have the default value.

It should also be noted, for example, that the public sector pensions act (julkisten alojen eläkelaki 81/2016) differs, in terms of earnings-related pension insurance, from the private sector’s employees pensions act in relation to matters such as meeting fees, lecture fees and compensation for acting in positions of trust.

By default, the complementary income types in reporting method 2 for wages contain data on whether or not the income type is subject to social insurance contributions. The default value for some income types can be changed, if necessary. Information on income types and their default values is available on the page Wage income types.

Depending on the situation, the grounds for social insurance contributions may differ for the same payer in regard of the following income types:

• initiative fee (202)
• compensation for membership of a governing body (308)
• monetary gift for employees (310)
• kilometre allowance (taxable) (209)
• meeting fee (210)
• lecture fee (214)
• compensation for acting in a position of trust (215)
• other taxable benefit for employees (315)
• other fringe benefit (317)
• other compensation (216)
• reimbursement collected for other fringe benefits (407)
• total wages (101)
• compensation for employee invention (326)
• stock options and grants (320)
• partial pay during sick leave (219)
• non-wage compensation for work (336)
• share issue for employees (226)
• wages for insurance purposes (352)
• profit-sharing bonus (233) and
• deduction before withholding (419).

The ‘Type of insurance information’ data of the Other compensation (216) income type is used, for example, when the employer pays a daily allowance to an employee on grounds more lenient than those subject to the decision of the Tax Administration. This is reported by attaching the correct ‘Type of insurance information’ data to the income type. In this case, the income is not subject to earnings-related pension, unemployment or accident and occupational disease insurance contributions, but it is subject to a health insurance contribution.

Due to the amendment to the Annual Holidays Act that came into force on 1 April 2019, an employee is also entitled to compensation for additional days off supplementing the annual holiday that corresponds to their regular or average wages, if the duration of the annual holiday they have earned is less than 24 days, due to long-term illness or medical rehabilitation (Annual Holidays Act, section 7 a). Compensation for additional days off supplementing the annual holiday is reported using the Other compensation (216) income type. The compensation is subject to the health insurance contribution, but not to other social insurance contributions. Because the default of the ‘Other compensation’ (216) income type is that income is subject to social insurance contributions, ‘Subject to earnings-related pension, unemployment, and accident insurance and occupational disease insurance contribution: No’ is entered in the ‘Type of insurance information’ data. The compensation for additional days off supplementing an annual holiday cannot be reported using income type ‘Annual holiday compensation’ (234), because the income type in question is subject to social insurance contributions, and the insurance information cannot be changed for this income type.

The report for the compensation paid for additional days off supplementing the annual holiday is submitted when the compensation is paid. The compensation is always reported in the same way regardless of whether the compensation is paid for additional days taken off during employment or whether the compensation is paid for additional days off upon the termination of the employment. If wages are also paid in addition to the compensation, they comprise normal earnings from work subject to social insurance contributions. Therefore, it must be possible to separate the compensation paid for additional days off from the wages. While the person is on holiday, the wages paid to the person are reported to the Incomes Register in the normal manner. ‘Annual leave’ is reported as the reason code for the absence.

A collecting agreement, in which additional days off supplementing the annual holiday can have been agreed as days of annual leave, applies to some income earners insured under JuEL. In this case, regulations on annual leave apply to these income earners as such. Additional days off are reported similarly to normal annual leave, such as using the ‘Time-rate pay’ (201) income type, and compensation for additional days off is subject to an earnings-related pension insurance contribution.

The Insurance information type data related to the above-mentioned income types is also described in the instructions Reporting data to the Incomes Register: insurance-related data.

2 Reporting items deductible from wages

Several income types can be reported for one income earner on the same report. Even if several income types are reported, items deducted from wages can be reported as a total sum for all income types.

In addition to monetary wages, certain payments must be reported separately, under their own income types, if the payments in question are made. Income types to be reported separately include fringe benefits and tax-free reimbursements of expenses. The total amount of the payment made to the income earner consists of wages based on reporting method 1 or reporting method 2, AND separately reported income items AND items deducted from the income.

The reporting of income types to be separately reported, such as fringe benefits and reimbursements of expenses, is described in more detail in the instructions Reporting data to the Incomes Register: fringe benefits and reimbursements of expenses and Reporting data to the Incomes Register: rewarding employees, payments made to an entrepreneur and other special circumstances.

The data on items deductible from wages must be submitted in connection with reporting method 1 (total wages) and reporting method 2 (complementary income types), and in connection with separately reported income types (1 and 2) in the same report. The data for a single payment transaction must be reported to the Incomes Register as a whole. In addition to the income paid, the items deducted from the income and the necessary income earner and payer details are reported at the same time. The payment, deducted items and additional income earner and payer details cannot be divided into different reports. When all data related to a payment is reported as a whole, the data users are able to correctly get the data they require and no further information needs to be requested from the payer. In certain exceptional situations, the Incomes Register directs the user to use two separate reports so that the data users can correctly get the data they require in these situations as well. All data related to the payment transaction, such as the additional income earner and payer details, must then be submitted on both reports.

Items deductible from wages consist of

• compensation collected for car benefit (401)
• withholding tax (402)
• elected official fee (403)
• tax at source (404)
• tax at source deduction (405)
• reimbursement collected for other fringe benefits (407)
• other item deductible from net wage or salary (408)
• employer-paid premium for collective additional pension insurance, employee’s contribution (411)
• employee’s health insurance contribution (412)
• employee’s pension insurance contribution (413)
• employee’s unemployment insurance contribution (414)
• reimbursement for employer-subsidised commuter ticket (415)
• tax paid abroad (416)
• distraint (417)
• voluntary individual pension insurance premium (418)
• deduction before withholding (419)
• reimbursement collected for bicycle benefit (420).

If the income earner is insured under the public sector pensions act (julkisten alojen eläkelaki 81/2016), only income types reported on the basis of the same registration can be reported on one earnings payment report. Further information on employment relationship registration is available in the instructions Reporting data to the Incomes Register: employment relationship data.