Correcting data in the Incomes Register

These instructions are intended for payers who are correcting earnings payment data they have reported to the Incomes Register. The instructions describe

• how to correct an earnings payment report and an employer's separate report in the Incomes Register;
• how to report overpayment and other unjust enrichment; and
• how to report a recovered payment.

The instructions include examples of correcting information in various cases. The examples do not include all mandatory data that must be entered in the report, but only information that is essential to making corrections. The page Correcting earnings payment data describes the most common situations involving corrections with the help of examples and infographics.

These instructions replace the previous Correcting data in the Incomes Register instructions. We have made the following additions and clarifications to the instructions:

• Added an example to Section2.1.2 regarding correcting a partial pay during sick leave.
• Clarified the reporting instructions in Section2.3.1, Correcting tax withheld when the amount was too high, and added an example to the section.
• Supplemented the instructions in Section4.2 regarding the adjustment of the payer’s self-assessed taxes in net recovery situations.
• Added Section4.10 and examples of the recovery of fringe benefits.
• Added Section6.4 on the impacts of report cancellations on the payment of self-assessed taxes.
• Added Section8 at the end of the instructions. The section contains a description of the key rules regarding the procedure for correcting data, as well as examples of the reporting of overpayment using different methods (net recovery, gross recovery and offsetting from wages).
• The amounts of employee contributions used in the examples have been updated to the 2021 level. Some minor technical corrections and additions have also been made to the instructions.

Otherwise these instructions are similar in outline to the earlier instructions.

1 Correcting data in the Incomes register

1.1 How to correct data?

The payer is responsible for the accuracy and correction of any data it has submitted to the Incomes Register. If incorrect data in the Incomes Register is based on the payer's report, the payer is obliged to correct the incorrect data it has reported. If an income earner notices incorrect information concerning him or her in an earnings payment report in the Incomes Register, the income earner must make a correction request to the appropriate payer.

Data in the Incomes Register is, as a rule, corrected using the replacement method. This means that the original report is amended so that all of the report data is resubmitted, including the data that was correct in the original report, in addition to new and changed data. The replacement report is made for the same payment date as the original.

A record submitted by a payer can include earnings payment reports for several income earners. A report refers to data on one payment transaction paid to a single income earner. One record may contain both erroneous and correct reports. The entire record does not need to be resubmitted; it is enough for the payer to correct the erroneous reports.

The data reported to the Incomes Register can be maintained and corrected as long as it is retained in the Incomes Register. Data is stored in the Incomes Register system for 10 years from the beginning of the year following the year in which the data was registered. As a rule, this equals the time employers are obligated to retain their payroll and other accounting data. Reporting to the Incomes Register does not replace the employer's storage obligation regarding its accounting data or other materials. It should be noted, however, that some data users may be entitled to obtain data from the Incomes Register for a period of less than ten years, for example due to appeal deadlines or time periods taken into consideration in the granting of benefits.

The payer can also cancel, or delete, a report or a record containing several reports it has previously submitted. In certain cases, the payer must correct the information by cancelling the previous report and then resubmitting the report with the correct information. The cancellation of information is described in Section 5. Section 6 describes cases where a replacement report cannot be used, requiring the previous information to be cancelled first.

Payments made on 1January 2019 and later, and any corrections to be made to such data, are reported to the Incomes Register (see Section1.7, ‘How to correct data submitted prior to 2019?’).

The correcting of benefits payment data is discussed in more detail in the ‘Benefits: Reporting data to the Incomes Register’ instructions.

1.2 When must a correction be made?

The payer must correct any erroneous reports it has submitted without undue delay. This means that erroneous reports must be corrected as soon as the error is noticed. Postponing the correction to the next payroll run, for example, is not allowed. The deadlines for reporting data to the Incomes Register do not apply to correcting data. All payers, from households to those submitting their reports on paper, must correct any incorrect information without undue delay. Without undue delay means that the data must be corrected as soon as can be reasonably expected from the data submitter's perspective.

An unjust enrichment must be reported without undue delay and no later than within one month of becoming aware of the unjust enrichment. Unjust enrichment means a mistakenly paid payment or benefit to which the income earner is not entitled. An unjust enrichment occurs when, for example, a payment is made on incorrect grounds, to the wrong person, or in an incorrect amount. If the next payroll run is done within one month of the detection of the unjust enrichment, the payer can submit information on the unjust enrichment during this payroll run.

Information on amounts paid back must be reported no later than on the fifth calendar day after the day of becoming aware of the payment of the recovered amount, its payer, and the unjust enrichment to which the payment is connected. The five-day time limit begins from when the received payment has been connected in the ledger and the payroll to the income collected from the income earner.

If information submitted for the payment month is not corrected until after the eighth day of the month following the payment month, a penalty may result in certain situations. The determination of penalty fees is described in more detail in the instructions Reporting income data: penalty fees.

1.3 What data must be corrected?

All errors in the report data must be corrected. This applies both to income data and other mandatory data (section 6 of the act on the incomes information system (laki tulotietojärjestelmästä 53/2018)), mandatory identifying and contact information (section 8) and complementary additional data (section 7) stored in the Incomes Register. Thus, for example, absence data and employment data submitted as complementary additional data must be corrected if they contain errors.

With respect to correcting a report, it does not matter, for example, whether wages paid have been reported using the Incomes Register's reporting method 1 or reporting method 2.

1.4 How is a correction allocated to the correct report?

An income earner may have several valid earnings payment reports from the same payer with the same pay period and payment date. If the payer selects 'New report' as the action type, the report will not replace a previously submitted report, even if the pay period and payment data were the same. When you wish to correct a previously submitted report, select 'Replacement report' as the action type. Correction of data uses report references that allow the correction or cancellation to be allocated to the correct report.

1.4.1 Incomes Register's report reference

When submitting a new report, the payer always receives a report reference generated by the Incomes Register, which can be used to allocate a later correction to the correct report. If the new report is submitted via the technical interface or the upload service, the Incomes Register will return the report reference to the payer in the processing feedback. If, however, the new report is submitted via the online form of the e-service, the Incomes Register will add a report reference to the report.

1.4.2 Payer's report reference

If the payer is unable or unwilling to use the report reference generated by the Incomes Register, a payer's report reference can be used in the correction process. The payer can generate this reference, which must be unique for each report. Numbers and letters, for example, can be used when generating a reference. The characters allowed in a reference are described in Section 1.2, Character set, of the document 'Data delivery - Schemas - Earnings payment report'. The length of a reference is described in Section 2.12, Service data. The payer's payroll system can generate the reference automatically or, depending on the system implementation, the payroll system can ask the user to enter a reference manually.

The payer must generate a payer's report reference when using the technical interface or the upload service, and a new report is being submitted to the Incomes Register for the first time. If a new report is submitted using the e-service online form or on a paper form, and the payer does not submit a payer's report reference, the Incomes Register will generate the required reference for the submitted report. If, exceptionally, the information has been submitted to the Incomes Register on a paper form, the report reference will be sent to the payer in a letter.

1.4.3 Report version number

The Incomes Register assigns version number 1 to a new earnings payment report, while the version number assigned to a replacement report is one higher than the version number of the report that was replaced. If the data is submitted via the technical interface or the upload service, the Incomes Register will return the version number to the submitter in the processing feedback. The payer cannot assign a version number to the first, so-called 'new report'.

Using the version number when correcting data is not mandatory, but it is recommended. Submit the version number to which you wish to allocate the correction on the replacement report. This will ensure that the corrections or cancellation are performed for the correct report. If a version number is not used, the Incomes Register will always perform the action on the latest version of the report. When a version number is used for allocating a replacement, you can ensure that any changes made in another process are not inadvertently overwritten.

1.5 Will the reporting method or channel affect corrections?

The payer chooses whether to report the wages paid as a total amount (the lower level of detail for reporting monetary wages, or the so-called reporting method 1) or by using the complementary income types (the greater level of detail for reporting monetary wages, or the so-called reporting method 2). Monetary wages must be reported using at least reporting method 1. The reporting is described in more detail in the instructions Reporting data to the Incomes Register: monetary wages and items deducted from wages.

With respect to correcting data, it does not matter which reporting method was used. Neither does it matter whether complementary additional data has been submitted. Incorrect information must always be corrected. The examples in these instructions will discuss the correction of data submitted using both reporting methods.

The reporting channel does not affect the correcting of a report, either. Reports submitted via the technical interface, for example, can be corrected using the e-service online form, or reports uploaded as a file can be corrected via the technical interface.

1.6 What reports does the Incomes Register's correction procedure apply to?

The instructions apply to the correction of information on earnings payment reports and employer’s separate reports. Most of the examples in these instructions concern the correction of an earnings payment report. Correcting an employer’s separate report is discussed separately in Section7. The correcting of benefits payment reports is discussed in more detail in the ‘Benefits: Reporting data to the Incomes Register’ instructions.

If the income data on an earnings payment report changes in such a manner that the amount of the employer’s health insurance contribution also changes, the payer must also correct the submitted employer’s separate report on which the total amount of health insurance contribution is reported.

1.7 How to correct data submitted prior to 2019?

Payments made on 1 January 2019 and later are reported to the Incomes Register, and any corrections to be made to these incomes. Reports submitted in 2019 and later are corrected according to these instructions. If payments made prior to 2019 are corrected in 2019 or later, the corrections should not be reported to the Incomes Register. Corrections to payments made prior to 1 January 2019 are made directly to each data user.

However, payments recovered on 1 January 2019 or later are reported to the Incomes Register, even if the original income had been paid prior to 2019. Even though the data on recovery is reported to the Incomes Register, the payer should note that some of the data users may also require that the annual information return filed for 2018 be separately corrected according to the instructions of the data user in question. If necessary, the payer should contact the customer service for submitters of an annual information return.

2 Correcting incorrect data

The need to correct a report may arise from a payment error or a reporting error. Payment errors are situations where the report as such is correct, but the amount of income paid was too small or too large. Reporting errors are in question when, for example, the income was paid correctly but reported incorrectly to the Incomes Register due to a typing error, for example. Reporting errors also include cases where information has been incorrectly reported or mandatory information has been left out entirely.

Section 2.3 describes how withholding tax is corrected and Section 2.4 how to report negative numbers.

2.1 Correcting reporting errors

In reporting errors, the original data must be corrected or the missing data added on a replacement report by resubmitting all report data, including the data that was correct in the original report.

2.1.1 Income was reported incorrectly due to a typing error, for example

If the submitted report was incorrect due to a typing error, for example, the original data must be corrected using a replacement report by resubmitting all report data, including the data that was correct in the original report.

2.1.2 Income was reported using the wrong income type

Reporting the correct amount of payment but with the wrong income type to the Incomes Register is also a reporting error.

2.1.3 Mandatory information was not reported

A report must also be corrected when mandatory information was not reported or was reported incorrectly. Such mandatory information includes information on non-resident taxpayers or partial owners, if the income earner is a partial owner in accordance with the unemployment security act (työttömyysturvalaki 1290/2002). Correspondingly, if the insurance information for the income type has been incorrectly reported or left out altogether, the information must be corrected.

In this case, too, the report must be corrected using a replacement report with all information resubmitted. Any missing information is added to the report.

2.1.4 Correcting data already corrected

The payer may need to correct a report it has submitted several times. The number of corrections that can be made is unlimited. All data that was correct in the previous report must be resubmitted in the replacement report in this case, too.

2.1.5 Other needs to correct a report

There may also be a need to correct a report for some reason other than an error. The work circumstances or tax liability status may change, in which case the original report needs to be retroactively corrected using the replacement method. If, for example, the work period of a foreign income earner is extended so that a non-resident taxpayer becomes a resident taxpayer, the information must be corrected.

Correcting international information is described in more detail in the instructions Reporting data to the Incomes Register: international situations.

2.2 Correcting payment errors

Payment errors are situations where the report as such is correct, but the amount of income paid was too small or too large. Payment errors can be corrected in several different ways, and it is not always necessary to submit a replacement report.

2.2.1 Amount of income paid was too small, corrected with an additional payment

If the income earner has been paid too little in wages – for example, payment of overtime compensation was forgotten – the original report is not corrected. In such a case, a new report is submitted for the date on which the forgotten payment is made.

2.2.2 Amount of income paid was too large

Recovery and reporting of overpayments are described in Section 3 and Section 4.

2.2.3 Crediting an income earner for a collected reimbursement

In some situations, the payer may have collected reimbursement excessively – such as for a fringe benefit – from an income earner's income. Income types cannot be corrected in the Incomes Register using negative figures, i.e. figures with minus signs. Thus reimbursements collected from fringe benefits cannot be reported to the Incomes Register as negative figures.

A reimbursement collected from a fringe benefit reduces the income taxed as a fringe benefit as well as the income on which social insurance contributions are based. If an excessive reimbursement has been collected from an income earner for a fringe benefit, the simplest way is to collect a smaller reimbursement for the next pay period and report the collected smaller reimbursement to the Incomes Register. If this is no longer possible – for example, if the income earner is paid no more wages or fringe benefits from which the collected reimbursement could be reduced – the payer returns the extraneous reimbursement to the income earner. The amount returned to the income earner must be reported to the Incomes Register using some wage income type.

In some situations, however, the compensation paid to the income earner is not reported to the Incomes Register as taxable income. Instead, the payer must correct the submitted report and remove the excessive reimbursement collected. This must be done when, for example, the excessive reimbursement collected from the income earner's net wages does not reduce the taxable income or income subject to social insurance contributions, such as too high a garage fee or other such instalment collected from the net wages.

The same applies to situations where the fringe benefit and the reimbursement collected for the fringe benefit have been reported to the Incomes Register, and it is later discovered that the benefit was no longer available to the person. The payer must then correct the submitted report, removing the incorrect fringe benefit and collected reimbursement from the report. In such a case, the reimbursement returned to the income earner is not reported to the Incomes Register.

2.3 Correcting withheld tax

The amount of tax withheld may be incorrect, for example due to a calculation error or the use of an incorrect withholding percentage. Under certain conditions, the payer can correct the tax it withheld regardless of the reason for the error. The amount of tax withheld may be too large or too small.

2.3.1 Correcting tax withheld when the amount was too large

If the payer withheld too much tax, the error can be corrected by reducing the amount of tax withheld from a payment made later during the same calendar year (section19(1) of the prepayment act (ennakkoperintälaki 1118/1996)). This is the primary method to be used by payers when making corrections. A withholding may only be reported to the Incomes Register as a negative value when no further payments will be made to the income earner, thus making correcting impossible.

Correcting the withheld tax is voluntary to the payer, and the correction can be made regardless of the reason for the error. In recovery situations, however, it should be noted that if the payer collects the overpayment from the income earner’s net wages, withholding must be carried out based on the gross wages for the pay period in question. This means that you must not subtract the amount of the overpayment collected from the net wages from the amount of income subject to withholding. For more detail on this, see Section7 of the instructions Withholding tax (in Finnish)

The payer can correct tax withheld in too large an amount even when it no longer makes any payments to the income earner during the same calendar year. In such a case, the payer returns the extraneous amount withheld to the income earner and reports the amount returned to the Incomes Register. Based on this report, the Tax Administration will then lower the payer’s withholding obligation. The extraneous amount withheld must be returned during the same calendar year.

2.3.2 Correcting tax withheld when the amount was too small

If tax was not partially or entirely withheld, the payer can correct the error on its own initiative by increasing the tax withheld from a payment made later during the same calendar year. However, the withholding may not be increased by more than 10 per cent of the amount that would be otherwise paid that time, unless the recipient of the payment consents to a larger increase (section 19 of the prepayment act (ennakkoperintälaki 1118/1996)).

The payer reports the withholding to the Incomes Register in the amount in which it was withheld.

2.4 Reporting negative numbers

Typically, income types may not be corrected in the Incomes Register using negative numbers, i.e., numbers with a minus sign. An incorrectly reported or paid income is corrected by submitting a replacement report indicating the correct amount or changed nature of the income, for example the change of paid income to unjust enrichment. Furthermore, income recovery is reported as its own data group.

However, there are exceptional situations in the Incomes Register, where tax withheld, tax at source and social insurance contributions collected from an employee can be negative numbers. Tax withheld is not usually reported as a negative number. The amount of employee contributions, withheld tax and tax at source can often be corrected by collecting a lower amount of contributions and taxes from income paid to the income earner at a later date. This will eliminate the need to use negative numbers (see Section 4.2, Net recovery, and the examples described in the section).

Negative numbers may exceptionally appear when, for example, the employment has already ended and the amount of tax withheld or employee's social contributions collected is too large. The payer can correct tax withheld in too large an amount even when it no longer makes any payments to the income earner during the same calendar year. The payer will then return, for example, the excess amount of tax withheld, to the recipient, and report the returned amount as a negative number on the earnings payment report. The extraneous amount withheld must be returned before the end of the calendar year. The employee's social insurance contributions can be corrected in a corresponding way (for more details, see Correcting tax withheld in Section 2.3. and Correcting employee's social insurance contributions in Section 3.2.).

Items deducted from pay include the income types listed below, that can exceptionally be negative:

• 402 Withholding tax
• 404 Tax at source
• 412 Employee's health insurance contribution
• 413 Employee's pension insurance contribution
• 414 Employee's unemployment insurance contribution

It should be noted that a recovered amount cannot be corrected by reporting a negative number for the original pay period, or by reducing the amount of income of the original pay period. Recovery is reported by submitting the Recovery data connected to the income type and the additional data related to the recovery during the pay period in which the income earner pays back the overpayment. The recovered amount must always be reported as a gross amount equal to the original overpayment. Data users use the Recovery data to reduce the amount of the person's income. Some data users subtract the amount of the payment already when the overpayment is detected and the income is reported as unjust enrichment.

2.5 Correcting data in two different reporting methods of monetary wages

At a minimum, the payer must report the wages paid as a total amount (the lower level of detail for reporting monetary wages, or the so-called reporting method 1). If the payer wishes, it can report wages it has paid more specifically than required by the mandatory reporting method, using the complementary income types intended for this purpose (the greater level of detail for reporting monetary wages, or the so-called reporting method 2). These two different reporting methods are described in the instructions Reporting data to the Incomes Register: monetary wages and items deducted from wages.

Reporting method 1 and reporting method 2 cannot be combined in the same report. However, the payer can use different reporting methods in different reports. When correcting a report, the payer may change the reporting method. Nothing prevents the payer from changing wages previously reported using reporting method 1, to wages reported using reporting method 2 in the replacement report, and vice versa. The payer must then ensure that the social insurance contributions are correctly reported in the replacement report, and that the default values of the income type insurance information are taken into account. However, the same income type and reporting method originally used to report the overpayment must be used when reporting unjust enrichment and recovery.

3 Reporting and retroactively correcting a payment made on incorrect grounds

All taxable monetary payments can become unjust enrichment if the income earners are not entitled to income paid to them. Income where the income earner has been paid too much is corrected by submitting the correct amount of income on a replacement report and marking the overpayment as unjust enrichment. Unjust enrichment is discussed in Section 3.1.

However, if the payer and the income earner agree that the overpayment will be offset from a payment to be made later (i.e. treating the overpayment as advance pay), the payer does not correct the earlier overpayment into unjust enrichment. Offsetting from wages and the advance pay treatment are described in Section 4.8.

The Unjust enrichment entry cannot be used for some of the income types used in the Incomes Register due to the nature of the income. These include non-monetary benefits, such as fringe benefits. Fringe benefits have a specific value based on a decision of the Finnish Tax Administration, and if the payer has reported an incorrect value, it must correct the amount of payment on a replacement report without the Unjust enrichment entry. Information corrected for the original pay period without the Unjust enrichment entry is discussed in Section 3.1.3.

There are also some income types that are corrected on the next report. These income types are also discussed in Section 3.1.3.

Some of the Incomes Register's data users process the overpayment using the report concerning the unjust enrichment and some process it when the income is recovered. For this reason, the payer must always correct the original payment into an unjust enrichment and report the recovery information when the income has been recovered. It is not possible to only submit a report on the recovery. Instead, the information in the original report must always be corrected into an unjust enrichment. If the overpayment was made prior to 2019, the annual information returns must be corrected. When recovering overpayments made prior to 2019, only information of the recovery is reported to the Incomes Register.

3.1 Unjust enrichment

In some situations, the income earner is not entitled to a payment made to them and reported in the Incomes Register. An unjust enrichment occurs when, for example, a payment has been made on incorrect grounds, to the wrong person, or in an incorrect amount.

Unjust enrichment must be reported without undue delay and no later than within one month of becoming aware of the unjust enrichment.

Unjust enrichment is reported when the payer separately collects an overpayment from the income earner. If an overpayment is corrected in the following wage payments as advance pay deducted from the gross pay or as some other such payment, the information can, in principle, be corrected by later reporting to the Incomes Register only the gross amount actually paid to the income earner, from which the advance payment has been deducted (see 4.8. Treating an overpayment as advance pay). It should be noted, however, that handling overpayment as advance pay is not recommended, because this can distort the amount of benefits paid to the income earner or, at worst, affect eligibility for the benefit in the first place. If the overpayment is set off from the gross wages, some data users may have to separately request information on the incorrectly paid amounts. Furthermore, the wrong income will be used as the grounds for benefits.

Unjust enrichment must always be reported when the payment of the unjust enrichment leads to its being separately recovered from the income earner. It is also recommended that unjust enrichment be reported on every occasion when the overpayment cannot be fully corrected in the next payment of wages.

Unjust enrichment paid to an income earner is taxable income, but it is not income on which pension is based. For this reason, it must be possible to identify such payments in pension provision, regardless of whether or not the payer has recovered them from the income earner. Correspondingly, unjust enrichment is not subject to any other social insurance contributions, such as health, unemployment, or accident and occupational disease insurance contributions.

The payment can be recovered from the gross amount (so-called offsetting from wages), the net wages paid to the income earner (gross or net amount recovery), or the income earner can be sent a payment request (gross or net recovery). Sometimes, the overpayment can be subject to a dispute, or the regulations of the Employment Contracts Act or the collective labour agreement may prevent the recovery of the overpayment. In this case, too, the overpayment must be reported to the Incomes Register. Recovery is discussed in Section 4.

Unjust enrichment is reported in two different ways, depending on whether the income was already reported to the Incomes Register as some other type of income, or whether the unjust enrichment paid is noticed before the report is submitted.

3.1.1 The overpayment is noticed before the report is submitted

If the overpayment is noticed before the report is submitted, use the separate Unjust enrichment income type. This income type is used only when the mistakenly made payment is detected before the first report is submitted, and the income has not previously been reported to the Incomes Register as other income.

3.1.2 Overpayment has already been reported to the Incomes Register

Overpayments are usually noticed later, once the income has already been reported to the Incomes Register as some other type of income. In such a case, the original report is corrected using the replacement method. If the unjust enrichment has previously been incorrectly reported to the Incomes Register as some other income, the information must be corrected by submitting

• the previously reported income type (for example, 'Time-rate pay'), and
• submitting the separate 'Unjust enrichment' information in connection with it.

The separate 'Unjust enrichment' income type is not used in this case; instead, the separate 'Unjust enrichment' information connected to the income type is added to the previously reported payment.

With respect to correcting the report, it does not matter whether the entire payment made, or only part of it, is changed into an unjust enrichment. If the entire payment is changed into an unjust enrichment, the payer corrects the previous report using a replacement report.

With respect to correcting the report, it does not matter whether the information was reported to the Incomes Register using reporting method 1 for monetary wages (the so-called lower level of detail for reporting monetary wages) or reporting method 2 (the greater level of detail for reporting monetary wages). The correction procedure is the same, no matter which method was used to report the information.

When using reporting method 1, you must also remember to report the income subtypes connected to the income according to the actual situation, if the income subject to social insurance contributions differs from the income reported using the 'Total wages' income type.

If the amount of wages paid includes income items that are not subject to social insurance contributions, any correction of a report submitted using reporting method 1 must also include the income subtypes in the report (such as the amount of wages subject to the employee's social insurance contributions) according to the actual situation. Correspondingly, you must remember to report the Type of insurance information data connected to the income type according to the actual situation.

3.1.3 When is information corrected for the original period without the Unjust enrichment entry?

Series 300 income types that are not income actually paid to the income earner are corrected for the original pay period by reporting the correct amount of the income without the Unjust enrichment entry. These income types include:

• Income types of payments made by a substitute payer but reported by the actual employer (code values 321–325): If the substitute payer has made an overpayment to an income earner, the substitute payer corrects the report it submitted and marks the overpayment as unjust enrichment. The actual employer must then correct the report it has submitted and report the correct amount of income without including the Unjust enrichment entry.
• Fringe benefits and non-monetary benefits and payments: (code values 301, 302, 304, 317, 330, 334, 341, 342): Fringe benefits cannot be unjust enrichment, because the person has enjoyed the benefit and it is not a case of payment error (overpayment). The payment may have been reported incorrectly to the Incomes Register, but in any case, the income earner has enjoyed the benefit in the correct amount. The incorrect report is then corrected by reporting the correct value on a replacement report without including the Unjust enrichment entry.
• Treatment fee for municipal veterinarian (code value 312) and
• Wages for insurance purposes (code value 352): The treatment fee for a municipal veterinarian and wages for insurance purposes are not money actually paid to the income earner, and cannot thus be overpayments for which the Unjust enrichment entry could be made. If the data has been incorrectly reported to the Incomes Register, it must be corrected by reporting the correct amount of income on a replacement report without including the Unjust enrichment entry.
• Other payments of a nature that cannot involve unjust enrichment are Employee stock option (code value 343) and Employee stock option with a subscription price lower than market price at the time of issue (code value 361).
• In addition to the non-monetary benefits mentioned above, Tax-exempt reimbursement of expenses (code values 303, 311, 331, 357, 358) cannot in principle be unjust enrichment. A reimbursement of expenses in itself cannot be unjust enrichment, but in cases of payment exceeding the values specified in the decision of the Finnish Tax Administration on tax-exempt travel allowances, it can change into a different income type (such as wages) that can be unjust enrichment. If reimbursement of expenses are paid to an income earner in excess of the values confirmed in the decision of the Finnish Tax Administration, the report must be corrected using the replacement method by marking the overpayment as taxable income (e.g. as wages, which can be unjust enrichment).

The Unjust enrichment entry cannot easily be used for the items deducted from income and other payments of the 400 series income types, such as withholding, distraint, or reimbursements collected for fringe benefits. Even if the employer has collected a reimbursement for a fringe benefit that exceeds the taxable value of the fringe benefit, the maximum amount reported in an earnings payment report as the reimbursement collected for a fringe benefit is the taxable value. However, the reimbursement collected for a fringe benefit must be reported in the same earnings payment report as the fringe benefit, even if the reimbursement was collected beforehand or afterwards. Taxes withheld and taxes at source collected are reported as the actual amounts withheld or collected, and if the payer needs to correct the amounts, the corrected amounts are reported once the corrections have been made. Also see the instructions in Section2.2.3, Crediting an income earner for a collected reimbursement.

The income types and their descriptions can be found on the page Wage income types and in the Wages – Descriptions of income types and items deducted from income document.

3.2 Correcting employee's social insurance contributions

3.2.1 Correcting employee's earnings-related pension and unemployment insurance contributions

Employee's earnings-related pension and unemployment insurance contributions are corrected in a different way than withholding, tax at source and the employee's health insurance contribution. The recommendation is to correct employee's earnings-related pension and unemployment insurance contributions on the same report on which unjust enrichment is reported, even if the employee contributions have not yet actually been credited to the income earner.

If the employee's earnings-related pension and unemployment insurance contributions have already been corrected on the unjust enrichment report, the crediting or reduction is not reported again to the Incomes Register when the payer credits the amount to the income earner.

An alternative method for correcting an employee's earnings-related pension and unemployment insurance contributions is to correct them on the report on which the recovery of the unjust enrichment is reported.

The correction of an employee's health insurance contribution is described in Section 3.2.2. The correction of withholding is described in Section 2.3.

Correcting a collected contribution when the amount was too large

If an employee’s earnings-related pension or unemployment insurance contribution that is too large has been collected from an employee, the employer can pay back the extraneous amount collected, or correspondingly reduce the income earner’s employee contributions for a later pay period. This can occur, for example, in recovery situations or because the income changes to a type that does not constitute grounds for social insurance contributions.

Generally speaking, corrections to an employee’s earnings-related pension insurance and unemployment insurance contributions are reported in the report for the pay period during which the income is corrected, for example in the report used to correct the overpayment and change it into an unjust enrichment. The same calculation bases are used in the replacement report as in the original report, for example, the original contribution percentage.

An employee’s earnings-related pension insurance and unemployment insurance contributions can also be corrected in the report used to report the recovery of the overpayment, i.e., in the report submitted once the income earner has paid back the overpayment. This is only possible if the contributions are corrected during the same calendar year. If the correction is made after the calendar year in question, the employee contributions must be corrected by reporting an unjust enrichment.

It is recommended that an employee’s earnings-related pension insurance and unemployment insurance contributions be corrected in the report in which the unjust enrichment is reported. The reporting of unjust enrichment is described in more detail (with examples) in Section3.1 Unjust enrichment. Correcting employee’s earnings-related pension insurance and unemployment insurance contributions is described in Examples11 and 12.

If an employee contribution considered too large that has been collected cannot be subtracted from the income earner’s employee contributions for a later pay period, and the payer has not already reduced the amount in the report submitted for unjust enrichment or in the recovery report, the excessive amount collected can be paid back to the income earner and the amount can be reported as a negative value in an earnings payment report. This is only possible if the contributions are corrected during the same calendar year.

Correcting a collected contribution when the amount was too small

In some situations, the law prevents the employer from collecting overly small contributions from the income earner in later wage payments. For example, if an employee's earnings-related pension insurance or unemployment insurance contribution has not been collected due to an obvious error during the payment of wages, the employer can collect the uncollected contribution during the next two wage payments, but not after that.

In situations requiring correction, the payer reports the amount collected from the income earner to the Incomes Register on the report for the pay period during which the payer collects the increased employee contribution.

Correcting a submitted report when the lower limit for earnings-related pension insurance is exceeded during the same month is described in Section 6.3 Correcting Exception to insurance information.

3.2.2 Correcting employee's health insurance contributions

When the income earner is a resident taxpayer, the employee's health insurance contribution is always included in the tax withholding. For this reason, in general the health insurance contribution of an income earner who is a resident taxpayer is not separately reported to the Incomes Register.

If an employee who is a non-resident taxpayer is covered by the Finnish social security, the health insurance contribution of a non-resident taxpayer must be collected separately in addition to tax at source, unless the non-resident taxpayer wishes to be taxed in accordance with the tax procedure act (laki verotusmenettelystä 1558/1995), in which case the health insurance contribution is included in the withholding tax or prepayment of tax. If the health insurance contribution has been collected separately and the paid income or part of it changes to an unjust enrichment, the health insurance contribution is corrected in the same report in which the recovery of the income is reported. Unlike in the correction of an employee's earnings-related pension insurance and unemployment insurance contributions, the health insurance contribution cannot be corrected until the income has been recovered.

The instructions Reporting data to the Incomes Register: international situations describe the information correction procedure when tax at source and health insurance contributions have been collected from an income earner who is a non-resident taxpayer, but the income earner becomes a resident taxpayer, in which case the information previously reported as tax at source and the employee's health insurance contribution is reported as tax withheld using a replacement report.

4 Recovery of a payment

4.1 General information on the recovery of wages and other payments

When the income earner pays back a mistakenly paid unjust enrichment or other payment to the payer, the payback must be reported to the Incomes Register. The recovered amount is not corrected on the original report; the recovered amount is reported during the pay period in which the income is recovered. 'Action type' is 'New report'.

The following information is provided for the recovered income:

• Income type
• Recovery – Yes
• Recovered amount
• Recovery date
• Withholding from the recovered amount (if net recovery) or tax at source from the recovered amount (if net recovery)
• Original pay period

Additionally, the following information on the recovered income can be provided as complementary additional data:

• Earnings period of the recovered income
• Original payment date

The ‘Recovery’ entry data must be used for the same income type the payer used when reporting the income as an unjust enrichment. However, the overpayment can be recovered from other income paid to the person (see Example24).

The ‘Original pay period’ to be reported in ‘Additional recovery details’ is the pay period during which the payment subject to recovery was originally paid to the income earner.

The payment can be recovered as a gross amount (gross recovery) or as a net amount (net recovery).

The most common methods of recovery are:

• the overpayment is recovered from the income earner’s net wages;
• an invoice is sent to the income earner, who pays it;
• the overpayment is set off from a later payment made to the income earner, for example by reducing the amount of gross wages (‘offsetting’, i.e. treating the overpayment as advance pay, which is not recommended).

If the payment can be recovered in enforcement proceedings, the recovered amount reported should only include the overpayment, excluding any interest. The recovery is reported once the enforcement authority has paid the recovered amount to the payer.

Each data user has independently defined how they use data disclosed to them from the Incomes Register in their internal processes. Some data users take note of the report on an unjust enrichment due to an overpayment and ignore the subsequent recovery report, while for other data users, the recovery report is important. To ensure that all data users can correctly obtain the data they require from the Incomes Register, the details of the overpayment must be correctly reported: the overpayment must be corrected to an unjust enrichment and the repayment of the overpayment must be separately reported.

This section uses examples to describe how the information is reported to the Incomes Register, if the payment is recovered as a gross or net amount. The section also includes a description of how to report when the overpayment is handled as advance pay paid to the income earner.

4.2 Net recovery

‘Net recovery’ means that the payer recovers the overpayment from which it has first deducted the share of tax withholding or tax at source from the income earner. The Tax Administration takes into account the withholding or tax at source in the payer’s obligations.

If the recovery is carried out as a net amount, the tax withheld from the amount recovered from the employee should only reported in ‘Additional recovery details’ under ‘Withholding from the recovered amount’. A withholding may not be reported as a negative value. The amount of withholding reported here is taken into account in the payer’s withholding obligation for the original wage payment month. Tax at source on the recovered amount is reported correspondingly if tax at source was originally collected from the overpayment and the income is recovered as a net amount.

The income can be recovered from the income earner as a net amount if the income is repaid during the same year or at the beginning of the following year by the date defined in the Finnish Tax Administration’s decision (presently 30April). After this date, the recovery must be carried out using the gross recovery method.

The Tax Administration will establish the time limit in its decision on the repayment due date of recovered income in the payer’s taxation. The decision is based on the act on assessment procedure for self-assessed taxes (laki oma-aloitteisten verojen verotusmenettelystä 768/2016, section51(5)), which lays down provisions on the adjustment of the payer’s obligations. The taxation of the payer’s tax period is not adjusted if the payment recipient repays income received in a previous year to the payer so late that the withholding or tax at source collected from the income has already been taken into consideration in the payment recipient’s taxation. Thus, the due date established by the Tax Administration effectively determines the time limit by which the payer can recover the payment using the net recovery method. The decision will be applied for the first time to withholding and tax at source collected from payments repaid on or after the date the act came into force.

When the income is recovered as a net amount, and the tax withheld from the recovered amount is reported in ‘Additional recovery details’ under ‘Withholding from the recovered amount’, the tax withholding amount that is the payer’s employer obligation for the original payment period is reduced. Additionally, based on the information in question, the Tax Administration will also correspondingly reduce the amount of tax withholding previously accredited to the income earner. Tax withheld from the recovered income is reported as the amount originally withheld from the overpayment. Even a change in the tax withholding percentage after the overpayment does not affect this. Tax at source on the recovered amount is reported correspondingly if tax at source was originally collected from the overpayment and the income is recovered as a net amount.

Even if the income is recovered as a net amount, the recovered overpayment is reported to the Incomes Register as the amount of the original overpayment, i.e. as the gross amount. If the payment is recovered in several instalments, the payer reports the part of income recovered at each time and includes the recovery data (see Section4.5). Tax withheld from the recovered amount is reported as separate information, and tax withholding is not deducted from the amount of the recovered income.

4.3 Gross recovery

Gross recovery means that the overpayment is recovered from the income earner as a gross amount, or in the same amount that was paid to the income earner. The recovered amount includes the withheld tax. In gross recovery, the payer can, for example, send an invoice to the income earner, or recover the overpayment at a later date from the net wages paid to the income earner.

In gross recovery, the payment cannot be recovered from the gross wages paid to the income earner. If the payment is recovered from the gross wages paid to the income earner, this is offsetting from wages, and the recovery must not be separately reported to the Incomes Register in these situations. Offsetting from wages is discussed in Section 4.8.

Gross recovery with an invoice or other such claim may come into question when no more wages or other payments will be paid to the income earner. The payer cannot then recover income from a payment made later; instead, the income must be recovered from the income earner as a gross amount. The income earner must pay the overpayment back to the payer in the same amount.

The recovery data must be reported using the same income type used to report the overpayment as unjust enrichment. However, the overpayment can be recovered from some other net income paid to the person.

If the income is recovered from the income earner as a gross amount, the payer does not deduct the tax withheld from the recovered amount. Once the income earner has paid back the overpayment and the payer has reported it to the Incomes Register, the Tax Administration will take the recovery into consideration in the income earner’s taxation, by correspondingly reducing the income earner’s income amount. However, the tax withheld from the income will be accredited to the income earner in taxation. The Tax Administration will take the amount of recovered income into account in taxation, if the person’s taxation for the year in question has not yet been completed. If the recovery takes place later, the Tax Administration will adjust the income earner’s taxation on the basis of the information submitted by the payer to the Incomes Register. If the overpayment was made prior to 2019, see Section 1.7 for instructions.

With respect to reporting the recovery, it does not matter whether the information was reported to the Incomes Register using reporting method 1 for monetary wages (the so-called lower level of detail for reporting monetary wages) or reporting method 2 (the greater level of detail for reporting monetary wages). The reporting procedure is the same, no matter which method was used to report the information. However, the payer must use the same reporting method (method 1 or 2 for reporting monetary wages) and income type used to report the overpayment as unjust enrichment.

In reporting method 1, you must remember to report the allocation of the recovery to the earnings from work reported using income subtypes. Additionally, you must remember to report the Type of insurance information data connected to the recovered income according to the actual situation.

4.4 Recovered amount includes several income types

In some cases, the recovered amount can include several income types, such as time-rate pay, overtime compensation, and holiday bonus, for which one shared tax withholding has been carried out. In such cases, the recovered income types must be reported separately, but the tax withheld from the recovered amount can be reported as a total amount. Correspondingly, employee contributions collected from the overpayment can be deducted from other employee contributions.

4.5 Amount is recovered in several instalments

The overpayment can be recovered from the income earner in several instalments. The payer will report the part of income recovered at the time in question as recovery information. The total amount is not reported. When the error is detected, the original report is corrected with a replacement report and the entire overpayment is marked as an unjust enrichment. However, the recovery is reported in the report for the pay period during which the income is recovered.

4.6 The overpayment has been paid for a longer period and is recovered in instalments

The overpayment can have been paid to the income earner over several pay periods before the error is detected. The previous pay period and payment date on which the income was originally paid to the income earner is reported in the additional recovery information.

4.7 The overpayment has been paid for a longer period and is recovered in one instalment

The overpayment may have been paid to the income earner for a longer period of time, but the income is recovered in one instalment. In such situations, in the recovery report the payer must itemise which part of the recovered income was paid during which pay period.

4.8 Treating an overpayment as advance pay

The payer can also correct the overpayment made in the Incomes Register without treating the payment as an unjust enrichment. The payer will then treat the payment in the earnings payment report as previously paid advance pay or another such item. The payer deducts the overpayment from a payment made at a later date. The payer recovers the overpayment by setting off the overpayment from the income earner's next wage payment's gross wages. The next payment of wages means the payment of wages carried out after the overpayment was detected. If the overpayment was made in April, for example, and is not detected until the end of June after the wages for June have already been paid, the overpayment can be offset in the payment of wages for July.

If the deduction in the next wage payment is made from the same income type with which the earlier overpayment was reported to the Incomes Register, you should report to the Incomes Register, in connection with the next wage payment, only the amount actually paid to the income earner – that is, the gross wages of the type of income that is left once the previous overpayment is deducted from it. Treating the overpayment as advance pay is permitted in an earnings payment report submitted to the Incomes Register only if the overpayment can be recovered in total in connection with the next wage payment following the discovery of the overpayment.

This procedure is not recommended, because it can distort the amount of benefits paid to the income earner or, at worst, affect eligibility for the benefit in the first place. If the overpayment is set off from the gross wages, some data users may have to separately request information on the incorrectly paid amounts. Furthermore, the wrong income is used as the grounds for benefits. Treating the overpayment as advance pay is voluntary for the payer. Alternatively, the payer can report the overpayment as an unjust enrichment.

However, the deduction need not be made from the same income type as the earlier overpayment. If the payer sets off the overpayment from another income type, it must correct the original report and change the previous overpayment into the same income type from which the deduction will be made during a later wage payment. Again, treating the payment as advance pay is only allowed in an earnings payment report submitted to the Incomes Register if the overpayment can be recovered in its entirety in connection with the next wage payment following the discovery of the overpayment. The amount reported to the Incomes Register in connection with the next wage payment must also match the amount actually paid to the income earner, that is, the gross wages of the type of income which is left once the previous overpayment is deducted from it.

If the overpayment cannot be fully deducted from the next wage payment, the payer must correct the overpayment to an unjust enrichment (see Section3, Reporting and retroactively correcting a payment made on incorrect grounds).

The Incomes Register's method of reporting the overpayment information is described in Section 3.1.

4.9 Unjust enrichment and recovery in the same report

The reporting of an unjust enrichment and recovery has been described above. You can report an unjust enrichment paid during the pay period in question and the income recovered during the same pay period in the same report. Because the unjust enrichment must be reported to the Incomes Register within one month of its detection, situations may arise where the unjust enrichment paid can be recovered during the same pay period. The unjust enrichment must be reported in these situations, too.

4.10 Recovery of fringe benefits

If there is an error in the amount of the reported fringe benefit, the amount must be corrected in the report for the month when the fringe benefit was originally used. A fringe benefit cannot be an unjust enrichment, because the person has had access to the benefit during that time (see Section3.1.3, ‘When is information corrected for the original period without the “Unjust enrichment” entry?’). When a payer recovers income from an income earner, the recovery is collected from monetary wages. In certain situations, the share of a fringe benefit can also be recovered, and in such cases, the share of the non-monetary benefit is also collected from monetary wages. In such cases, the recovered amount can be reported as a reimbursement collected for a fringe benefit, provided that the person in question still has access to the fringe benefit. However, it should be noted that the amount reported as a reimbursement collected for a fringe benefit may not exceed the taxable value of the fringe benefit, even if the recovered amount was actually higher.

If no further wages are paid to the income earner, and the payer is also recovering the share of the fringe benefit from the income earner, the payer reports this by submitting a replacement report and indicating the share of previously paid wages equalling the amount of the fringe benefit as an unjust enrichment. Once the income earner repays the overpayment, the payer must report the share of the wages as recovered. The amount of the fringe benefit reported in the report remains the same as during the month in question.

5 Cancellation of data

Cancellation of data means the deletion of data from the Incomes Register. The payer can entirely delete a submitted record or report if it was erroneous. When a report is cancelled, the previously submitted report is deleted. The deletion is allocated to the correct report based on the Incomes Register’s report reference or the payer’s report reference.

The unnecessary cancellation of correctly submitted reports should be avoided. We do not recommend cancelling the data before the new report can be submitted. The recommendation is that the cancellation of the previous report and submission of the new report be made on the same day; for more details, see Section6.4.

Data is deleted in different ways via different reporting channels. If the report is deleted using the e-service online form or a paper form, the report data to be deleted is submitted in an earnings payment report or the employer's separate report according to which type of report is in question. In the e-service online form, open the previously submitted report and select 'Delete'. Correspondingly, select 'Report cancellation' as the action type on a paper form.

If the data is submitted via the technical interface or the upload service, records and reports are not cancelled using the same earnings payment report or employer's separate report in which the new and replacement reports are submitted. Cancellation has been separated into its own record type. If the record type is the cancellation of an earnings payment report or the cancellation of an employer's separate report, provide the following information:

• record owner's (payer's) identifier
• payer’s report reference, or
• Incomes Register report reference.

You can provide the report's version number. The version number is voluntarily submitted, complementary additional data.

When cancelling an entire record, use the record reference of the record in question.

6 Correcting data by cancelling a previously submitted report

Although corrections to data in the Incomes Register are usually made using a replacement report, there are situations in which the replacement method cannot be used, but the previously submitted report must be cancelled instead, after which a new report with the correct data must be submitted.

The data must be corrected by cancelling the previous report and submitting a new one in the following situations:

• Payment day correction
• Pay period correction
• Correction of the payer’s and income earner’s customer identifications
• Correction of the type of additional income earner data when changing the additional data ‘Athlete’ or ‘Organisation’
• Correction of payer type when changing the information ‘Temporary employer’
• Correction of the customer identifications of the actual employer in the ‘Substitute payer’ data group
• Correction of the ‘Acts as substitute payer’ entry
• Correction of the income earner’s birth date
• Correction of the earnings-related pension insurance information
• Correction of a pension policy number
• Correction of the occupational accident insurance company identifier or policy number
• Corrections to ‘Type of exception to insurance’ data
  • Retroactive changes to the ‘No obligation to provide insurance’ entry
  • Retroactive changes to the ‘Not subject to Finnish social security’ entry
  • Retroactive changes to the ‘Voluntary insurance in Finland (earnings-related pension insurance)’ entry.

We do not recommend cancelling the data before the new report can be submitted. The recommendation is that the cancellation of the previous report and submission of the new report be made on the same day.

If the correction is made on a paper form, enter 'Report cancellation' as the action type. If the information is corrected via the e-service, the payer can open a previously submitted report and delete it. If the information is submitted via the technical interface or the upload service, the payer submits the necessary information in a cancellation report (see Section 5). The payer must then submit a new report with the correct data.

6.1 Correcting the payment date and pay period

If the payment date or pay period of a payment was incorrect, the data cannot be corrected using a replacement report for the payment date in question. The previously submitted report must be cancelled, after which a new report must be submitted with the payment date and pay period correctly reported.

If all reports of a submitted record contained an incorrect payment date or pay period, the entire record can be cancelled using the record reference generated by the Incomes Register or the payer's own record reference.

6.2 Correcting customer identifiers, pension policy numbers and insurance policy numbers

If the customer identifier used as the income earner's or the payer's identifying information has been incorrectly reported to the Incomes Register, the information must be corrected by cancelling the previously submitted report and submitting a new report.

This procedure applies to corrections to the following data:

• Correction of the payer's and income earner's customer identifications
• Correction of the customer identifications of the actual employer in the Substitute payer data group
• Correction of the income earner's birth date
• Correction of a pension policy number
• Correction of the Occupational accident insurance company identifier or policy number.

If a foreign person later receives a Finnish personal identity code, the personal identity code is reported on the next report submitted after the change. Correspondingly, if the person's sex changes, the new identifier is reported on the next report submitted after the change. In these cases, the previous reports do not need to be corrected. The foreign customer identifier must still also be reported for foreign income earners and payers.

For information on how to correct the information, see Example 36 in Section 6.1.

6.3 Correcting Exception to insurance information

If the income earner's insurance provision obligation has been incorrectly reported or the circumstances change at a later date, the information must be corrected by cancelling the previously submitted report and submitting a new report. Correction by cancellation applies to the following information:

• Retroactive changes to No obligation to provide insurance data
• Retroactive changes to Not subject to Finnish social security data
• Changes to Voluntary insurance in Finland (earnings-related pension insurance) data.

Corrections to Type of exception to insurance information involve a situation in which the income earner's income was originally reported as being subject to social insurance contributions, but it is later noticed that there would have been no obligation to provide insurance with regard to the income paid to the income earner, that the income earner is not subject to Finnish social security, or that the person is covered by voluntary insurance in Finland. In such a case, the original report must be cancelled, after which a new report must be submitted with the correct Type of exception to insurance information. The above procedure must be used in order to also deliver the data to social insurance providers who had received the incorrectly reported data.

The data must be corrected in the manner described above also when it was originally reported that the income earner is not subject to Finnish social security or if there is no obligation to provide insurance for the income earner, and it is later discovered that the income should have been reported as subject to social insurance contributions.If the income paid to the income earner falls below the lower limit for earnings-related pension insurance (EUR 61.37 per month in 2021) and this limit is later exceeded during the same month, the payer must cancel the previous report and submit a new report with the correct data.

If the person is not obligated to take out YEL or MYEL insurance due to the small scale of their business operations, the ‘No obligation to provide insurance’ entry is reported, and no earnings-related pension insurance details need to be given. Additionally, the ‘Self-employed person, no obligation to take out YEL or MYEL insurance’ entry must be submitted in the additional income earner details. If it is later discovered that the income earner would have been obligated to take out insurance – for example, after the business has grown – the payer must cancel the previously submitted reports and submit new ones, as described in the example below.

6.4 Impacts of cancellations on the payment of self-assessed taxes

Where erroneous reports submitted to the Incomes Register are corrected by cancellation, the old report must be cancelled and the new report must be submitted during the same day. Reports submitted between 4:00 and 6:00p.m. may in some isolated cases be recorded for different days. Due to this, you should submit your reports either before 4:00p.m. or after 6:00p.m.

If data submitted to the Incomes Register is corrected by cancelling a previous report, check the time of refund of self-assessed taxes from the MyTax service. Depending on the refund time, a payment intended for the Tax Administration may be returned to the payer if the new data reported to the Incomes Register is not transferred to the MyTax service in sufficient time. By selecting ‘The refund will be saved for later use’ as the refund time in the MyTax service, payments intended for employer contributions will not be unnecessarily refunded to the payer.

If either ‘Refund immediately after processing’ or ‘Refund after the due date following the day of filing’ is selected as the refund time, a payment intended for the Tax Administration may be returned to the payer. In such a case, MyTax will treat the tax payment as unpaid and will calculate late payment interest on the payment starting from the payment’s original due date.

7 Correcting an employer's separate report

7.1 General information on correcting an employer's separate report

If there has been an error in the information in an employer's separate report, the payer must correct the submitted information. An employer's separate report is corrected in the same way as an earnings payment report. An incorrect report is corrected using a replacement report. This means that the payer corrects the incorrect information and resubmits all other information in the report, including the information that was correct.

The correction of an employer's separate report is allocated to the correct report using the Incomes Register's report reference or the payer's own report reference (for more details on report references, see Section 1.4., How is a correction allocated to the correct report?).

The payer may also make the deduction during the current pay period, i.e. when the payer is notified of the benefit decision. The amount of the health insurance contribution for the current period will then be reduced, but the payer will not receive the compensatory interest that would have been paid if the deduction had been paid retroactively for the original period.

If the income data on an earnings payment report changes in such a manner that the amount of the employer's health insurance contribution also changes, the payer must also correct the submitted employer's separate report. This is the case when, for example, wages paid change to an unjust enrichment. The payment will then no longer be subject to a health insurance contribution. All information, including the information that was correct, must be resubmitted.

7.2 Correcting data by cancelling a previously submitted report

There are certain situations involving error correction in the employer's separate reports, where the replacement method cannot be used, but the previously submitted report must be cancelled instead, after which a new report with the correct data must be submitted.

The data must be corrected by cancelling the previous report and submitting a new one in the following situations:

• Correction of a reporting period
• Correction of the payer's customer identification
• Correction of a pension policy number
• Correction of the Occupational accident insurance company identifier or policy number.

For more details on submitting data in an employer's separate report, see the instructions Reporting data to the Incomes Register: employer’s separate report.

8 Key rules regarding corrections and the reporting of overpayments

Any corrections to data reported to the Incomes Register must be carried out according to the principles below. The key principles regarding reporting and the correction of data:

• The earnings payment report is only used to report amounts actually paid to the person in question.
• The earnings payment report is only used to report taxes and other charges actually collected from the person in question.
  • Any technical deductions such as transfers of income from one pay type to another made in the payroll system must not be reported to the Incomes Register.
  • Employee contributions or other reimbursements must not be reported if they have not actually been collected from the person in question and deducted from their wages.
  • Withholding must not be reported if it has not actually been collected from the person in question and deducted from their wages.
• Negative taxes and employee contributions can only be reported if funds have actually been returned to the person in question.
• Negative withholding tax can only be reported if the withholding tax cannot be adjusted by reducing tax withheld from subsequent wages.

When reporting an overpayment, or an unjust enrichment, keep in mind the following:

• Overpayments cannot be reported as negative values.
• An overpayment is reported by correcting previously reported income to an unjust enrichment.
• Fringe benefits and non-monetary benefits cannot be reported as an unjust enrichment.
• Tax-exempt reimbursements of expenses cannot be reported as an unjust enrichment.
• Charges collected from income or other deductions (400 series income types) cannot be reported as an unjust enrichment.
• Income cannot be reported as recovered, unless it has first been reported as an unjust enrichment.
• If an overpayment is treated as advance pay (offsetting from wages), it must not be reported as an unjust enrichment.
  • Offsetting from wages is not recommended, because it can distort the amount of benefits paid.
• Reporting an overpayment as an unjust enrichment reduces the amount of social insurance contributions to be paid.

When reporting recovered income, keep in mind the following:

• Recovery must only be reported if income was actually collected from the person in question.
• Recovered income cannot be reported to as a negative amount.
• The income must first be reported as an unjust enrichment before reporting its recovery.
• Recovered income must be reported in a separate report with the details of the recovery.
• Recovery must not be reported before the income is actually collected from the person in question.
  • Any planned recoveries must not be reported.
• Income can be recovered as either a gross or a net amount.
  • In gross recovery, the payer recovers the overpayment from the income earner according to the actual amount overpaid. The recovered amount also includes the share of withholding originally carried out from the income.
  • In net recovery, the payer recovers the overpayment, from which they have first deducted the proportion of withholding carried out on the income original payment date. The payer reports the withholding amount in ‘Additional recovery details’ under ‘Withholding from the recovered amount’. However, the overpayment must be reported to the Incomes Register according to the original overpayment, i.e. so that the amount reported also includes the share of withholding.
  • The ‘Withholding from the recovered amount’ entry impacts the payer’s withholding obligations and reduces the amount withheld from the income earner.
  • Income must always be recovered from net wages.
  • Net recovery is possible until the due date determined by the Tax Administration.
• Fringe benefits and non-monetary payments cannot be recovered in the same way as monetary wages.
• Charges collected from income or other deductions cannot be reported as recovered.
• If an overpayment is treated as advance pay (offsetting from wages), it must not be reported as recovered.
• Recovery data has no impact on obligations to pay social insurance contributions.

8.1 Three examples of the treatment and reporting of overpayments

An overpayment can be recovered in three different ways:

1. net recovery
2. gross recovery
3. treatment of the overpayment as advance pay (offsetting from wages)

Reporting an unjust enrichment precedes a recovery report

Reporting recovery data requires that an overpayment has been corrected as an unjust enrichment in the report of the original payment date of the income. Income cannot be reported as recovered, unless it has first been reported as an unjust enrichment.

The Unjust enrichment entry impacts the obligations to pay social insurance contributions. Based on this data, social insurance providers will then reduce the wages subject to social insurance contributions (to EUR2,000 in the example case). Other social insurance contributions will be automatically adjusted based on the replacement report, but the payer must submit an employer’s separate report to adjust the health insurance contribution according to the correct amount of wages paid (EUR2,000).

Even though the overpayment is corrected to an unjust enrichment, the income earner’s taxable income will remain at EUR2,200, and the amount of withholding at EUR550 according to the actual amount withheld.

Because the pay subject to social insurance contributions is reduced, the employee’s earnings-related pension insurance and unemployment insurance contributions reported to the Incomes Register must also be corrected. The payer may reduce the amounts of the employee contributions when reporting the unjust enrichment or, alternatively, when reporting the recovered income. If the recovery does not take place until the following calendar year, the amounts of the employee contributions must be corrected already when reporting the unjust enrichment. The payer may also return the excessive employee contributions collected to the income earner or collect a lower amount of contributions during the next payment of wages but still report the income as if the contributions were collected from the income in a normal manner.

The reporting of an unjust enrichment has no impact on the amount of withholding carried out.

8.1.1 Net recovery

Net recovery means that the payer recovers the overpayment, from which they have first deducted the share of withholding carried out on the original payment date.Even then, the overpayment must be reported to the Incomes Register according to the original amount, without deducting the share of withholding from the total amount.

The income can be recovered from the income earner as a net amount if the income is repaid during the same year or at the beginning of the following year by the date determined by the Tax Administration (30April). This ensures that the Tax Administration can access the data before the person’s tax assessment is completed, and the withholding will not be accredited to the income earner in taxation. The Tax Administration will allocate the withholding correction to the payer’s withholding obligations for the original payment month.

The ‘Withholding from the recovered amount’ entry impacts the employer’s withholding obligation. Based on the entry, the employer’s obligations for the tax period will reduce (by EUR50 in the example case). Correspondingly, the income earner’s income for the tax year in question will reduce by EUR200 and withholdings accredited to the income earner by EUR50. Recovery data has no impact on obligations to pay social insurance contributions. In the example case, the social insurance contributions are determined on the basis of EUR2,000.

In the example, the income earner’s income after taxes and employee contributions totals EUR1,429: EUR2,000 (gross income) – EUR400 (20% withholding) – EUR171 (employee contributions). The recovery is carried out from the net wages: EUR200 (overpayment, gross) – EUR50 (25% withholding) = EUR150 (recovered amount). This means that the income earner will be paid EUR1,279 (EUR1,429 – EUR150).

8.1.2 Gross recovery

Gross recovery means that the overpayment is recovered from the income earner as a gross amount. The payer recovers the amount paid to the income earner, plus the original withholding carried out from the income. In gross recovery, the payer can, for example, send an invoice to the income earner, or recover the overpayment at a later date from the net wages paid to the income earner. Payers can use gross recovery even if net recovery was also possible.

In the example, the income earner’s income after taxes and employee contributions totals EUR1,429: EUR2,000 (gross income) – EUR400 (20% withholding) – EUR171 (employee contributions). The recovery is carried out from the net wages. This means that the income earner will be paid EUR1,229 (EUR1,429 – EUR200).

The employer’s obligations for January will not be reduced. The income earner’s taxable income will be reduced by EUR200, but the amount of withholding will remain the same.

In terms of reporting, the difference between gross and net recovery is that in gross recovery, the payer must not report the Withholding from the recovered amount entry.

8.1.3 Offsetting from wages, i.e. treating the overpayment as advance pay

The payer can also correct the overpayment made in the Incomes Register without treating the payment as an unjust enrichment. In such a case, the payer treats the overpayment as advance payment and offsets it during the next payment of wages after noticing the error. In other words, the payer deducts the overpayment from the next gross wages. Treating an overpayment as advance pay is only permitted if the overpayment can be recovered in full during the next payment of wages.

If an overpayment is offset during the next payment of wages, an unjust enrichment or recovery must not be reported.

However, treating the overpayment as advance payment (or offsetting from gross wages) is not recommended. The procedure is described in more detail in Section4.8.