Wage income types: 300 series

301

Accommodation benefit

A fringe benefit established by the employer, providing the employee with an apartment the employer owns or possesses based on a lease relationship related to the employment, or as a benefit included in the pay.

An accommodation benefit can be reported separately, but the received benefit must be reported, as at least a total sum, using the income type Other fringe benefit (317). In such a case, Type of benefit additional data related to the income type must be used to report that the income reported with the Other fringe benefit income type includes an accommodation benefit.

If the benefit is reported separately, it should not be added to the income reported using the income type Other fringe benefit (317).

The amount of the accommodation benefit must be reported in full, even when the employee has paid a reimbursement for the benefit to the employer equalling the monetary value of the accommodation benefit, with no taxable benefit remaining.

Tax is withheld and social insurance contributions are paid from the accommodation benefit.

302

Interest benefit for a housing loan

A taxable personnel benefit established when the employer collects annual interest from a housing loan it has granted to an employee that is lower than the reference interest rate commonly used in the market.

Interest benefit for a housing loan is subject to withholding but not to social insurance contributions.

303

Meal allowance

Tax-exempt compensation of meal expenses that are due to a business trip.

The meal allowance can be paid exempt from tax, if the employee does not have the opportunity to have a meal at their normal eating-place during their lunch break and the meal has not been arranged, for example, as a meal that forms part of the course package paid for by the employer. A tax-exempt meal allowance cannot be paid together with a tax-exempt daily allowance for the same business trip.

The decisions issued annually by the Tax Administration on tax-exempt allowances for business travel lay down the grounds for meal allowances and their tax-exempt maximum amounts.

Report only the amounts of tax-exempt meal allowances here. If the paid allowance exceeds the maximum amounts defined in the decision by the Tax Administration, or is paid in deviation from the grounds laid down in the decision, the payment should be reported as wages subject to social insurance contributions.

A meal allowance can be reported separately, but the received allowance must be reported as at least a total sum, using the income type Daily allowance (331). In such a case, the payer must also use the Type of daily allowance additional data related to the income type to report that the allowance reported with the income type includes a meal allowance.

If the meal allowance is reported separately, it should not be added to the amounts reported using the income type Daily allowance (331).

No tax is withheld or social insurance contributions are paid from a tax-exempt meal allowance.

304

Car benefit

A fringe benefit established by the employer, providing the employee or their family with a car that the employer owns or possesses and allowing its private use.

The car benefit must be reported even if the employee has paid the employer compensation for the fringe benefit equal to or exceeding the monetary value of the fringe benefit, with no remaining amount to be added to the wages. The collected amount is reported separately using the income type Compensation collected for car benefit (401).

Tax is withheld and social insurance contributions are paid from the car benefit.

308

Compensation for membership of a governing body

Compensation for acting in a position of trust, paid based on being a member of the company's board of directors or an equivalent governing body.

If the recipient of compensation paid for membership of a governing body is not in an employment relationship, the payment of earnings-related pension insurance contributions from such compensation is voluntary in the private sector. However, in the public sector, compensation paid for membership of a governing body is subject to social insurance contributions. If, based on the compensation, the employee's earnings-related pension contribution does not have to be paid according to employment pension legislation, the employer's health insurance contribution and the employee's daily allowance contribution are not paid from the compensation, even if an earnings-related pension insurance contribution was paid voluntarily. This compensation is subject to the accident and occupational disease insurance contribution, if it is paid to a person in an employment relationship.

Tax is withheld from compensation paid for membership of a governing body.

By default, this income type is compensation paid for membership of a governing body, where such compensation is not subject to social insurance contributions. In sectors other than the public sector, the essential factor with regard to the contribution obligation is whether the compensation was paid in an employment relationship.

If the recipient of the compensation is in an employment relationship and the compensation is subject to a social insurance contribution, the payer must report it by specifying insurance information in conjunction with the income type.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

If a person is paid compensation for membership of a governing body, the person can also be paid tax-exempt allowances for business travel based on the expenses incurred from a business trip, if the other prerequisites of tax-exempt allowances are fulfilled.

309

Share of reserve and surplus drawn from personnel fund (taxable 80%)

A fund unit paid to an employee from a personnel fund. Funds allocated to personnel funds are divided into items withdrawable as fund units and items withdrawable in cash.

20% of a fund unit withdrawn from a personnel fund is tax-exempt, and tax is withheld from the 80% share of taxable income. For taxation purposes, surplus withdrawn from a personnel fund is treated in the same way as a fund unit withdrawn from a personnel fund.

More detailed instructions available in the Tax Administration's guidance Taxation of income from a personnel fund (VH/3038/00.01.00./2018).

This income type is used to report only the taxable share.

Tax is withheld, but social insurance payments are not paid from a withdrawn fund unit. However, social insurance contributions are paid from a fund unit withdrawn for a person in cash rather than paying it into the personnel fund, i.e., the employer does not pay the amount into the fund but directly to a member.

Only items withdrawn from a fund as fund units are reported in this section. If the payment was withdrawn in cash, it is reported as regular wages.

310

Monetary gift for employees

A gift received from the employer as money or a comparable payment.

A monetary gift is considered to be taxable income from which tax must be withheld but which is not subject to social insurance contributions, if the monetary gift was given due to an anniversary concerning the employee.

If the monetary gift was given for a reason other than such an anniversary, social insurance contributions must be paid based on the gift.

By default, this income type is subject to social insurance contributions.

If a payment reported using this income type differs from the default, the payer must report it by specifying insurance information in conjunction with the income type.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

311

Kilometre allowance (tax-exempt)

A kilometre allowance fulfilling the requirements set for tax exemption, paid to a person for their use of a vehicle they own or possess.

Tax-exempt kilometre allowance can be paid to persons who are in an employment relationship and to persons who are not in an employment relationship but who are paid wages in accordance with tax legislation, for example as meeting fees.

In certain cases, the kilometre allowance paid for the use of a private car can be increased. The grounds for the increase are laid down in section 9 (1) of the Tax Administration's decision on expenses. This income type is used to report the total amount of allowances paid, including the increases.

If the kilometre allowance has been paid against the criteria prescribed by law or set by a decision of the Tax Administration, no part of it is tax-exempt.

If the kilometre allowance has been paid in accordance with a decision by the Tax Administration, but in a larger amount than specified as tax-exempt in the decision, some of the allowance is taxable and some is tax-exempt. Taxable kilometre allowances are reported separately using their own income type or the income types for wages.

Compensation paid to an income earner for travel expenses based on a certificate (e.g. a train ticket) issued by a transport operator is tax-exempt, and is not reported.

Report only the amounts of tax-exempt kilometre allowances here. No tax is withheld or social insurance contributions are paid from these amounts.

Reimbursement of travel expenses between residence and place of work in the construction sector

According to the collective agreement of the construction sector, daily travel expenses between residence and place of work are reimbursed according to a special table, not as kilometre allowances set by a decision of the Tax Administration. However, the reimbursement paid according to the collective agreement is lower than the kilometre allowances set by the decision of the Tax Administration, so the reimbursement is tax-exempt. The number of kilometres does not need to be reported in connection with travel expense reimbursements in the construction sector.

312

Treatment fee for municipal veterinarian

The monetary amount of a calculated treatment fee confirmed annually by the municipality employing the veterinarian, used as the grounds for the determination of earnings-related pension, unemployment, and accident and occupational disease insurance contributions. The treatment fee for a municipal veterinarian is calculated income annually confirmed by a municipal body to the veterinarian and used as the basis of the pension. The employer's health insurance contribution is based on the actual income from the wages received by the veterinarian.

Pension security is covered by the confirmed treatment fee to the extent that the veterinarian's total wages are based on fees received from the owners of animals.

The municipal veterinarian's actual official salary is not included in the calculated income.

The treatment fees for a municipal veterinarian must be reported each pay period in connection with the payment of the wages for the position. Data on the wages and the fees are submitted on separate reports, because the grounds for employment registration are not the same. On one report, the imputed amount may not exceed 1/12 of the veterinarian's reporting-year-specific maximum amount of fees. The total amount of treatment fees for a calendar year may not exceed the maximum amount of the fee confirmed for the veterinarian by the employer. Because this is an imputed fee reported on a different report than the wages for the position, the employee contributions collected from said income and the taxes withheld from said income are reported in connection with the wages for the position.

The municipal veterinarian's calculated treatment fee and the actual treatment fee paid by users of the veterinarian's services are two different concepts. No pension insurance contributions are collected from the treatment fees paid by users of the veterinarian's services.

313

Compensation for use, earned income

Compensation paid for the assignation or right to use an industrial property right, or information on industrial, commercial or scientific experience.

Compensation for use can be paid to recipients regardless of whether or not they are registered in the prepayment register. Compensation for use is taxable income, and tax is withheld from this if the recipient is not registered in the prepayment register.

All compensation for use from which tax has been withheld must be reported using this income type. Compensation for use paid to natural persons must be reported, even if tax has not been withheld from it. Compensation for use paid to natural persons registered in the prepayment register must also be reported.

If compensation is paid for an employee invention, it must be reported using the income type Compensation for employee invention (326).

This income type is also used to report the compensation for use paid to a consortium, organisation or joint venture.

No social insurance contributions are paid on compensation for use.

314

Compensation for use, capital income

Compensation paid for the assignation or right to use a copyright, an industrial property right, or information on industrial, commercial or scientific experience.

If a copyright has been transferred as an inheritance or through a last will and testament, or acquired for a payment, compensation received from its use is deemed capital income for the person, in the form of income received from Finland, regardless of the prepayment register entry.

All compensation for use from which tax has been withheld is reported using this income type. Compensation for use paid to natural persons must be reported, even if tax has not been withheld from it. Compensation for use paid to natural persons registered in the prepayment register must also be reported.

No social insurance contributions are paid on compensation for use.

315

Other taxable benefit for employees

A non-monetary taxable benefit collectively granted by the employer to personnel. A benefit granted for voluntary exercise and culture exceeding the statutory maximum amount of EUR 400 is considered taxable benefit, for example.

If the benefit has been granted collectively to all personnel, it is not subject to social insurance contributions. By default, for this income type the benefit is not subject to social insurance contributions.

If the benefit has only been granted to some personnel, it is taxable in its entirety and subject to social insurance contributions. The payer then reports it by specifying insurance information in conjunction with the income type.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

316

Other taxable income deemed earned income

This income type is used to report the total amount of other payments constituting taxable earned income.

This income type is used to report taxable occasional remunerations and rewards when the recipient is not in an employment relationship with the payer and the payment is not compensation for work. These include, for example, a benefit granted to a member of a customer company's personnel (e.g. a trip, gift voucher or object), a finder's fee, a so-called vigilance fee paid by a bank, a prize from an art competition, and a competition prize worth over EUR 100 not based on an employment relationship.

In the case of a competition prize received for sports, the income is reported using income type: Non-wage compensation for work (336). Additionally, report Athlete as the type of additional income earner data if the recipient of the prize is not in an employment relationship.

This income type is also used to report telephone expenses and other corresponding taxable reimbursement of expenses paid to individuals participating in unpaid volunteer work for an entity promoting for the public good or a public sector payer.

For more information on reporting competition prizes, see the detailed guidance: Reporting data to the Incomes Register: rewarding employees, payments made to an entrepreneur and other special circumstances

Other taxable income deemed as earned income is subject to withholding but not to social insurance contributions. From the perspective of reporting, it does not matter whether or not tax could be withheld from the income.

Taxes need not be withheld from competition prizes if they cannot be deemed to be wages, non-wage compensation for work or compensation for use referred to in the tax prepayment act (ennakkoperintälaki 1118/1996) or athlete's fee.

317

Other fringe benefit

This income type is used to report non-monetary taxable benefits granted by the employer, such as the total amount of accommodation, telephone and meal benefits, unless these benefits have not been itemised in their own income types using complementary income types. Other benefits reported using this income type include garage, motorcycle and boat benefit, life and pension insurance premiums deemed as pay, benefit from a non-personalised gift voucher, and fringe benefits received by a person working as a seafarer.

If compensation for the benefit is collected from the income earner, the value of the fringe benefit is reported in full using this income type before the collected compensation is deducted. This means that the amount of a fringe benefit must be reported in full, even when the employee has paid or the employer otherwise collected a reimbursement for the fringe benefit equalling the monetary value of the fringe benefit, with no taxable benefit remaining. The reimbursement collected for a fringe benefit reduces the amount of taxable income and the amount of earnings from work on which the social insurance contributions are based.

Fringe benefits included in the paid amount must be reported in connection with the Other fringe benefit income type. Select from the following alternatives: accommodation benefit, telephone benefit, meal benefit, other benefits.

A meal benefit must be reported with its own income type (334) if the employer collects a reimbursement for the meal benefit from the employee matching its taxable value. In such a case, the meal benefit is not reported using the Other fringe benefit income type.

The taxable share of an employer-subsidised commuter ticket must be reported using its own income type (342), and it cannot be reported together with other fringe benefits under the Other fringe benefit income type. Correspondingly, a car benefit, bicycle benefit and interest benefit for a housing loan must be reported separately using their own income types (304, 364, 302).

If an accommodation benefit, a telephone benefit or a meal benefit is reported separately using their own income types (301, 330, 334), such benefits are not added to the income reported using the Other fringe benefit income type.

If the taxable value has not been separately confirmed in a decision issued by the Tax Administration, the value of the fringe benefit is its fair value. The benefit must be reported, even if the employee is not paid monetary wages at all, or the monetary wages are not sufficient for the payment of withholding tax in full.

Fringe benefits are subject to withholding and to social insurance contributions. If tax could not be withheld from the benefit due to the small amount of monetary wages, withholding is not reported if the payer has not actually withheld the tax.

If a payment reported using this income type differs from the default, the payer must report it by specifying insurance information in conjunction with the income type.

This situation occurs, for example, when the employer has paid an employee's pension or unemployment insurance contributions on the employee's behalf, in which case a fringe benefit is established for the income earner with regard to the contributions paid by the employer. However, the income is not deemed income from work on which the pension and unemployment insurance contributions are based. Even then, the benefit is subject to a health insurance contribution.

If the employer has paid the employee contributions on behalf of the employee, and the income has been reported on an earnings payment report as a fringe benefit using the Other fringe benefit income type, the payer can report the employee contributions it paid using income types Employee's earnings-related pension insurance contribution (413) and Employee's unemployment insurance contribution (414), and the payment is taken into account as a deduction in the employee's taxation.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

Detailed guidance on reporting fringe benefits: Reporting data to the Incomes Register: fringe benefits and reimbursements of expenses

319

Kinship carer's fee

Fee paid by the wellbeing services county to a kinship carer for arranging treatment and care for an elderly, disabled or ill person at home.

The kinship carer's fee is based on a commissioning contract between the wellbeing services county and the kinship carer, and its amount is determined by how binding and demanding the care is. A kinship carer who has made a kinship care agreement with a wellbeing services county must always be insured in accordance with the public sector pensions act (julkisten alojen eläkelaki 81/2016).

The kinship carer's fee is handled as non-wage compensation for work from which tax is withheld if the recipient of the fee is not registered in the prepayment register. The employee's pension insurance contributions collected from the kinship carer are also reported using income type Employee's pension insurance contribution (413).

A kinship carer's fee must always be reported, also when the payment recipient is registered in the prepayment register. In these situations, the payer does not report the collected employee's earnings-related pension insurance contribution to the Incomes Register, but the earnings-related pension provider's company ID and pension policy number must be entered into the earnings payment report.

An earnings-related pension insurance contribution is paid from the kinship carer's fee, but other social insurance contributions are not.

Under the Act on Support for Informal Care, the wellbeing services county must provide the carer with insurance coverage according to the Workers' Compensation Act.

320

Stock options and grants

Remuneration given in the form of the employer company shares.

The income type is used to only report such stock options and grants that are given in shares, i.e. other than money. If part of stock options and grants is given in money, the part must be reported using the income type Stock grant paid in money (367).

Tax is withheld from the remuneration, but no social insurance contributions are paid, if the employee has the possibility, based on an incentive system, to receive the employer company's listed shares (or those of another company in the same group, or a company in some other equivalent financial consortium) and the value of the benefit depends on the development of the value of the shares in question over a period of more than one year in length after the remuneration has been promised. Otherwise, the remuneration is income subject to social insurance contributions.

By default, this income type is subject to the pension insurance contribution but not to other social insurance contributions.

If a payment reported using this income type differs from the default, the payer must report it by specifying insurance information in conjunction with the income type.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

Detailed guidance on rewarding employees: Reporting data to the Incomes Register: rewarding employees, payments made to an entrepreneur and other special circumstances

321

Wages paid by substitute payer: employer pays for employer's social insurance contributions (earnings-related pension, health, unemployment, and accident and occupational disease insurance contributions)

The actual employer reports the total wages on which social insurance contributions are based, which the substitute payer has paid and for which the substitute payer has withheld tax.

For taxation purposes, the income does not count as income for the income earner on the basis of data provided by the actual employer; such data is required income-earner specifically, because the person accrues pension based on it.

This income type is also used when the actual employer pays the employer's social insurance contributions, based on wages paid as wage security.

Although the substitute payer has paid the wages to the income earner, the actual employer is responsible for paying the employer's social insurance contributions. For this reason, the actual employer must report the wages paid by the substitute payer income earner specifically, using the so-called info income types specifically intended for situations involving a substitute payer.

For its part, the substitute payer reports the information to the Incomes Register using other income types and the "Substitute payer – Yes" entry. Tax on the income is levied from the income earner, based on the information provided by the substitute payer. The contributions collected from the employee are levied and paid based on the wages paid by the substitute payer. As a rule, the substitute payer does not pay the employer's social insurance contributions; the actual employer is responsible for paying them.

Parties that can be substitute payers include enforcement agencies, Kela, wellbeing services counties, municipalities, Centres for Economic Development, Transport and the Environment, bankruptcy estates and guarantors.

This income type is subject to employer's social insurance contributions.

Detailed guidance on situations involving a substitute payer: Reporting data to the Incomes Register: payments made by substitute payer

322

Wages paid by substitute payer: employer pays for employer's earnings-related pension insurance contribution

The actual employer reports the total wages on which pension insurance contributions are based and that the substitute payer has paid and for which the substitute payer has withheld tax, but the employer is responsible for the related pension insurance contribution.

This income type is also used when the actual employer pays the employer's pension insurance contribution based on wages paid as wage security.

Parties that can be substitute payers include enforcement agencies, Kela, wellbeing services counties, municipalities, Centres for Economic Development, Transport and the Environment, bankruptcy estates and guarantors.

This income type is used only when the paid income has been subject solely to the pension insurance contribution.

323

Wages paid by substitute payer: employer pays for employer's unemployment insurance contribution

The actual employer reports the total wages on which unemployment insurance contributions are based, which the substitute payer has paid and for which the substitute payer has withheld tax, but the employer is responsible for the unemployment insurance contribution.

This income type is also used when the actual employer pays the employer's unemployment insurance contribution based on wages paid as wage security.

Parties that can be substitute payers include enforcement agencies, Kela, wellbeing services counties, municipalities, Centres for Economic Development, Transport and the Environment, bankruptcy estates and guarantors.

This income type is used only when the paid income has been subject solely to the unemployment insurance contribution.

324

Wages paid by substitute payer, employer pays for accident and occupational disease insurance contribution

The actual employer reports the total wages on which accident and occupational disease insurance contributions are based, which the substitute payer has paid and for which the substitute payer has withheld tax, but the employer is responsible for the accident and occupational disease insurance contribution.

This income type is also used when the actual employer pays the accident and occupational disease insurance contribution based on wages paid as wage security.

Parties that can be substitute payers include enforcement agencies, Kela, wellbeing services counties, municipalities, Centres for Economic Development, Transport and the Environment, bankruptcy estates and guarantors.

This income type is used only when the paid income has been subject solely to the accident and occupational disease insurance contribution.

325

Wages paid by substitute payer, employer pays for employer's health insurance contribution

The actual employer reports the total wages on which health insurance contributions are based and that the substitute payer has paid and for which the substitute payer has withheld tax, but the employer is responsible for the employer's health insurance contribution.

This income type is also used when the actual employer pays the employer's health insurance contribution based on wages paid as wage security.

Parties that can be substitute payers include enforcement agencies, Kela, wellbeing services counties, municipalities, Centres for Economic Development, Transport and the Environment, bankruptcy estates and guarantors.

This income type is used only when the paid income has been subject solely to the health insurance contribution.

326

Compensation for employee invention

Compensation paid for an employee invention.

If the duties of the employee who receives the fee do not include inventions, compensation for the employee invention is handled as compensation for use, i.e., no social insurance contributions are paid from the compensation. In such a situation, tax is withheld from the compensation for the employee invention, unless the recipient of the compensation is registered in the prepayment register.

If the income earner's duties agreed in the employment contract include inventions, the compensation is treated as wages, i.e., in addition to tax being withheld, in addition to which social insurance contributions are paid from the compensation.

By default, this income type is not subject to social insurance contributions.

If a payment reported using this income type differs from the default, the payer must report it by specifying insurance information in conjunction with the income type.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

327

Reimbursement of private caretaker's expenses

Taxable reimbursement of expenses paid to a private caretaker for expenses incurred from the care and upkeep of foster home care patients.

Reimbursement of a private caretaker's expenses is based on a commissioning contract between the wellbeing services county and the private caretaker.

Such reimbursement covers items such as meal, accommodation and health care expenses, as well as start-up expenses.

The reimbursement of a private caretaker's expenses, paid together with the private caretaker's fee, is handled as taxable compensation for work. In taxation, an amount equal to the reported reimbursement of expenses is deducted without a separate request. If the income earner has incurred more expenses than those reimbursed, in its taxation it must include an account of all expenses incurred from foster home care.

This income type is also used to report the reimbursement of expenses paid to a support family.

Tax is withheld but social insurance payments are not paid from the reimbursements of expenses.

Reimbursement of travel expenses paid separately against a travel invoice is not reported using this income type. The reimbursement of travel expenses is added to the amount of the fee and reported using income type Private caretaker's fee (328).

328

Private caretaker's fee

A fee paid by the wellbeing services county to a private caretaker for arranging treatment, upbringing or other around-the-clock care in the caretaker's private home or in the home of the person cared for.

The private caretaker's fee is based on a commissioning contract between the wellbeing services county and the private caretaker. An earnings-related pension insurance contribution is paid from the private caretaker's fee, but no other social insurance contributions are paid.

However, the wellbeing services county must insure the carer for accidents in such work. Provisions on a private caretaker's accident insurance are laid down in the separate legislation on private caretakers.

This income type is used to report a fee paid to a commissioned private caretaker if the person is not registered in the prepayment register. The employee's earnings-related pension insurance contributions collected from the private caretaker (payer subject to the public sector pensions act (julkisten alojen eläkelaki 81/2016)) are then reported using income type Employee's pension insurance contribution (413).

The fee is also reported in those situations in which the income earner is a natural person who is registered with the prepayment register, and the payer is an employer covered by the public sector pensions act (julkisten alojen eläkelaki 81/2016), but the income earner does not have insurance under the self-employed persons' pensions act (yrittäjän eläkelaki 1272/2006). In these situations, the payer does not report the collected employee's earnings-related pension insurance contribution to the Incomes Register, but the earnings-related pension provider's company ID and pension policy number must be entered into the report.

If, in connection with the private caretaker's fee, a payer covered by the public sector pensions act separately pays reimbursements of travel expenses against a travel invoice to a natural person who does not have an insurance under the self-employed persons' pensions act, the payer must report the reimbursement of travel expenses on a separate earnings payment report using income type Private caretaker's fee (328) if the recipient is not registered in the prepayment register. In such a case, the earnings-related pension provider's company ID and pension policy number are not entered on the report containing the reimbursements of expenses. The share of reimbursement of expenses does not need to be reported if the recipient is registered in the prepayment register.

This income type is also used to report a fee paid to a support family as well as separately paid reimbursements of travel expenses.

The private caretaker's fee is handled as non-wage compensation for work from which tax is withheld, if the recipient of the fee is not registered in the prepayment register.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

329

Reimbursement of family day care provider's expenses

Taxable reimbursement of expenses, paid to a family day care provider to cover the direct expenses incurred from childminding.

Reimbursed expenses include, for example, expenses incurred from meals. Each year, the Association of Finnish Local and Regional Authorities issues a recommendation on the reimbursement of family day care providers' expenses to municipalities.

Tax is not withheld and neither are social insurance payments paid from the reimbursements of expenses.

330

Telephone benefit

A fringe benefit which is established when the employer pays the costs of the telephone subscription it has acquired and paid for an employee, even for the employee’s private use outside working hours.

A telephone benefit can be reported separately, but the received benefit must at least be reported as a total sum, using the income type Other fringe benefit (317). In such a case, the additional Type of benefit data related to the income type must also be used to report that the income reported using the Other fringe benefit includes a telephone benefit. 

If the telephone benefit is reported separately, it should not be added to the income reported using the income type Other fringe benefit.

The amount of the telephone benefit must be reported in full, even when the employee has paid a reimbursement for the benefit to the employer equalling the monetary value of the telephone benefit, with no taxable benefit remaining. 

Tax is withheld and social insurance contributions are paid from the telephone benefit.

331

Daily allowance

A daily allowance is a tax-exempt reimbursement of a reasonable increase in meal and other living costs incurred by the recipient due to a business trip.

Enter the total amount of tax-exempt daily allowances and meal allowances here.Income reported using the Daily allowance income type can be

• meal allowance,
• domestic full daily allowance,
• domestic partial daily allowance,
• international daily allowance, or
• tax-exempt reimbursements of expenses related to work abroad.

If reimbursements of expenses related to work abroad have been entered as the type of the daily allowance, enter the following tax-exempt benefits received by the income earner related to work abroad in this section:

• the moving and travel costs of the taxpayer and their family member to the country of work and back;
• regular private household staff abroad, paid for by the employer; and
• primary and secondary education for children, paid for by the employer.

This income type is not used to report night travel allowance or border-crossing allowance. These items are not reported to the Incomes Register.

Enter only the total amount of tax-exempt daily allowances and meal allowances here. Each year, the Tax Administration will confirm the tax-exempt amounts in the decision it issues on tax-exempt reimbursements of travel expenses.

Meal allowances are entered here only if their own, separate income type Meal allowance (303) was not used for their reporting.

If the daily allowances or other allowances mentioned here have been paid on more lenient grounds than the decision by the Tax Administration, the compensation is reported using the income type Total wages (101) or Other compensation (216), in which case it is also subject to social insurance contributions.

If compensation paid on more lenient grounds has been agreed in a collective agreement, it is not subject to pension, unemployment or accident and occupational disease insurance contributions. In such cases, the payer reports the income using the income type Total wages (101) or Other compensation (216), while also reporting what part of the payment is subject to earnings-related pension, unemployment, accident, and occupational disease insurance contributions.

Additional information on the different daily allowances the total amount includes must be provided in connection with the income type.

Daily allowances are not subject to social insurance contributions.

332

Capital income payment

A payment that is capital income for its recipient. For example, interest paid to an employee or a shareholder, such as interest on late payment of wages receivable or a guarantee commission that is capital income.

Payments are subject to withholding but not to social insurance contributions. Late-payment interest has been exempted from withholding by the Finnish Tax Administration's decision VH/2593/00.01.00/2019).

334

Meal benefit

A fringe benefit established when an employer offers meals to its employee. An employer can subsidise meal costs with a meal ticket or other, similar targeted means of payment, or by arranging catering.

The taxable value of a meal benefit is determined as an annually confirmed value in accordance with the decision by the Tax Administration.

A meal benefit can be reported separately, but the received benefit must be reported as at least a total sum using the income type Other fringe benefit (317). In such a case, the Type of benefit additional data related to the income type must be used to report that the income reported using the Other fringe benefit includes a meal benefit.

If the meal benefit is reported separately, it should not be added to the income reported using the income type Other fringe benefit (317).

If the employer collects from the employee a reimbursement for the meal benefit, corresponding to its taxable value, the information is reported to the Incomes Register as Reimbursement for a meal benefit corresponds to taxable value: Yes. In this case, the amount of meal benefit is not reported. If a reimbursement equalling the taxable value of the meal benefit is collected from the employee, the income type Other fringe benefit (317) must not be used. 

Tax is withheld and social insurance contributions are paid from a meal benefit.

335

Reimbursement of costs, paid to conciliator

Taxable reimbursement of costs paid to a voluntary conciliator to cover the costs incurred from the conciliation process.

Conciliator's reimbursement of costs is taxable earned income that is taken into consideration as an equal-amount deduction in the recipient's taxation, without a separate account being made by the recipient.

No tax is withheld or social insurance contributions are paid from the reimbursement of expenses.

336

Non-wage compensation for work

Remuneration paid or agreed to be paid for work performed in a non-employment relationship, from which tax must be withheld if the recipient is not registered in the prepayment register, but from which social insurance contributions are not paid as a rule.

Non-wage compensation for work can be paid to recipients regardless of whether or not they are registered in the prepayment register. Non-wage compensation for work is taxable income, and tax is withheld from it if the recipient is not registered in the prepayment register. . Compensation paid to a support person is an example of non-wage compensation for work. Compensation paid to a support family is reported using income type Private caretaker's fee (328). Non-wage compensation for work is commonly called a fee.

Non-wage compensation for work must be reported if the income earner is not registered in the prepayment register.

Because a report must be submitted always when the income earner is not registered in the prepayment register, the recipient may also be other than a natural person, such as an association, limited liability company, general partnership or limited partnership.

A report must also be submitted for the non-wage compensation for work when the payer is covered by the public sector pensions act (julkisten alojen eläkelaki 81/2016), and the income earner is a natural person who is registered in the prepayment register but does not have insurance under the self-employed persons' pensions act (yrittäjän eläkelaki 1272/2006).

Non-wage compensation for work paid to a company with a limited tax liability must be reported, if the payer has collected tax at source from the company. Non-wage compensation for work paid to a natural person with a limited tax liability must always be reported regardless of whether or not tax at source has been collected. For example, a fee paid to an athlete or artist who is a non-resident taxpayer must always be reported.

As a rule, no social insurance contributions are paid from non-wage compensation for work. An employer subject to public sector pension legislation pays earnings-related pension insurance contributions based on a private person's commissioning contract, if the commissioned person is not self-employed, i.e., does not have insurance in accordance with the Self-Employed Persons' Pensions Act. Furthermore, the income earner pays the employee's daily allowance contribution of health insurance from non-wage compensation for work. By default, this income type is not subject to social insurance contributions.

If a payment reported using this income type differs from the default, the payer must report it by specifying insurance information in conjunction with the income type.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

Reimbursement of expenses related to non-wage compensation for work

If the fee or other remuneration has been paid as non-wage compensation for work, the recipient cannot be paid reimbursements of expenses that would be included in tax-exempt expenses.

Reimbursements of expenses related to non-wage compensation for work are added to the amount of income as a lump sum with the other remuneration. Reimbursements of expenses paid in connection with non-wage compensation for work are not tax-exempt. If a taxable kilometre allowance is paid to a commissioned person or organisation, the allowance is reported as non-wage compensation for work, and the income type Kilometre allowance (taxable) may not be used.

If, in connection with non-wage compensation for work, a payer covered by the public sector pensions act pays reimbursements of expenses to a natural person who does not have an insurance under self-employed persons’ pensions acts, the payer must report the reimbursement of expenses, in addition to the fee, on a separate earnings payment report using income type "Non-wage compensation for work" if the recipient is not registered in the prepayment register. In this case, the fee reported as non-wage compensation for work and the reimbursements of expenses can be reported on a single report, but the share of the fee must be itemised separately on the report and the income type must include the type of insurance information “Subject to pension insurance contribution: Yes'. The share of reimbursement of expenses does not need to be reported if the recipient is registered in the prepayment register.

A recipient of non-wage compensation for work can request that travel expenses be deducted on the pre-completed tax return form. However, business operators must deduct travel expenses in their accounting.

Before tax is withheld, reimbursements of expenses incurred from work cannot, in general, be deducted from non-wage compensation for work. The only exception is the reimbursement of travel expenses paid to natural persons, from which tax does not need to be withheld if the grounds and amounts of the travel expenses are in accordance with the tax-exempt allowances for business travel laid down in the annual decision issued by the Tax Administration. These allowances are not tax-exempt either, so they are reported in the total amount of the non-wage compensation for work.

337

Supplementary daily allowance paid by employer-specific health insurance fund

Sick pay paid to the employee by a health insurance fund in accordance with the public insurance funds act (vakuutuskassalaki 1164/1992).

Income paid by the health insurance fund corresponds to the sick pay paid by the employer and is thus subject to social insurance contributions. Such income is also subject to withholding.

338

Pension paid by employer

Pension paid by an employer to a former employee or their beneficiary on the basis of a previous employment relationship.

Such income is subject to withholding. No social insurance contributions are paid from the pension paid by an employer.

339

Dividends/profit surplus based on work effort (wages)

Dividends paid to a shareholder as wages, the distribution basis of which is the work effort of the recipient of the dividends or of a person in their sphere of interest.

Tax is withheld from dividends based on work effort. Dividends paid to a company shareholder are subject to social insurance contributions. The amount of the dividends acts as the basis of the employee's daily allowance contribution of health insurance.

340

Dividends/profit surplus (wages) based on work effort (non-wage)

Dividends paid to a shareholder as non-wage compensation for work, the distribution basis of which is the work effort of the recipient of the dividends or a person in their sphere of interest.

A report must be submitted for dividends/profit surplus based on work effort taxed as non-wage compensation for work, even when the recipient is registered in the prepayment register.

Tax is withheld from the dividends based on work effort (non-wage), unless the recipient is registered in the prepayment register. No social insurance contributions are paid from the payment. However, the income is subject to the employee's daily allowance contribution of health insurance.

341

Employer-subsidised commuter ticket, tax-exempt share

This income type is used to report the tax-exempt share of a personal public transport ticket paid for an employee by an employer.

Part of the value of the employer-subsidised commuter ticket is tax-exempt and part is taxable. The taxable share of the employer-subsidised commuter ticket is a fringe benefit. A personal public transport ticket with a value of no more than EUR 3400, provided by the employer to the employee for commuting between the employee's residence and place of work, is tax-exempt income. If an employee has both an employer-subsidised commuter ticket and a bicycle benefit, their total tax-exempt amount can be at most EUR 3,400.

If a tax-exempt employer-subsidised commuter ticket benefit is provided by deducting the benefit from the employee’s monetary wages, the earnings-related pension and unemployment insurance contributions and the accident and occupational disease insurance contributions are calculated based on the amount of the wages before the value of the fringe benefit is deducted.

A report must always be submitted for an employer-subsidised commuter ticket, including when there is no taxable benefit or deductible amount.

If the income earner buys the ticket themselves, and the employer pays the price of the ticket or part of it to the employee, the entirety of the compensation paid by the employer is considered to be the employee's wages. In such a case, the price of the ticket paid to the employee is reported as wages only. 

The employer-subsidised commuter ticket must be reported as income for the pay period in which the benefit was handled in the payroll accounting for the employee. If a tax-exempt employer-subsidised commuter ticket benefit is not handled in the payroll system at all, the tax-exempt employer-subsidised commuter ticket benefit can be reported once a year. However, the recommendation is that the benefit is reported in the report for the month in which it was given.

In the case of employer-subsidised commuter tickets, the amounts of taxable and tax-exempt benefit are estimated on an annual level unlike with other fringe benefits, which are valuated on a monthly level as a rule. If an employer-subsidised commuter ticket is granted once per year, for example at the start of the year, and a reimbursement is collected regularly throughout the entire year, the person would, in practice, incur a taxable benefit at the start of the year, as the payer has not yet had time to collect more than the first month's reimbursement for the benefit. So that the payer does not need to correct submitted reports in a situation described above, the payer can anticipate the situation in advance and divide the tax-exempt share over the entire year, reporting it monthly to the Incomes Register together with the collected reimbursement.

If an employer-subsidised commuter ticket is given at the beginning of the year for the entire year and the employment relationship ends during the year, the payer must correct the previously submitted reports. In this case, only the share allocated to the employment period is an employer-subsidised commuter ticket benefit. The payer must enter the share of the ticket not based on an employment relationship as wages, unless a reimbursement is collected for the ticket from the income earner.

No tax is withheld or social insurance contributions are paid from the tax-exempt share.

If the tax-exempt share of the employer-subsidised commuter ticket benefit is subject to a social insurance contribution, the payer must use the separate Type of insurance information entry to report that the income is subject to the specified insurance contribution. This applies, for example, when an employer provides a benefit by deducting it from the employee’s monetary wages.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

Detailed guidance on reporting fringe benefits: Reporting data to the Incomes Register: fringe benefits and reimbursements of expenses

342

Employer-subsidised commuter ticket, taxable share

This income type is used to report the taxable share of a personal public transport ticket paid for an employee by an employer and deemed to be wages.

Part of the value of the employer-subsidised commuter ticket is tax-exempt and part is taxable. The taxable share of the employer-subsidised commuter ticket is a fringe benefit. A personal public transport ticket with a value of no more than EUR 3400, provided by the employer to the employee for commuting between the employee's residence and place of work, is tax-exempt income. If an employee has both an employer-subsidised commuter ticket and a bicycle benefit, their total tax-exempt amount can be at most EUR 3,400. Any share in excess of this amount is a taxable fringe benefit deemed to be wages. A report must always be submitted for an employer-subsidised commuter ticket, including when there is no taxable benefit.

Employer-subsidised commuter ticket benefits must be reported as income for the pay period in which the benefit was handled in the payroll accounting for the employee. The taxable and tax-exempt shares of an employer-subsidised commuter ticket must be itemised, because they affect the deductibility of the employee's travel expenses between home and work.

The reporting of an employer-subsidised commuter ticket differs from other fringe benefits, similarly to the reporting of a bicycle benefit, because the payer must deduct the reimbursement collected from the employee from the share deemed to be wages. The share of the benefit value from which the employer has already deducted a reimbursement it has possibly collected from the income earner is reported as the share deemed to be wages.

If the income earner buys the ticket themselves, and the employer pays the price of the ticket or part of it to the employee, the entirety of the compensation paid by the employer is considered to be the employee's wages. In such a case, the price of the ticket paid to the employee is reported as wages only.

The bicycle benefit reduces the maximum tax-exempt amount of an employer-subsidised commuter ticket. If an employee has both an employer-subsidised commuter ticket and a bicycle benefit, their total tax-exempt amount can be at most EUR 3,400.

The taxable share of an employer-subsidised commuter ticket, deemed to be wages, must only be reported using its own income type. It cannot be reported together with other fringe benefits using the income type of Other fringe benefit (317).

The share regarded as wages is subject to withholding and social insurance contributions.

Detailed guidance on reporting fringe benefits: Reporting data to the Incomes Register: fringe benefits and reimbursements of expenses

343

Employee stock option

Remuneration given in the form of the employer company's stock option.

The income type is used to only report such an employee stock option that is given in shares, i.e. other than money. If part of the option is given in money, the part must be reported using the income type Employee stock option paid in money (368).

If the option is undervalued and it is exercised before a year has elapsed from its issuance, the amount of the benefit received from it must also be reported using the income type Employee stock option with a subscription price lower than the market price at the time of issue (361).

Tax is withheld from the benefit received from the employee stock option. The employee stock option is subject to income taxation when the option is exercised. No social insurance contributions are collected from an employee stock option when it is exercised.

Even if the subscription price was significantly lower than the fair value, but the employee stock option is only exercised more than one year after its issuance, the payment is not deemed to be earnings from work on which social insurance contributions are based. A stock option exercised after more than one year is reported using income type Employee stock option.

Detailed guidance on rewarding employees: Reporting data to the Incomes Register: rewarding employees, payments made to an entrepreneur and other special circumstances

350

Wages transferred to athletes' special fund

Transfer of income from sports to an athletes' special fund for the deferral of income. An athlete is entitled to transfer some of their income from sports to an athletes' special fund. Such funding is agreed between the athlete, employer and, possibly, the sponsor.

Income from sports can comprise the athlete's wages or fees. This income type is used only to report the wages transferred to the fund. The transfer to the athletes' special fund is intended to secure the athlete's post-career livelihood.

The employer's health insurance contribution is paid from the wages of the athlete that are transferred to the fund. The athlete does not pay tax for the income until the income is paid out from the fund. Tax is not withheld from the funded wages and the health insurance daily allowance contribution paid until the wages are paid to the athlete from the fund.

The funding of income from sports does not affect the payment of the insurance premiums specified in the act on accident and pension provision for athletes (laki urheilijan tapaturma- ja eläketurvasta 276/2009).

351

Wages paid from athletes' special fund

Withdrawal of sports income from the athletes' special fund for the athlete. The fund withholds tax from the athlete's wages and fees withdrawn from the athletes' special fund when the athlete makes a withdrawal.

Items withdrawn from the fund must be itemised into wages and fees, because they are subject to different deductions in taxation. This income type is used only to report wages paid from the fund. An athlete's fee paid from the fund is reported as non-wage compensation for work. Furthermore, “Athlete” is specified as the value for the Type of additional income earner data.

Tax is withheld from the funded wages and the employee's health insurance daily allowance contribution is paid when wages are paid to the athlete from the fund. The employer's health insurance contribution is paid when the income is transferred to the athletes' special fund.

352

Wages for insurance purposes

Calculated wages that would have to be paid, if work corresponding to work performed abroad were to be performed in Finland. Wages for insurance purposes for work abroad is used as the basis of the determination of contributions and benefits in social insurance, instead of actual wages.

Different actors have different rules on when wages for insurance purposes are used to determine contributions and benefits, and when actual wages paid are used instead.

More detailed instructions available in the application instructions of the Finnish Centre for Pensions: Wages for insurance purposes as earnings from work on which pension is based (available in Finnish and Swedish, link to Finnish)

By default, this income type is subject to social insurance contributions.

If a payment reported using this income type differs from the default, the payer must report it by specifying insurance information in conjunction with the income type.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

353

Taxable reimbursement of expenses

Taxable reimbursement of expenses means the taxable reimbursement of expenses incurred by a person in the performance of their work. This income type is used to report the total amount of taxable reimbursements of expenses that are not itemised using other income types.

Use this income type to report only reimbursements of expenses directly incurred by the income earner in the performance of their work, when the employer has not included these reimbursements in the amount of wages when withholding taxes (section 15 of the tax prepayment act (ennakkoperintälaki 1118/1996)). This income type is also used to report the corresponding reimbursement of expenses paid to an athlete.

The employer can reimburse the income earner for expenses directly incurred in the performance of work. Such expenses include expenses incurred in the acquisition of tools and materials, supplies and protective clothing. In the construction industry, for instance, a tool allowance based on a collective agreement is paid.

The employer does not withhold tax or pay social insurance contributions from taxable reimbursements of expenses.

However, reimbursements are taxable income for the income earner. The income earner must request the deduction of the actual expenses on their pre-completed tax return form.

If an employee has acquired tools and work materials on behalf of the employer, their expenses are not reported if the employer has reimbursed the employee for them against a receipt.

354

Private day care allowance municipal supplement

A municipality-specific part of private day care allowance. The municipality decides on the payment and amount of the municipal supplement.

Kela and the municipality may agree on the payment of the municipal supplement via Kela. The private day care allowance municipal supplement is granted to the guardian of a child, but the allowance is paid to the nanny hired by the family or a private early childhood education provider, and tax is withheld from it in accordance with a decision by the Tax Administration.

The municipality and Kela report the municipal supplement they have paid as a substitute payer, using this income type. The municipality and Kela do not pay social insurance contributions from the supplement when paying the private day care allowance municipal supplement.

The family is responsible for employer obligations and social insurance contributions for a nanny in an employment relationship, including with regard to the municipal supplement. The family must report the municipal supplement received by a nanny in an employment relationship using the income type Wages paid by substitute payer, from which the employer pays social insurance contributions (321). The family's employer contributions are determined based on the income type in question.

If the private day care allowance paid was non-wage compensation for work, the municipal supplement is also non-wage compensation for work. In such a case, Kela or the municipality reports the municipal supplement paid using the income type ‘Private day care allowance municipal supplement’ if the income earner is not registered in the prepayment register.

355

Private day care allowance (wages)

Day care allowance paid to a nanny hired by a family or a private early childhood education provider, if a child is being cared for who is under school age, is not being provided with early childhood education by the municipality, and for whom no municipal place in early childhood education has been reserved.

Kela grants the private day care allowance to the guardian of the child, but the allowance is paid to the nanny hired by the family or a private early childhood education provider, and tax is withheld from it in accordance with a decision by the Tax Administration.

As a substitute payer, Kela reports with the income type in question the information on the wages it has paid to the nanny in an employment relationship with the family. In the case of private day care allowance, Kela acts as a substitute payer and does not pay social insurance contributions from the private day care allowance.

The family is responsible for the employer obligations and social insurance contributions for a nanny in an employment relationship, including with regard to the private day care allowance. The family must report the private day care allowance (wages) received by a nanny in an employment relationship using the income type Wages paid by substitute payer, from which the employer pays social insurance contributions (321). The family's employer contributions are determined based on the income type in question.

If the family pays other income to the nanny, any other payments made by the family to the income earner during the month in question may be declared using the same report that is used for reporting wages paid by a substitute payer.

Detailed guidance on situations involving a substitute payer: Reporting data to the Incomes Register: payments made by substitute payer

356

Private day care allowance (non-wage)

Allowance paid to a nanny engaged by a family or a private early childhood education provider, if a child is being cared for who is under school age, is not being provided with early childhood education by the municipality, and for whom no municipal place in early childhood education has been reserved. Kela reports the income it has paid under the income type in question if the income earner is not registered in the prepayment register.

Non-wage compensation for work is paid for work that is not performed in an employment relationship. Tax must be withheld from the compensation, if the recipient is not registered in the prepayment register.

No social insurance contributions are paid from the non-wage compensation for work. The income earner pays the employee's daily allowance contribution of health insurance from the non-wage compensation for work.

357

Kilometre allowance paid by non-profit organisation

A kilometre allowance paid by a non-profit or public sector organisation to a person participating in voluntary work for no remuneration.

As of 2019, this income type is also used when a public sector payer (such as the state, a municipality or a parish) pays kilometre allowances to a person participating in volunteer work.

Travel for the benefit of and commissioned by a non-profit or public sector organisation is equivalent to business travel, even when the recipient of the allowance is not in an employment relationship with the payer or otherwise receives wages for the work to which the travel is related.

This income type is only used to report the reimbursements paid to persons participating in volunteer work. If the tax-exempt reimbursements are connected to the wages paid by the organisation, they are reported using income-type Kilometre allowance (tax-exempt) (311).

This income type is used to report only the tax-exempt kilometre allowances defined in section 71(3) of the income tax act (tuloverolaki 1535/1992). According to the related legal provision, the following is tax-exempt income from a reimbursement of travel expenses paid by a non-profit or public sector organisation:

• reimbursement of travel expenses that can also be paid for a trip made from the taxpayer's residence. A maximum of EUR 3,000 per calendar year of the reimbursement of travel expenses using means other than public transport is tax-exempt.

This income type is used to report only the tax-exempt amounts. If a non-profit or public sector organisation pays more kilometre allowances than stipulated in section 71 (3) of the income tax act (tuloverolaki 1535/1992), the extraneous part is reported as non-wage compensation for work.

In certain cases, the payer can increase the kilometre allowance paid for the use of a private car. The grounds for the increase are laid down in section 9(1) of the Tax Administration's decision on expenses. This income type is used to report the total amount of the payment, including the increases.

Tax-exempt reimbursements of travel expenses can be paid to recipients of an athlete's or competition judge's fees based on the above-mentioned grounds and limitations, even if they also receive a separate fee as a non-wage compensation for work. The competition or event must be related to the activities of the non-profit organisation. The tax-exempt kilometre allowances paid are reported using income type Kilometre allowance paid by non-profit organisation (357). The taxable amount exceeding the tax-exempt kilometre allowance is reported to the Incomes Register as non-wage compensation for work using income type Non-wage compensation for work (336).

No social insurance contributions are paid from the allowance.

358

Daily allowance paid by non-profit organisation

A daily allowance for business travel paid by a non-profit or public sector organisation to a person participating in voluntary work for no remuneration.

As of 2019, this income type is also used when a public sector payer (such as the state, a municipality or a parish) pays daily allowances to a person participating in volunteer work.

This income type is only used to report the daily allowances paid to persons participating in volunteer work. If the tax-exempt daily allowance is connected to the wages paid by the organisation, it is reported using income type Daily allowance (331).

In this section, report only the tax-exempt allowances defined in section 71(3) of the income tax act (tuloverolaki 1535/1992).

According to the legal provision, the following is tax-exempt income from a reimbursement of travel expenses paid by a non-profit or public sector organisation:

• daily allowance for no more than 20 days per calendar year
• accommodation allowance.

This income type is used to report only the tax-exempt amounts. If a non-profit or public sector organisation pays more daily allowances than stipulated in section 71(3) of the income tax act (tuloverolaki 1535/1992), the extraneous part is reported as non-wage compensation for work.

Tax-exempt reimbursements of travel expenses can be paid to recipients of an athlete's or competition judge's fees based on the above-mentioned grounds and limitations, even if they also receive a separate fee as a non-wage compensation for work. The competition or event must be related to the activities of the non-profit organisation. The tax-exempt daily allowances paid are reported using income type Daily allowance paid by non-profit organisation (358). The taxable amount exceeding the tax-exempt daily allowance is reported to the Incomes Register as non-wage compensation for work using income type Non-wage compensation for work (336).

No social insurance contributions are paid from the daily allowance.

359

Unjust enrichment

Mistakenly paid payment or benefit to which the income earner is not entitled. An unjust enrichment occurs when, for example, a payment has been made on incorrect grounds, to the wrong person, or in an incorrect amount.

The separate Unjust enrichment 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. If the unjust enrichment was previously incorrectly reported to the Incomes Register as some other income, for example by using the income type Total wages (101), the data must be corrected using the same income type (101) and the separate Unjust enrichment data provided in connection with it.

No social insurance contributions are paid from an unjust enrichment.

361

Employee stock option, the subscription price of which is lower than market price at the time of disposal

Remuneration that is given in the form of the employer company’s stock option and where the subscription price of the option charged from the employee is clearly lower that the market price of the share on the option issuance date.

An undervalued employee stock option is only deemed to be earnings from work on which social insurance contributions are based when the option is exercised within one year after the issuance of the employee stock option. In these situations, the benefit granted is reported to the Incomes Register using income type Employee stock option with a subscription price lower than market price at the time of issue. This situation concerns employee stock option benefits in which both the granting and exercise of the stock option take place while the new provision is in effect, i.e. on 1 January 2021 or later.

The difference between the subscription price and the market price on the option issuance date must be reported as the benefit value. The amount of the benefit generated from an undervalued employee stock option is estimated on the option right’s issuance date, but it must be reported to the Incomes Register when the option is exercised.

The income is subject to social insurance contributions. No tax is withheld from the income.

When the option is exercised, the benefit obtained from exercising it must be reported using the income type Employee stock option (343).

362

Royalty paid to a non-resident taxpayer

Compensation paid to a person or an organisation that is a non-resident taxpayer for the use of or right to use a copyright, an industrial property right or other right, or for information on industrial, commercial or scientific experiences.

The royalty can be based on

• the copyright of a literary, artistic or scientific work;
• the right to a photograph;
• the use or right to use a patent, a trademark, model, form, drawing, secret formula or manufacturing method; or
• information on industrial, commercial or scientific experience.

Tax at source is collected from the royalty, unless tax at source has been waived for the income by a tax treaty. The royalty must be reported to the Incomes Register even if no tax at source has been collected from it.

Royalties are not subject to social insurance contributions.

363

Tax-exempt share of bicycle benefit

This income type is used to report the tax-exempt share of a bicycle benefit granted for an employee by an employer and deemed to be wages. A bicycle benefit is created when an employer gives a bicycle they own or control to an employee for private use or otherwise provides an employee with an opportunity to use a bicycle outside working hours.

A bicycle benefit is tax-exempt if the value of the benefit is at most EUR 1,200 per year. Any share in excess of this amount is a taxable fringe benefit. If an employee has both a bicycle benefit and an employer-subsidised commuter ticket, their total tax-exempt amount can be at most EUR 3,400.

If a tax-exempt bicycle benefit is provided by deducting the benefit from the employee’s monetary wages, the earnings-related pension and unemployment insurance contributions and the accident and occupational disease insurance contributions are calculated based on the amount of the wages before the value of the fringe benefit is deducted.

A report must always be submitted for a bicycle benefit, even when there is no taxable benefit.

The taxable and tax-exempt amounts of a bicycle benefit are assessed at an annual level. For the calculation of the benefit amount, see the Tax Administration Guidelines Fringe benefits in taxation.

A tax-exempt bicycle benefit must be reported as income for the pay period in which the benefit was handled in the payroll accounting for the employee. If a tax-exempt bicycle benefit is not handled in the payroll system at all, the tax-exempt bicycle benefit can only be reported once a year. However, the recommendation is that the benefit is reported in the report for the month in which it was given.

No tax is withheld or social insurance contributions are paid from the tax-exempt share.

If the tax-exempt share of the bicycle benefit is subject to a social insurance contribution, the payer must report it by specifying insurance information in conjunction with the income type. This applies, for example, when an employer provides a benefit by deducting it from the employee’s monetary wages.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

Detailed guidance on reporting fringe benefits: Reporting data to the Incomes Register: fringe benefits and reimbursements of expenses

364

Bicycle benefit, taxable share

This income type is used to report the taxable share of a bicycle benefit granted to an employee by an employer and deemed to be wages. A bicycle benefit is created when an employer gives a bicycle they own or control to an employee for private use or otherwise provides an employee with an opportunity to use a bicycle outside working hours.

EUR 1,200 of the bicycle benefit is tax-exempt and any amount in excess of this limit is a taxable fringe benefit. For the calculation of the benefit amount, see the Tax Administration Guidelines Fringe benefits in taxation

The taxable share of a bicycle benefit regarded as wages must be reported over the months, during which the employee had access to the benefit.

The taxable and tax-exempt shares of a bicycle benefit must be itemised, because they affect the deductibility of the employee’s travel expenses between home and work.

The reporting of a bicycle benefit differs from other fringe benefits, similarly to the reporting of an employer-subsidised commuter ticket, because the payer must deduct the reimbursement collected from the employee from the share deemed to be wages. The share of the benefit value from which the employer has already deducted a reimbursement it has possibly collected from the income earner is reported as the share deemed to be wages.

The taxable share of the bicycle benefit, deemed to be wages, must only be reported using its own income type. It cannot be reported together with other fringe benefits using the income type of Other fringe benefit (317).

The share regarded as wages is subject to withholding and social insurance contributions.

365

Conditional stock options and grants

A stock option which involves a share assignment restriction and a conditional refund obligation or which has generated income subject to social insurance contributions. In this case, the value of the benefit received from the stock option does not depend, deviating from the original plan, on the development of the value of the shares between promising and transferring, which is at most one year in duration.

Such a situation may arise if the conditions change, for example, in such a way that an employee’s employment relationship ends during the period of one year and they can keep part of the shares. At the same time, an obligation to pay social insurance contributions arises.

Such a stock option is considered to have been given, from the perspective of social insurance contributions, when burdens concerning the stock option end and the stock option remains in the person’s ownership or is otherwise made available to them. Considering taxation, a conditional stock option is, however, considered to have been given already when the person receives the right of ownership to the shares.

The amount of the stock option must be reported using the Conditional stock option income type for determining social insurance contributions. The stock option to be reported using this income type is not income paid to the income earner in concrete terms, but this information is used as the basis of social insurance contributions. The benefit received by the income earner and the tax withheld from it were already reported using the Stock options and grants (320) income type when the income earner received the right of ownership to the stock option. This information is used in taxation, for example.

The Conditional stock option income type is only used when the stock option involves both a share assignment restriction and a conditional refund obligation. If the stock option only involves one of these two burdens, it must be reported similarly to regular stock options using the income type Stock options and grants (320).

This income type is subject to social insurance contributions.

366

Copyright royalties, earned income

Compensation paid for the transfer of a copyright to a written or artistic work or for the right to use the object of a copyright.

Compensation can also be paid for the transfer of a right related to a copyright or for the use of an object protected by related rights. A copyright can be transferred in full or in part based on an agreement.

This income type is used to report the copyright royalties that constitute earned income. Copyright royalties that constitute capital income are reported using the income type Compensation for use, capital income (314).

If compensation that constitutes earned income is paid for the transfer of an industrial property right, it must be reported using the income type Compensation for use, earned income (313).

If copyright royalties are paid to an income earner who is a non-resident taxpayer, they must be reported using the income type Royalty paid to a non-resident taxpayer (362).

Copyright royalties can be paid to recipients regardless of whether they are registered in the prepayment register. Copyright royalties constitute taxable income, and tax is withheld from them if the recipient is not registered in the prepayment register.

Copyright royalties must always be reported to the Incomes Register if tax has been withheld from them. If copyright royalties are paid to a natural person, they must also be reported, even if no tax has been withheld.

Social insurance contributions are not usually paid on copyright royalties. However, if such compensation is based on a copyright established in an employment relationship and the compensation is subject to a social insurance contribution, the payer must indicate this by providing insurance information in conjunction with the income type.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

367

Stock grant paid in money

A stock grant that is paid in money.

The income type is used to report the part of stock grants that is paid in money. The part received in shares must be reported using the income type Stock options and grants (320).

Tax is withheld from the stock grant paid in money, but no social insurance contributions are paid, if the employee has the possibility, based on an incentive system, to receive the employer company’s listed shares (or those of another company in the same group, or a company in some other equivalent financial consortium) and the value of the benefit depends on the development of the value of the shares in question over a period of more than one year in length after the remuneration has been promised. Otherwise, the stock grant is income subject to social insurance contributions.

By default, this income type is subject to the pension insurance contribution but not to other social insurance contributions.

If a payment reported using this income type differs from the default, the payer must report it by specifying insurance information in conjunction with the income type.

Detailed guidance on reporting insurance information: Reporting data to the Incomes Register: insurance-related data

Detailed guidance on rewarding employees: Reporting data to the Incomes Register: rewarding employees, payments made to an entrepreneur and other special circumstances

368

Employee stock option paid in money

An employee stock option that is paid in money.

The income type is used to report the part of an employee stock option that is paid in money. The part given in other than money must be reported using the income type Employee stock option (343). If required, the income type Employee stock option with a subscription price lower than the market price at the time of issue (361) can also be used.

Tax is withheld from an employee stock option paid in money. The employee stock option is subject to income taxation when the option is exercised.

No social insurance contributions are collected from an employee stock option when it is exercised. Even if the subscription price was significantly lower than the fair value, but the employee stock option is only exercised more than one year after its issuance, the payment is not deemed to be earnings from work on which social insurance contributions are based. A stock option exercised after more than one year is reported using income type Employee stock option.

Detailed guidance on rewarding employees: Reporting data to the Incomes Register: rewarding employees, payments made to an entrepreneur and other special circumstances

369

Earnings from work paid by a JuEL employer to a worker client of an invoicing service

Earnings from such work which a payer within the scope of the public sector pensions act (julkisten alojen eläkelaki (JuEL) 81/2016) has commissioned from the individual and which the individual performing the work invoices from the JuEL payer through an invoicing service company.

In these situations, the individual performing the work is often called a self-employed “light entrepreneur”. This income type is only used when the individual performing the work has no YEL or MYEL insurance, and they are insured in accordance with JuEL.

This income type is an “info income type”. In these situations, the income is reported to the Incomes Register twice. The invoicing service company reports the income paid using an income type for wages or non-wage compensation for work. Taxes and certain benefits are determined based on this data. The JuEL payer that commissioned the work also reports the income separately using this info income type so that pensions are determined correctly.

The info income type is only used to report earnings from work within the scope of JuEL, not reimbursements of expenses paid by the same payer, for example.

The income type is subject to pension insurance contributions.