Wage income types: 400 series

401

Compensation collected for car benefit

The deductible of a fringe benefit paid by the employee from the taxable value of the car benefit.

The deductible of the car benefit decreases the amount of earnings and taxable benefit on which social insurance contributions are based or eliminates it entirely. If the deductible of the car benefit is lower than the taxable value of the car benefit, the difference between the value of the car benefit and the compensation collected for the car benefit is taxable wages of the employee. If the deductible is equal to the taxable value of the car benefit, no taxable benefit is established. Even then, the collected compensation must be reported. The amount of the benefit must also be reported using the income type Car benefit (304).

The amount of the car benefit is reported in full using the income type Car benefit (304), and the deductible collected from the employee is reported using the income type Compensation collected for car benefit (401).

The car benefit must be reported even if the payer has collected from the income earner 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 employer may collect the deductible of the car benefit from the net wages of the employee.

402

Withholding tax

A prepayment whereby the payer deducts the tax calculated according to the withholding tax rate from the monetary amount paid to a taxpayer.

The withholding tax can be reported as a total amount in the report, even if several income types were reported.

403

Elected official fee

A fee that can be collected from the meeting fees of elected municipal officials to be paid to political parties.

The elected official fee applies to individuals who act as an elected official in a municipality, joint municipal authority, wellbeing services county, or joint authority for health and wellbeing. Only these parties can report the elected official fee.

The payer of the elected official fee reports the elected official fee collected from a meeting fee paid to a person elected for a position of trust. The remuneration paid to a person in a position of trust is reported using the income types Meeting fee (210), Compensation for acting in position of trust (215) or Total wages (101), depending on the grounds of the payment. 

If the income earner acting in a position of trust has paid the elected official fee directly to a political party, the fee is not reported to the Incomes Register. The political party reports the fee to the Tax Administration on its annual return.

The fee is not reported if it is associated with a position of trust other than one in a municipality, joint municipal authority, wellbeing services county, or joint authority for health and wellbeing, such as a membership of a board of directors of a limited liability company or another civil law corporation.

404

Tax at source

The final tax collected from a payment made to a non-resident taxpayer that the payer is obligated to collect from the income in connection with its payment.

This itemisation type is used to report only tax at source collected and paid to Finland.

The tax at source can be reported as a total amount in the report, even if several income types were reported.

The tax at source does not include the employee's health insurance contribution; if necessary, this is collected separately. In such a case, the employee's health insurance contribution is reported using the separate income type Employee's health insurance contribution (412).

405

Tax at source deduction

A deduction made from the total amount of monetary wages and fringe benefits before tax at source is collected.

When tax at source is collected, a deduction of EUR 510 per month is made from the total amount of income for which a 35% tax at source is collected. When the income has been accrued during a period of less than a month, EUR 17 per day is deducted from the total amount. However, the deduction may not be larger than the amount of income. Receiving the deduction requires that the taxpayer presents the payer with a tax at source card with an entry for the deduction.

406

Wages paid

Cash wages paid to the employee after withholding tax, the employer's social insurance contributions and other deductible items have been deducted.

The other deductible items may include reimbursement collected from the employee for fringe benefits, unemployment fund and trade union membership fees collected by the employer, and enforcement payments.

Expense items that are the employer's responsibility, such as hotel payments on business travel, ticket expenses or any occupational health care payments, are not reported using the Wages paid income type.

407

Reimbursement collected for other fringe benefits

The share of the value of a fringe benefit paid by the employee.

In this section, report the amount collected from the employee for fringe benefits other than a car benefit or employer-subsidised commuter ticket benefit.

The amount of the fringe benefit is reported in full using the appropriate income type, and the deductible collected from the employee is reported using the income type Reimbursement collected for other fringe benefits (407).

Even if the employer has collected or the employee otherwise has paid a reimbursement for a fringe benefit to the employer equalling the monetary value of the fringe benefit, the fringe benefit and the reimbursement collected must be separately reported to the Incomes Register in full. 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.

If the reimbursement collected for a meal benefit equals the taxable value, the collected reimbursement is not reported using the itemisation type Reimbursement collected for other fringe benefits. In such a case, only the Reimbursement for meal benefit corresponds to the taxable value – Yes (true) entry is made.

The employer may collect the reimbursement for fringe benefits from the net wages of the employee.

If the fringe benefit reported with the income type Other fringe benefit (317) is not subject to social insurance contributions and the payer has reported this by specifying insurance information in conjunction with the income type, the equivalent insurance information must also be added to the income type Reimbursement collected for other fringe benefits (407), insofar as the collected reimbursement concerns the share of the benefit which is not subject to social insurance contributions Although the default for this income type is that it is not subject to social insurance contributions, the payer must confirm the data on the report in the manner described above.

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

408

Other item deductible from net wage or salary

Items the payer deducts from the net wage or salary before paying it to the income earner.

The payer may deduct payments from net wages by law or agreement. For example, the payer may deduct their receivables or such payments, the collection of which the payer and income earner have agreed upon, from net wages. Items deductible from a net wage include unemployment fund and trade union membership fees, and parking garage fees.

It is recommended that the distraint be always reported using the income type Distraint (417) and that the amount not be reported using the income type Other item deductible from net wage or salary (408).

409

Net wage or salary

Wages from which tax has been withheld and the employee's social insurance contributions have been paid.

The net wage is different to the wage paid to the employee.

410

Employer-paid premium for collective additional pension insurance

The employer's share of the additional pension insurance premium paid to cover a collective additional pension.

The premium is reported only if the employee pays part of the premiums. If the employer pays the collective additional pension insurance premiums in full, this information is not reported on the earnings payment report.

Only the premiums of collective additional pension insurance policies taken out on 6 May 2004 or later are reported here. If the employee has been insured prior to 6 May 2004, the premiums collected are reported only in the Employee's earnings-related pension insurance contribution section.

The contributions are also reported in that section when a new employee has joined a collective insurance policy after 6 May 2004, but the employer has taken the policy out prior to that date.

411

Employer-paid premium for collective additional pension insurance, employee's contribution

The employee's share of the additional pension insurance premium paid to cover a collective additional pension.

The premium is reported only if the employee pays part of the premiums. If the employer pays the collective additional pension insurance premiums in full, this data is not reported on the earnings payment report.

Only the premiums of collective additional pension insurance policies taken out on 6 May 2004 or later are reported here. If the employee has been insured prior to 6 May 2004, the premiums collected are reported only in the Employee's earnings-related pension insurance contributions section.

The contributions are also reported in that section when a new employee has joined a collective insurance policy after 6 May 2004, but the employer has taken the policy out prior to that date.

412

Employee's health insurance contribution

A share of the health insurance premium via which the employee participates in financing earned income insurance.

In the case of resident taxpayers, the health insurance contribution is always included in withholding tax, and the employee's health insurance contribution should not be separately reported for resident taxpayers.

The health insurance contribution of a non-resident taxpayer must be collected separately in addition to tax at source, unless the non-resident taxpayer wants to be taxed in accordance with the Tax Procedure Act, in which case the health insurance contribution is included in the withholding tax or prepayment of tax.

413

Employee's earnings-related pension insurance contribution

Earnings-related pension insurance contribution determined based on the gross wage, through which the employee participates in the financing of the earnings-related pension.

The employee's earnings-related pension insurance contribution is deducted from the employee's net wages.

414

Employee's unemployment insurance contribution

An unemployment insurance contribution determined based on the gross wage, through which the employee participates in the financing of the unemployment insurance.

The employee's unemployment insurance contribution is deducted from the employee's net wages.

415

Reimbursement for employer-subsidised commuter ticket

The deductible of a fringe benefit paid by the employee from the euro value of an employer-subsidised commuter ticket.

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

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 may collect the deductible of the employer-subsidised commuter ticket from the net wages of the employee.

The employer must deduct the reimbursement collected from the employee from the taxable share of the employer-subsidised commuter ticket deemed to be wages. The remaining amount must be reported as the taxable share deemed to be wages.

If no benefit deemed to be wages is created, the employer must deduct the reimbursement collected from the employee from the tax-exempt share of the employer-subsidised commuter ticket. The remaining amount must be reported as the tax-exempt share of the employer-subsidised commuter ticket.

In the case of employer-subsidised commuter tickets, the amounts of taxable and tax-exempt benefit are estimated on an annual level unlike other fringe benefits, which are valuated on a monthly level. 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.

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

416

Tax paid abroad

Tax, for example withholding tax, withheld by the employer from the employees wages and paid to the country of work. The withheld tax must be as close to the final tax as possible.

Most commonly, this involves a situation where a Finnish employer has a permanent establishment abroad and is subject to employer obligations there. This information is significant because, as the country of residence, Finland is obligated to eliminate double taxation.

This itemisation type is not used to report any taxes paid abroad by the employee; the employee reports them in their own taxation.

417

Distraint

An amount withheld in order to make a debt recovery payment. The garnished amount is calculated from net income.

However, a protected share must be left during garnishment for the livelihood of the debtor and their family.

If the payer has distrained an income earner’s wages, it is recommended that the distraint be always reported using the income type Distraint (417) and that the amount not be reported using the income type Other item deductible from net wage or salary (408).

418

Voluntary individual pension insurance premium

Premium of a pension insurance taken out for a specific person to complement statutory pension provision. The voluntary individual pension insurance premium may be continuous or a one-off payment.

Enter the premiums of the voluntary individual pension insurance taken for the employee here. Similarly, also report the premiums of an individual pension insurance taken out for a partner in a general partnership, a general partner in a limited partnership, or a shareholder in a limited liability company that does not have an earnings-related pension insurance.

If the premiums of voluntary individual pension insurance taken out by the employer exceed EUR 8,500, they are taxable income from which the employer's social insurance contributions are also paid. If the premiums exceed EUR 8,500 per year, the payer reports the extraneous premiums as other fringe benefits.

Enter only the premiums of the voluntary individual pension insurance here. If, on the employee's behalf, the employer has paid the employee's mandatory pension insurance contributions, unemployment insurance contributions and the premiums of voluntary pension insurance taken out by the employee, these are reported using the income type Other fringe benefits (317).

Tax-exempt premiums for life insurance taken out by the employer for an employee are not submitted on the earnings payment report.

419

Deduction before withholding

A direct expense incurred when performing work, which is paid by the employee and deducted from gross wages by the employer before determining the withholding tax. Such expenses include expenses paid by the income earner that are incurred from the use of a chainsaw, and other expenses arising from tools. Similarly, business travel expenses are such expenses, if the employer does not pay tax-exempt allowance for them in addition to wages.

The maximum amount of deduction that can be reported is the amount of the payment.

Enter the deduction made before withholding tax in this section. The share of the deductions must also be included in the wages reported using an income type.

In certain situations laid down in the law, the payer can also deduct such costs from the athlete's fee before withholding that were paid by the athlete himself or herself and that were directly incurred from sports. Such a deduction made by the payer is reported using the income type Deduction before withholding. The share of the deductions must also be included in the fee reported using the Nonwage compensation for work income type. The maximum amount of deduction that can be reported is the amount of the payment even if the expenses incurred by the athlete are greater than the fee.

If the payer makes the deduction from income that is not subject to social insurance contributions, the payer must submit the Type of insurance information entry for the Deduction before withholding income type. The default for the Deduction before withholding income type is that it is not subject to social insurance contributions. Regardless of this, the payer must provide the Type of insurance information entry (Subject to social insurance contributions: No) if the deduction is made from income that is not subject to social insurance contributions. 

If a single transaction includes the payment of wages subject to social insurance contributions and such wages in accordance with section 13 of the tax prepayment act (ennakkoperintälaki 1118/1996) on which social insurance contributions are not based, and expenses which are deducted before withholding are allocated to either income, the payer must specify the Type of insurance information. This allows the deduction to be allocated to the correct income type.

If, in a single transaction, the payer deducts expenses from income subject to social insurance contributions and income from which no social insurance contributions are paid, the payer must report the deductions separately. Type of insurance information (Subject to social insurance contributions: No) must be specified for the deduction made from income from which no social insurance contributions are paid.

If the deduction before withholding is made from income subject to all social insurance contributions, the payer does not need to specify the Type of insurance information unless the payer also pays some other income not subject to social insurance contributions in the same transaction.

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

420

Reimbursement collected for bicycle benefit

The deductible of a fringe benefit paid by the employee from the euro value of a bicycle benefit.

Part of the value of the bicycle benefit is tax-exempt and part is taxable. EUR 1,200 of the bicycle benefit is tax-exempt and any amount in excess of this limit is a taxable fringe benefit. A report must always be submitted for a bicycle benefit, even when there is no taxable benefit. Reimbursement collected for the benefit reduces the taxable amount of the benefit.

The employer may collect the deductible of the bicycle benefit from the net wages of the employee.

The reporting of a bicycle benefit differs from other fringe benefits, similarly to the reporting of an employer-subsidised commuter ticket, because the employer must deduct the reimbursement collected from the employee from the share deemed to be wages. The remaining amount must be reported as the taxable share deemed to be wages.

If no benefit deemed to be wages is created, the employer must deduct the reimbursement collected from the employee from the tax-exempt share of the bicycle benefit. The remaining amount must be reported as the tax-exempt share of the bicycle benefit.

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