Fringe benefits are a part of your pay
Fringe benefits are compensation for work provided to you by your employer in another form than money. The most typical fringe benefits include accommodation, meals, cars, mobile phones, bicycles and commuter tickets.
Your employer reports the fringe benefits to the Incomes Register. The information is transferred automatically to your pre-completed tax return. It is included in the sum total of the wage income reported by your employer.
The Tax Administration issues an official decision each year on the valuation of different fringe benefits. Fringe benefits are usually considered taxable income. However, fringe benefits are not subject to tax if your employer withholds from your wages a compensation that is no less than the value of the fringe benefit. Unlike other fringe benefits, bicycles and commuter tickets may be entirely exempt from tax.
Tax Administration’s decision does not include a confirmed taxable value for a benefit you receive, the benefit is taxed at its fair market value. The fair market value can also be used in situations where the fair market value of the benefit is lower than the value confirmed in the Tax Administration’s official decision.
See the values of fringe benefits in the Tax Administration decision:
Typical fringe benefits
See what the different types of benefits include and how their value is determined.
If your employment contract entitles you to use a dwelling that is owned or rented by your employer, you are considered to receive an accommodation benefit. If your employer pays your rent for an apartment that you have rented yourself, this is not considered an accommodation benefit.
The value of the accommodation benefit consists of a fixed basic value and a value calculated per square metre. The values depend on the municipality of location and the area of the dwelling. If the dwelling is in Helsinki, the value of the benefit is also affected by its postal code.
In addition to the financial benefit gained from the accommodation itself, the value of the accommodation benefit includes the charges paid for water and, if the dwelling has central heating or electrical heating, the heating costs. Electricity costs other than heating are not included in the monetary value of the accommodation benefit.
If your employer provides you with a garage or a parking spot, you are considered to receive a garage benefit. However, a parking space at your place of work that you use during working hours is not considered a taxable benefit. The amount of the garage benefit depends on the location of the garage or parking spot and whether the garage is heated or not.
If your employer provides you with meals either free of charge or at a price lower than the going rate, you are considered to receive a meal benefit.
The employer can arrange a meal benefit in various ways: by providing a meal service at the place of work, making contracts with local restaurants or providing dedicated means of payment (lunch vouchers, application or payment cards).
Specific meal benefit values have been determined for the personnel of hospitals, schools, day care centres and other similar institutions. Hotel, restaurant and flight staff also have their own meal benefit values.
If you or your family have used a car or van provided by your employer for private purposes, you have received a car benefit. Private vehicle use includes commuting between home and work.
This benefit type may be unlimited or limited.
- Unlimited car benefit means that your employer pays all expenses related to the car.
- Limited car benefit means that you pay at least the expenses related to the car’s use, such as fuel.
The monthly value of the car benefit consists of two parts:
- basic value (percentage of car's replacement price)
- operating costs (euros per month or per kilometre). If you calculate the operating costs per kilometre, you must keep a driver's log of the kilometres driven for private purposes.
The value of the car benefit depends on the car’s list price on its purchase date, the year when the car was first taken into use, accessories and driving power (e.g. whether the car is powered by gasoline or electricity).
In some cases, the calculated value of the car benefit may be reduced or increased. For example, if you have driven more than 30,000 km for work purposes during the year or if you have only driven a small number of kilometres for private purposes according to your driver’s log, there may be grounds for reducing the value. You can claim a reduction to the value of your car benefit on your pre-completed tax return in MyTax or by filing Form 50A Earned income and deductions. Read more about reducing the value of your car benefit (link).
If the number of kilometres driven for private purposes is more than 18,000 km per year, the value of your car benefit may be increased.
If your employer provides you with a telephone subscription, you are considered to receive a telephone benefit. However, you are not considered to receive a telephone benefit if your employer has only provided you with a phone device primarily for work purposes. Further, if you pay for your private calls yourself, you are not considered to receive the benefit.
The value of a mobile phone benefit in 2024 is €20. This includes charges for domestic and international calls, text messages, multimedia messages, and data communications. If you use your mobile phone as a means of payment or to call premium-rate numbers, such as fundraiser or voting lines, these charges are not included in the benefit.
Your employer may provide you with subsidised commuter tickets for use in public transport for travel between your home and place of work. You do not need to pay tax on employer-subsidised commuter tickets if their total value is no more than €3,400. If you receive a tax-exempt bicycle benefit (up to €1,200), it is included in this amount.
Note that you cannot claim deductions for any commuting expenses for which you have received a tax-exempt employer-subsidised commuter ticket.
If you have a bicycle owned or leased by your employer in your personal use, you are considered to receive a bicycle benefit. The bicycle benefit is exempt from tax up to €1,200 per year.
Read more about the bicycle benefit (chapter 11, in Finnish and Swedish)
Frequently asked questions
No, it does not. The amount of bicycle benefit that is exempt from tax is still €1,200 per year.
Example: The leasing fee of an employee’s bicycle has so far been €100 per month. This bicycle benefit has been tax-exempt to the employee, because the total amount of benefit they have received per year is no more than €1,200. If the increase in the general VAT rate causes the leasing fee to be more than €100 per month, the employee must pay tax on the amount exceeding €100.
Your employer reports the taxable and tax-exempt portions of the bicycle benefit to the Incomes Register.
Employer: see instructions for reporting bicycle benefit
Read more: The general VAT rate rises to 25.5% starting 1 September 2024
Fringe benefits from employment — other pages
Key terms: