Source: https://www.vero.fi/en/About-us/contact-us/forms/tayttoohjeet/filing-and-paying-employers-contributions--detailed-guidance-2018/
Timestamp: 2020-08-11 07:26:48
Document Index: 41614690

Matched Legal Cases: ['§ 13', '§ 13', '§ 25', '§ 67', '§ 69', '§ 13', '§ 14']

Filing and paying employer's contributions ‒ detailed guidance, 2018 - vero.fi
Filing and paying employer's contributions ‒ detailed guidance, 2018
This guidance is for the 2018 filing year (or for years before 2018 if applicable).
You must file your reports on employer contributions electronically, in MyTax, for example. Paper forms can only be used if you do not have access to e-filing.
If employers’ contributions are the only type of tax that you file, either electronically or on paper, follow the 2018 instructions.
When you have both employers’ contributions and VAT and you file on paper, you can use one single paper form for both. For VAT filing, please read the guidance for 2019.
The instructions on how to file employer contributions to the Tax Administration are given in this guidance – for VAT filing, read the 2019 VAT instructions.
If you file on paper and you only need to file VAT, use the 2019 forms and instructions.
If you file other self-assessed taxes, (such as the amounts you have withheld when paying out dividends), use the appropriate forms and instructions for the relevant year of withholding and payment.
Reporting wages paid in 2019?
The reporting routine for wages has changed – you must now file them to the Incomes Register.
Further information about the change.
You must file the following information to the Incomes Register and you are no longer required to complete self-assessed tax returns for it:
Withholding on payments made to a limited company, cooperative or other corporation
During 2019, paid-out pensions and social benefits are still to be included in the self-assessed tax return.
Shared information content for filing self-assessed taxes
Special groups of taxpayers (for example, sub-accounting units, account operators, tax recipients)
Businesses and other employers that must file employer's contributions (payroll withholding, health insurance, tax at source)
How to pay self-assessed tax return
This entry is required. Fill in your personal identity code only in case you have no Business ID. This code is needed for matching the submitted information with the taxpayer concerned.
If your filing period is the calendar month, enter a number (1-12). Example: For filing taxes for March, enter '3'.
If your filing period is the quarter, enter 1, 2, 3 or 4. Example: For filing taxes for the 2nd quarter, enter '2' (from April to end of June).
Wages, fees, salaries, social benefits, reimbursement paid to an individual in an employer/employee relationship (§ 13, act on tax prepayments (Ennakkoperintälaki 1118/1996))
Fees for attending a conference, for giving lectures or speeches, for being a member of a board of directors or other similar councils, for work as a Managing Director, amounts paid to a partner of a partnership company, and amts paid in compensation for acting in a position of trust (luottamustoimi in Finnish, förtroendeuppdrag in Swedish) (§ 13, act on tax prepayments).
Pensions, social benefits, insurance indemnity payments, etc. (this also includes pensions paid to nonresident individual taxpayers)
Nonwage compensation (=trade income), royalties (§ 25, act on prepayments)
Enter all the payments listed above regardless of whether the employer's health insurance contribution is being paid on them or not.
Enter the wages even in the following cases where no withholding is carried out because:
The paid-out wages are low
No cash payment – fringe benefits are provided instead
The beneficiary’s tax card indicates a zero rate of withholding.
If you are a household employer and haven't paid out more wages than €1,500 per calendar year and no withholding has been involved, you do not have to file a Self-Assessed Tax Return. However, if there has been any withholding, you must report it. When the wages paid out are above €200, you must file an employer payroll report (annual information).
Guidance for household employers
Any amounts higher than the tax-exempt limits of allowances for travel expenses – if the employer has paid out higher amounts than defined in the Official Decision of the Finnish Tax Administration on allowances for travel, the amount exceeding the limit is regarded as taxable wages.
See conditions of tax-exempt allowance (The 2018 Official Decision on Allowances for Travel Expenses)
Annual wage equivalent for purposes of social insurance (=”vakuutuspalkka”) when applying the 6-month rule. If no such equivalent has been agreed on, fill in the actual cash wages.
Fees paid for giving lectures, not based on an employer/employee relationship, fees for attending meetings, fees for giving lectures and speeches, fees for membership in a board of directors, regardless of whether pension insurance premiums are paid or not.
Amounts reflecting profit sharing, within the meaning of the act governing employee-stockholders' funds (henkilöstörahastolaki 814/1989), paid to employees in cash.
Paid allowance for travel expenses that are treated as exempt from taxation if they were paid to the wage earner in accordance with the Decision of the Tax Administration on tax-exempt allowances for business travel.
Paid reimbursement of out-of-pocket expenses if they were paid to the wage earner in such a way that no obligation for withholding arises (such as reimbursement for private telephone and tools).
Arrangements and paid expenses for fringe benefits, if you provided them collectively to everyone who works for you (§ 67 and § 69, act on income taxation).
Wage earner-paid expenses that are directly connected to their work (such as their tax-deductible expenses for the use of a private chainsaw) and are accounted for before you withheld tax on their wages.
Paid expense allowance, treated as exempt from taxation, paid to a foster care provider.
Read more: Tax treatment of wages and trade income (only in Finnish, Palkka ja työkorvaus verotuksessa)
Trade income and copyright royalty income
You must withhold tax on any payments going to a natural person or to a partnership (including limited and general partnerships) that are not on the Prepayment Register. Use this field to fill in this kind of trade income and copyright royalty income you have paid. Enter the gross amounts without deducting any VAT or paid reimbursement for the beneficiaries’ commuting/travel expenses.
In the same way, you must withhold tax on the amounts you pay to a limited company, cooperative or other corporate entity as trade income or royalties unless the beneficiary is on the Prepayment Register.
If you file on paper, fill in the taxes you withheld under “Information on other self-assessed taxes”. To identify the tax, enter code 25.
If you paid out dividends, you must not include them in “Wages and other payments subject to withholding”. The only field where you should report the tax you have withheld on paid-out dividends is “Other self-assessed taxes”, using code 92.
For more information, see Filing and paying other self-assessed taxes.
Tax withheld (on wages and other payments)
Note: if you file on paper, enter any withholding on payments of dividends in 'Other self-assessed taxes', using code 92.
Read more: More information on withholding (only in Finnish, Ennakonpidätyksen toimittaminen)
Wages and other payments subject to tax at source
Enter the total of wages and other payments subject to tax at source paid to nonresident taxpayers during the tax period. Enter the gross amount, do not deduct the amount referred to in section 6 of the act on the taxation of non-residents’ income and capital.
Wages subject to tax at source (for more information, see allowances for paid expenses).
Wages paid by a public corporate body.
Compensation paid to a public entertainer, artiste or athlete for personal services performed (taxable at the 15%-rate, or if a tax card has been issued – at a lower rate as appropriate).
The benefit that arises from employee stock options and stock grants, if based on work performed in Finland.
Nonwage compensation, i.e. "trade income" (if paid to a corporate entity, it does not have to be reported unless you withheld tax at source on it).
In addition, the wages or salary (€5,800 or higher) paid to key employees (to Finnish tax residents, too) (For more information, see the act on tax withholding on the compensation paid to foreign beneficiaries (only in Finnish, laki ulkomailta tulevan palkansaajan lähdeverosta 1551/1995).
If a Finnish company pays wages to a nonresident who works in a foreign country, and who is not covered by social insurance in Finland, do not report it on the return. However, the Finnish company (=you) must file an employer payroll report in the usual way.
The following are non-residents:
A Finnish citizen who lives in a foreign country may become a nonresident after three full calendar years after the year of leaving Finland, or when he or she no longer has any substantial ties with Finland.
If an individual's primary place of work is in a foreign country, and this individual is staying in Finland temporarily (e.g. lecturers and specialists), paid wages subject to tax at source do not have to include their allowances or reimbursement for travel, exempt from income tax under the act on income taxation, and in the case of seafarers, the tax-exempt allowance paid to seafarers. For more information, see the list under the sub-heading “Compensation not treated as wages”.
You must valuate the fringe benefits included in the wages you pay as instructed by the provisions of the act on income taxation.
However, if an individual who is a nonresident works in Finland full time, in a retail store, office, or a factory etc., this place becomes his or her primary place of work. In this case, you can pay no tax-exempt reimbursement to him or her.
If during the period, you only paid amounts subject to withholding of tax at source and nothing subject to ordinary withholding of taxes and contributions, you must enter zeroes in:
“Wages and other payments subject to withholding”, and
the health-insurance-contribution-related fields “Wages subject to employer's health insurance contributions” and “Employer's health insurance contribution payable”.
Tax at source on wages, etc.
The tax-at-source, withheld on wages and nonwage compensation i.e. trade income, including amounts withheld on any payments of trade income to a foreign corporate entity.
The health insurance contributions of the insured person (health insurance contribution and daily allowance contribution).
The tax-at-source withheld on fees or wages paid to a public entertainer, artiste or athlete for the performance of personal services.
The tax-at-source withheld from key-employee salary.
Also, enter any taxes withheld on payments, subject to withholding, made to nonresidents and entered in "Wages and other payments subject to tax at source".
To calculate the tax at source, the basis is the gross amount minus deductions, pursuant to section 6 of the act on the taxation of nonresidents' income, (€510 per month or €17 per day).
If you file on paper, the tax-at-source you withheld on payments of interest and royalties requires reporting under code 69 in “Other self-assessed taxes”. Likewise, the tax-at-source on any dividends you pay requires reporting under code 39; on interest, under code 84.
Read more: Filing and paying other self-assessed taxes.
Enter the wages and other payments you paid out during the tax period and on which you must pay health insurance, including:
The wages, salaries, fees and compensation listed in § 13, Prepayment Act; excluding those referred to in the Act governing health insurance – see the list under the sub-heading Compensation not treated as wages.
Tip income, received by employees during their employment.
The basis wages for insurance premiums for an employee working in a foreign country if the six-month rule is applied, or instead of the wages for insurance purposes, the wages subject to withholding, paid to such an employee, if no agreement on a basis for insurance premiums is made.
Wages paid to a nonresident who is covered by the Finnish social security system (see “Wages and other payments subject to tax at source”).
The monthly pay of a key employee amounting to at least €5,800 (for more information, see the act on tax withholding on the compensation paid to foreign beneficiaries (only in Finnish, laki ulkomailta tulevan palkansaajan lähdeverosta 1551/1995)).
Amounts paid as “pay security – palkkaturva"
Enter the wages even if no withholding is carried out. Reasons for no withholding include the following: the amount of pay is low, the pay is only given to the worker in the form of fringe benefits, the worker’s tax card specifies a zero rate of withholding. Employer's health contribution must also be paid in circumstances where no withholding is carried out.
For tax purposes, the following compensation is treated as wages, and you must include it:
Any amounts higher than the tax-exempt upper limits of allowances for travel expenses (if you paid out higher amounts than defined in the Tax Administration’s Decision on tax-exempt allowances for business travel or paid out the allowance amounts on less strict grounds, the part of the amounts considered subject to tax must be entered as wages paid to the worker).
Wages paid to workers during sick leave, even if you had received compensation from Kela or an insurance company for them.
Employer-paid pension insurance premiums, regarded as wages.
Payments exempted from the health insurance contribution
If the wages and other payments do not give rise to the contribution, enter zeroes in “Wages subject to the employer's health insurance contribution” and “Employer's health insurance contribution payable”.
Wages you paid to workers younger than 16 or to workers who had turned 68. The calendar month of the sixteenth birthday is the last month when these wages are not included, and correspondingly, the calendar month of the 68th birthday is the last month when they are included.
Amounts listed in Act on Sickness Insurance Chapter 11, Section 2.4 including collective employer-provided fringe benefits given to the all the workers on your payroll, even if this benefit were taxable as a fringe benefit.
Benefits arising from other rights to buy stock or similar securities for a reduced price on the basis of employment.
Wages payable for waiting time (§ 14.1, Employment Act).
Amounts reflecting profit sharing, within the meaning of the act governing employee-stockholders' funds (814/1989), paid to employees in cash.
Amounts excluded from your worker's wages before you carry out payroll withholding (e.g. exclusion for chain-saw costs), thus not subject to withholding.
Paid allowances for travel expenses that are treated as exempt from taxation because you paid them to worker within the max. limits set out by the Decision of the Tax Administration on tax-exempt allowances for business travel.
The employer must pay the health insurance contribution and collect the insured party’s health insurance premium from the worker. A nonresident is covered by the Finnish social insurance system if he or she works on board a Finnish ship, or arrives in Finland to work for at least four months, and is not a holder of the A1 Certificate or similar documents issued by home-country social authorities.
The employer does not have to pay the contribution and the insured party’s health insurance if the sum of wages paid to the nonresident does not reach €1,173 per month (year 2017) or if the working hours are below 18 hours a week. For checking the 2018 values, you can click “How to calculate the health insurance contribution” (only in Finnish, Työnantajan sairausvakuutusmaksun ja vakuutetun sairausvakuutusmaksun määräytyminen ja verotus.
Even if the employee's place of work is not located in Finland, coverage by the Finnish social insurance system may exist on the basis of the following:
The employee belongs to the aircrew of a Finnish airline company.
The employee lives in the EEA or Switzerland and is employed by a Finnish freight company and is a member of the freight fleet crew or personnel.
For more information (in Finnish/Swedish), click Työnantajan sairausvakuutusmaksun ja vakuutetun sairausvakuutusmaksun määräytyminen ja verotus.
The base for this contribution is the payroll total entered in the previous field. Multiply the total by the percentage rate.
Rates in force for 2018 (Employer's contributions to be reported and paid to the Tax Administration)
Employers are entitled to compensation from Kela if they have paid wages but the worker receives Kela-paid daily allowance. In this case, the Tax Administration can pay back the health insurance contributions to you if you received the compensation described above. If you reported a contribution amount that turns out to be too high because of the compensation, you must correct it by filing a replacement return for the same tax period.
File your replacement return for the tax period where the error was found. If the amount is low, you can implement the simplified method of making corrections. Another option to make a correction to a paid-in health insurance contribution is as follows: Subtract the excessive amount from the next health insurance contribution you are expected to pay during the calendar year.
Employers can do this independently after they have received the letter confirming the exact amount of a social benefit, of a compensation, etc. Refunds of health insurance contributions are paid to employers in connection with a coverage being paid to them by Kela, because their employees have received per diems, pensions and other benefits. For example, if an employer has paid wages to a worker who is on maternity leave, they can wait until Kela sends them a letter confirming the amount of the maternity benefit and then subtract the excessive part of the paid-in health insurance contributions accordingly.
Illustration: In August 2016, the employer had paid wages to a worker, and the employer also paid the health insurance contribution on this. The employer received money in February 2017 based on its payments of wages in August 2016, for which the worker was paid social allowances. Under the circumstances, the employer had paid too much in health insurance contributions. To make corrections to information filed for tax periods prior to 1 January 2017, filers are simply allowed to just change the entries for the final tax period of the calendar year. The employer can now file a replacement return for December 2016 with a complete set of employer's contribution amounts. The employer payroll report filed for 2016 must be corrected, too.
Illustration: The employer received money in February 2018 as a coverage for their payments of wages in May 2017, for which the worker was paid social allowances. Under the circumstances, the employer had paid too much in health insurance contributions. The employer can now file a replacement return for May 2017 with a complete set of employer's contribution amounts. The employer payroll report filed for 2017 must be corrected, too.
If you made an error in your filing, you must put it right. For more information, see Making corrections to submitted returns An example of an error on the tax return would be that you have entered €70.00 instead of €700.00 in the health insurance contribution field.
If you are registered as an employer paying wages regularly, you must submit Self-assessed tax returns for each tax period.
If you paid no wages during a tax period and you file on paper, enter zeroes in the following fields of the paper form: “Amount withheld”, “Tax at source on wages, etc.” and “The employer's health insurance contribution”.
If you file in MyTax, you must submit your “Not active” report specifically for each tax period. The way to do this in MyTax is to select “No Activity/wage payments” specifically for each tax period.
If your company no longer pays wages or has gone out of business, you should file a Notification on termination of business (available at www.ytj.fi). However, you must file your return for employer's contributions for the final tax period when you still are registered as an employer paying wages regularly.
Large employers with several business locations may have a number of sub-accounting units entered in the Tax Administration’s registers. These units must use their own Identity Codes when filing their tax returns for employer's contributions. However, their VAT and other self-assessed taxes are reported with the main-company Business ID codes only. The Tax Administration only uses the main-company account when entering the payments reported by sub-accounting units.
There is no requirement to file a return for seafarer's wages or fees. Instead, similarly as for other payrolls, you must file and pay the withholding, taxes at source, and employer's health insurance contributions by the 12th of the second month after the end of the calendar month. Returns must be filed electronically, in MyTax, or via other e-Services. MyTax also has an interface allowing users to make payments.
69 Tax withheld at source on interest and royalties (nonresidents)
The actual payers (e.g. listed companies paying dividends) must give a Letter of Authorisation in order to officially give permission to the account operator for tax-return filing. In such arrangements, the account operator’s Business ID is included in each submitted return.
25 = Withholding on payments made to a limited company, cooperative or other corporation
69 = Tax at source on interest and royalties (nonresidents)
(40 = Pharmacy tax, must be filed electronically.)
The act also applies to temporary, one-time public competitions or sweepstakes, guessing games, betting, and other comparable events where random results will determine who will win money in cash or in the form of noncash benefits. Nevertheless, a prize is taxable under other tax laws if it is an amount of money, paid in exchange for goods or services, or if it is paid as wages.
The rate of insurance premium tax is 24%. Its base is the accumulated or paid-in insurance premiums (sections 3 and 4 of the act on the tax on insurance premiums (Vakuutusmaksuverolaki 664/1966). In fire insurance, the fire protection fee of 3% is also considered when the basis for the tax is determined.
Buyers of timber are normally expected to withhold tax on the payments they make to forest owners. Note: Note: this must also be done if the forest owner is someone who lives in a foreign country permanently and is a nonresident.
The buying has to do with the buyer’s business operation
If a forestry association is acting as an intermediary when several owners are selling, the party liable to withhold, file and pay the tax is the association, not the buyer of timber. However, if the buyer of timber pays the purchase prices directly into the bank accounts of the sellers, the party liable to withhold, file and pay the tax is still the buyer although an association has acted as an intermediary.
If you are a buyer, you must also file an information return on the timber and the amounts you paid for it after the year is over. You must do so by the end of January after the end of the year of withholding.
Read more: Liability to withhold tax on purchases of timber (only in Finnish, Puun ostajan velvollisuudet)
25 Withholding on payments made to a limited company, cooperative or other corporation
You must withhold tax on any trade income (=nonwage compensation) or royalties you pay to a limited company, cooperative or other corporation, and pay the withheld amounts on to the tax office unless the limited company, cooperative or other corporation is on the Prepayment Register.
Note: Report any payments going to a natural person or partnership (limited or general partnership) who is not on the Prepayment Register under ”Wages and other payments subject to withholding” and enter the withholding in ”Tax withheld”. You must do this unless the beneficiary is on the Prepayment Register.
You also must file an annual information return in order to report the payments and the taxes withheld on them. You must do so once a year, by the end of January after the end of the year of withholding.
This sub-type concerns the withholding on payments of interest, profit share, and aftermarket bonus, etc., you make to a natural person.
Code 69 is only for the withholding on payments of interest and profit-shares to a resident of Finland. If you paid a nonresident and withheld tax, specify code 69.
For more information, see the guidance on withholding on paid-out dividends (only in Finnish, “Ennakonpidätys osingosta ja Verohallinnolle annettavat ilmoitukset”)
and 69 Tax withheld at source on interest and royalties (paid to nonresidents)
Foreign corporate entities and citizens of foreign countries living outside Finland are treated as nonresidents, i.e. as having a limited tax liability. If they are beneficiaries of dividends, interest or royalties from a Finnish payor, it is required that a tax is withheld at source (as a final tax).
In the same way, use the '39' code also for reporting the tax at source withheld on distributions of money to the shareholders from a fund consisting of unrestricted corporate equity.
Payments of interest subject to tax at source are those paid to tax-resident individuals in Finland – i. e. natural persons fully liable to tax – or estates of deceased persons in Finland:
If your company no longer carries out an insurance business, you should file a Notification on termination of business (available at www.ytj.fi). However, you must also file your self-assessed tax return for your final period as a business liable to tax on insurance premiums.
Payroll withholding, the employer's health insurance contribution, and taxes at source are regarded as “employer contributions”. The reporting requirement for 2018 and prior years concerns businesses, companies, and others that fall into the following categories:
Payors of pension
List of other self-assessed taxes and information on who must file and pay them:
Lottery tax: the party in charge of the event.
Amount withheld from the purchase price for timber: the buyer.
Amounts withheld on payments made to a limited company, cooperative or other corporation: the payor of compensation, royalties.
Amounts withheld from interest and shares: the party paying the interest etc., liable to withhold tax on the payments under the act on income tax.
Amounts withheld on dividends and cooperative surplus: the payor.
Tax withheld at source on dividends and cooperative surplus paid to a nonresident: the payor.
Tax withheld at source on interest income and royalties paid to a nonresident: the payor.
Tax withheld at source on payments of interest income to a resident taxpayer: the payor.
Pharmacy tax: the party legally defined as liable to this tax (e-filing only).
Read more about Pharmacy Tax.
How to pay self-assessed taxes
Read more about filing and paying self-assessed taxes
If you detect an error or omission, you are expected to put it right without delay. It is expected that any inaccuracies are corrected, although no change would ensue to amounts of taxes.
The making of corrections is the same, regardless of the fact that some corrections lead to an increase of the amount of tax, and others lead to a decrease. In other words, from the perspective of making corrections, it is not important whether your original return contained too much tax to pay – or too much refunds to receive.
The replacement erases and revises the amounts for a certain tax (such as VAT). For this reason, it is required that you re-submit both the amounts that were inaccurate and those that were accurate, as well. All kinds of employer contributions are treated as representing just one single sub-type of taxes. For this reason, you must re-submit your withholding, health insurance and tax-at-source if any of these had contained errors or omissions.
Illustration: Your tax period is the month, and you want to make corrections to your 12/2016 employer's contributions in May 2018. The way to solve the problem is to file a replacement return, tax period 12/2016.
Illustration: The tax period of a limited company is the month, and its accounting year is 1 July 2016–30 June 2017. In October 2016, it has had €2,000 of withholding to pay. However, in May 2018 it is detected that the self-assessed return for October has indicated €2,500 as the amount withheld, meaning €500 too much. The way to correct the error is to file a replacement return for October 2016.
However, if the mistake is small, it may be corrected by a simplified process
Illustration: You are an employer, and your tax period is the calendar month. In November 2018, you detect an error in the withholding figure on your October 2017 tax return. You had reported too much withholding: you actually withheld a smaller amount. There is no need to prepare a correction specifically for October 2017 because in this example, the amount is regarded as being “low”; rather, you can make the necessary correction to the total amounts by the general due date in December 2018 when filing your December return. Because you didn't notice the error until 2018, the following year, you also have to make a correction to your employer payroll report for 2017.
For more information on making corrections, see the 2019 guidance.
If you already filed your self-assessed taxes but you notice some errors and omissions, you must file a replacement return to put things right.
You must fill in the appropriate space to explain why a correction is being made to your employer's contributions:
Because you can put smaller mistakes right by a simple process, it is enough if you enter a correction in a return for a future tax period. No replacement return is filed, and there's no need to specify the reason for the correction.
If you do not file a tax return by its deadline, or if you fail to make corrections to a filed tax return by the deadline date, you must pay a late-filing penalty. The penalty charges are specific for each sub-type of tax filed late. However, payroll withholding, the employer's health insurance contribution, and taxes at source are regarded as one single type.
If you file the return late, a penalty charge of €3 per day is imposed for the first 45 days of delay. The counting of days begins the next day after the due date, and continues up to the actual arrival date of the filing at the Tax Administration, with that day included. Reference to "days" means calendar days, i. e. weekends and holidays are included.
If the delay is less than 45 days or 45 days exactly, the amount of the tax filed late has no effect on the size of the charge. This way, you'd have to pay €135.00 if you were 45 days late in filing a return (45 days × €3). Because the charge does not depend on the tax owed, it may even be higher than it. To illustrate, let us say the tax is €50.00. If you were 45 days late, the charge imposed would be €135.00.
If 45 days have elapsed and you still haven't filed, two percent of the tax to be paid and filed late is added to the €135.00. However, the part of the charge linked to the tax owed is maximally €15,000, for each tax, and for each tax period.
Two percent of the tax to be paid and filed late is added.
Late filing and late payment relating to self-assessment