Reimbursement of Expenses

As a general principle, the employer is responsible for the costs directly related to the employee's work, such as postal and telecommunications expenses, as well as the travelling expenses (excluding travel between the employee's home and place of work), unless otherwise agreed between the parties or provided for in the collective agreement.

In accordance with the above principle, the employee may therefore receive various expense compensations in addition to his or her salary. These expense compensations are usually due to travel costs or the use of the employee's own equipment. There is no provision for compensation for expenses in the Employment Contracts Act. They are generally based on the provisions of collective agreements.

The reimbursements are generally exempt from tax up to a certain limit determined by the tax authority and anything above that limit is taxable (salary) income. This is regulated e.g. by the Preliminary Tax Withholding Act and the Income Tax Act. General information about personal income taxation is also available on the website of the Finnish Tax Administration.