Reimbursement of Expenses

It is considered a general principle that an employer is responsible for all directly work-related expenses such as post and telecommunications expenses and travelling expenses unless the parties have agreed differently or provided otherwise in the collective agreement.

The employee may therefore, in addition to his/her salary receive reimbursements in respect of costs and expenses, usually for travel costs and expenses related to the employee’s use of his/her own equipment at work. The reimbursement of costs and expenses is usually based on the collective agreement and is not regulated by the Employment Contracts Act.

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.