This article includes information about travel expense reimbursement reporting and handling in a situation where the employee is a recipient of compensation for work.
Travel expense reimbursement with a recipient of compensation for work
Kilometer allowances, daily allowances and meal allowances are reported to the Incomes Register with their own income types in the earnings payment report. However, if an employee is set as a recipient of compensation for work in his / her salary info, the travel expense reimbursements are transferred to income type Non-wage compensations for work in the earnings payment report.
Expense reimbursements that are linked to compensation for work are added to total income. After this, they are reported to the Incomes Register as one sum with the other payments.
Reimbursements of kilometer allowances, daily allowances and meal allowances have to be reported to the Finnish Tax Administration. These reimbursements are reported to the Incomes Register in 2019.
Kilometer allowances, daily allowances and meal allowances can be handled on travel invoices or salary slips in Procountor. The recommended primary receipt type for the handling of tax-free expenses is travel invoice.
In order to be able to create travel invoices for a person, adequate person information has to be given in the person’s basic info. Primarily this means giving the social security number (SSN) for a Finnish person. More information about adequate person information is available here.
Controls of a recipient of compensation for work
The travel expenses of a recipient of compensation for work have to be reported to the Incomes Register with the income type Non-wage compensations for work.
To make Procountor recognize a person as a recipient of compensation for work, a setting for it has to be activated in the Salary info view. Even if no salaries are paid for the person from Proocountor, the selection of Recipient of compensation for work has to be activated in Payroll > Employee Register > Salary info.
Information about the basic salary of the person is given in the Salary info view. Handling of travel expenses in the earnings payment report is determined separately.
Below are presented the controls of salary information in a situation where the amount of compensation on a salary slip has not been determined for a compensation recipient. This case may be realized, for example, when no compensation is paid for a person through salary calculation; instead, only travel invoices are created.
Salary types that match the salary types of the Incomes Register have been created for all different travel expense reimbursement handling types in Procountor. When Recipient of compensation for work has been chosen as the handling type, Procountor will automatically suggest non-wage compensations for work salary types for the reimbursements.
Pension insurance has to be set as Employees’ Pension Act (TyEL) for the compensation recipient in the Salary info view. However, a pension agreement does not have to be saved because the compensation recipient is beyond the scope of the employees’ pension act insurance.
Withholding tax of compensation for work
The payer of non-wage compensations for work always has to examine the possible tax effects of compensation for work on a situation-specific level. Therefore, the payments of compensation for work in the circumstances of the company or association in question have to be reflected with the guide provided by the Finnish Tax Administration (in Finnish).
More information about the handling of compensation for work and insurance controls in Procountor is available here.