illustration-blog

Taxation of employee benefits

Hello employer, familiarize yourself with the taxation of employee benefits and read more on how you can offer benefits to your staff tax-free

Hello employer, familiarize yourself with the taxation of employee benefits and read more on how you can offer benefits to your staff tax-free

Lunch benefit

Lunch benefit defined as tax-free by the Tax Administration is 25 % tax-free and the most popular employee benefit in Finland. 

The benefit is charged monthly and the amount charged varies according to the number of working days each month. The lunch benefit is therefore working day-specific and intended to be used once a day. The Tax Administration determines the daily minimum and maximum payment limits for the benefit, check the current values here

You can offer a lunch benefit to your employees as a fringe benefit or as a lunch deduction:

 

Fringe benefit

A fringe benefit is like a salary increase. By offering a lunch benefit on top of salary, you save 25 % in tax deductions.

Example: If an employee is given a salary increase of 100 € in cash, the employer must pay employer contributions for the entire amount. In this case, the actual costs of the salary increase will rise.

If the salary increase is instead offered as a lunch benefit worth 100 €, the taxable portion is only 75 %, i.e. employer contributions are only 75 €. The remaining 25 € is deducted as such in taxation. The remaining 75 € are expenses comparable to salary expenses.

Lunch deduction

The lunch deduction is charged from employee's salary. 25 % of the lunch benefit is tax deductible, meaning the employee pays the remaining 75 % of the benefit.

Example: If an employee receives lunch benefit of 100 € per month, 75 € is deducted from their net salary. The employer remains to pay the tax-free part of the benefit of 25 €, which can be deducted as such in taxation. The benefit does not generate taxable income for the employee or the employer.

Sports and culture benefit

The sport and culture benefit is a well-being-promoting alternative to a salary increase. It is a tax-free employee benefit that the employer can deduct from taxation. The benefit is tax-free for the employee.

The maximum tax-free amount of the benefit varies each year, check the current value

Commuting benefit

The commuting benefit is an employment benefit offered in the same way as a salary increase. It is a tax-free employee benefit that the employer can deduct from taxation. The benefit is tax-free for the employee.

The maximum tax-free amount of the benefit varies each year, check the current value

Massage benefit

The massage benefit is an employee benefit offered in the same way as a salary increase. It is a tax-free employee benefit that the employer can deduct from taxation. The benefit is tax-free for the employee.

Check the annual tax-free limit of Edenred Massage

The Tax Administration determines that the benefit must be distributed "collectively, normally, and reasonably". The benefit's tax exemption also requires that a contract must be created between the company offering the benefit to its employees and the service provider that is part of Edenred's massage network. Edenred makes it easy to create a contract through our separate portal.

If the company has mentioned in its occupational health agreement that physiotherapy is part of the occupational health package, the massage benefit can also be used to pay for physiotherapy services.

Dental benefit

Dental treatment provided by the employer and by using a targeted payment method is tax-free for the employee if it is organized by the employer, it is agreed upon in the occupational health care contract. The employer must also define the places where the targeted payment method can be used. The dental care provided must also be usual and reasonable according to the Tax Administration.

Check the annual tax-free limit of Edenred Dental

Regular dental care is considered part of maintaining work ability and treating illness. Dental can include, for example, dental check-ups, cavity fillings, and tartar removal. Dental treatment other than health or illness treatment is a taxable benefit for the employee (for example, aesthetic dental treatment). 

Woman holding a phone and a coffee at the office

Order benefits

Check out the price list of our employee benefits and easily order them online!

Order benefits