Tax on accident compensation
Accident compensation, such as daily allowance, rehabilitation allowance, accident pension, survivors’ pension and compensation for loss of earnings during a medical examination, is taxable income. We automatically deduct tax from your compensation and pay it to the Finnish Tax Administration.
How is the tax rate for accident compensation determined?
Daily allowance, rehabilitation allowance and compensation for loss of earnings during a medical examination:
- We use the tax rate on your tax card for wages. We get this information directly from the Finnish Tax Administration.
- The tax rate is always at least 25%.
- If you do not have a tax card for wages, the tax rate will initially be 40%. We will use this rate until we receive a new tax rate calculated for the benefit.
- If the compensation is for the previous year, the tax rate is 50%.
- If you continue to receive compensation in the following year, we automatically receive your new tax rate from the Finnish Tax Administration. You can check your current tax rate in MyTax.
Accident pension, related rehabilitation allowance and survivors’ pension:
- The tax rate is 40% unless you have provided a new tax card for the benefit.
Benefits paid under voluntary insurance:
- The tax rate is 50% unless you have provided a new tax card for the benefit.
You can provide a new tax card
If you want to change the tax rate used for your benefit, you can request a new tax card for the benefit from the Finnish Tax Administration. The new tax card will apply from the date shown on the card.
When you have provided us with a new tax card:
- We will refund any tax that we have deducted in excess.
- We will use the new tax rate for future payments.
- If the new tax card applies retrospectively, we can also refund any excess tax deducted in previous months.
How can you get a new tax card?
You can find instructions for requesting a new tax card on the Finnish Tax Administration website at vero.fi/tax_card.
When you request a new tax card, tell the Finnish Tax Administration about all benefits, pensions and other income you receive. This helps it calculate your tax rate as accurately as possible.
If you are also applying for benefits from another organisation, such as Kela, it is best to wait until you know which benefits you will receive before requesting a new tax card.
