Tax-exempt and taxable benefits in kind for an entrepreneur operating through a limited liability company

A benefit in kind is compensation received from your limited liability company for work performed as an entrepreneur in a form other than money. The most common benefits in kind include housing benefits, meal benefits, car benefits, telephone benefits, bicycle benefits and employer-provided public transport tickets.

If your limited liability company has other employees in addition to you as the entrepreneur, the same benefits must also be offered to them.

Benefits in kind must always be reported to the Incomes Register according to the accrual principle. In other words, the benefit is considered income for the period during which it was available to the employee. The information is transferred from the Incomes Register to the beneficiary’s pre-completed tax return and is included in the wages reported by the employer under “Wages and benefits in kind.”

The Finnish Tax Administration issues an annual decision on the taxable values of different benefits in kind. A benefit in kind is generally taxable income. However, the benefit is not taxable if you pay your employer compensation from your wages that is at least equal to the taxable value of the benefit. Unlike other benefits in kind, bicycle benefits and employer-provided public transport tickets may be completely tax-exempt.

If no taxable value has been determined for a benefit in kind in the Finnish Tax Administration’s decision, the fair market value of the benefit is used for tax purposes. This may also be done when the fair market value of the benefit is lower than the taxable value determined by the Finnish Tax Administration.

In the UKKO Entrepreneur limited liability company service, you can report these benefits in kind only if cash wages are also reported on the same salary calculation and the cash wages cover the withholding tax payable on taxable benefits in kind in addition to the withholding tax on the wages.

In our service, you cannot report benefits in kind without any cash wages, even if the benefits are tax-exempt. In such cases, you must submit the report yourself through the Palkka.fi service so that the information is updated in the Incomes Register.

Once you have reported your benefits in kind through Palkka.fi—whether the benefit is taxable or tax-exempt—send us the payslip report you received by email at osakeyhtio@ukko.fi. This allows us to record the necessary information about the benefits paid in your company’s accounting.

If you report taxable benefits through Palkka.fi, your company will also have to pay the employer’s health insurance contribution on the benefits. In 2026, this contribution is 1.91% of the value of the benefit.

After paying this contribution to the Finnish Tax Administration, create a new expense in your UKKO customer account. Attach, for example, a screenshot from MyTax showing the payment under “Completed payments and refunds,” and match the bank transaction to the expense. This ensures that the health insurance contributions are correctly recorded in your company’s accounting.

No separate withholding tax is ever paid solely on benefits received by the entrepreneur without cash wages. Withholding tax may not exceed the amount of the payment made in cash under Section 11, Subsection 2 of the Prepayment Act. If wages are paid entirely in the form of benefits in kind, withholding tax cannot be withheld at all. The employer’s health insurance contribution must nevertheless be paid.

If an employee has received only a benefit in kind in a particular month but receives cash wages later in the same year, the benefit in kind must be taken into account as income when withholding tax is calculated on the cash wages paid later.

To avoid possible back taxes in your personal taxation, you should separately apply to the Finnish Tax Administration for additional tax prepayments on the portion represented by these benefits in kind.

You can obtain further information and instructions on applying for additional tax prepayments directly from the Finnish Tax Administration.

You can also consult the Finnish Tax Administration’s more detailed guidance on benefits in kind.
 

The most common benefits in kind

Housing benefit

You receive a housing benefit if, based on an employment or official position, you are provided with an apartment owned or rented by your employer. The value of the housing benefit consists of a fixed basic amount and an amount calculated per square meter. The location and size of the apartment affect the value of the housing benefit. For apartments located in Helsinki, the taxable value is also affected by the postal code area in which the apartment is located.

The taxable value of the housing benefit includes not only the housing itself but also water charges and the heating costs of an apartment heated with central heating or electric heating. Electricity costs unrelated to heating are not included in the monetary value of the housing benefit.

At present, housing benefits cannot be reported through our service. If you receive a housing benefit, you must prepare all payslips and reports yourself, for example through the Palkka.fi service.
 

Meal benefit

You receive a meal benefit if your employer provides you with a meal free of charge or at a price below its fair market value. An employer can arrange a meal benefit in several ways, including workplace catering, contract catering or designated payment instruments such as meal vouchers, applications or payment cards.
 

Car benefit

A car benefit arises if you or your family use a passenger car or van owned, leased or rented by the limited liability company for private driving. Private driving also includes journeys between your home and your workplace.

• An unlimited car benefit applies when the employer pays all costs related to the car.
• A limited car benefit applies when you pay at least the running costs yourself, such as fuel costs.

The monthly value of a car benefit consists of two parts:

• a basic value, calculated as a percentage of the car’s original purchase price; and
• running costs, calculated either as a monthly amount or as an amount per kilometer.

If the per-kilometer value is used, a driving log must be kept for private journeys.

The value of the car benefit is affected by the recommended retail price on the date of purchase, the year in which the car was first taken into use, additional equipment and the type of power source, such as whether the car is petrol-powered or electric. You can check the amount of the car benefit using the Finnish Tax Administration’s car benefit calculator.
 

Telephone benefit

You receive a telephone benefit if your employer pays for your telephone subscription. However, merely providing a telephone device purchased by the employer does not create a taxable benefit if the device was acquired primarily for work purposes. No benefit arises if you pay the costs of private calls yourself.

In 2025, the value of a mobile phone benefit is €20 per month. This covers the costs of domestic and international calls, text messages, multimedia messages and data connections. The benefit does not cover the use of a mobile phone as a means of payment, participation in collections or participation in premium-rate voting.
 

Employer-provided public transport ticket

An employer can support travel between your home and workplace by providing you with a public transport ticket. An employer-provided public transport ticket is tax-exempt up to €3,400.

This amount also includes any tax-exempt bicycle benefit of €1,200. Please note that, in your personal taxation, you cannot deduct commuting expenses for the part covered by a tax-exempt employer-provided public transport ticket.
 

Bicycle benefit

You receive a bicycle benefit if your employer provides you with a bicycle owned by the employer or acquired through a leasing agreement for your personal use.

The bicycle benefit is tax-exempt up to €1,200 per year if the employer and employee committed to introducing the bicycle benefit on or before April 23, 2025.

If the bicycle benefit was introduced on or after April 24, 2025, it will be a taxable benefit in kind for the employee as of the beginning of 2026. The benefit will be valued at its fair market value. The principles for calculating the fair market value are defined in the Finnish Tax Administration’s annual decision on benefits in kind.