Processing and Reporting a Salary Advance

A salary advance is an ordinary salary payment for accounting purposes that is paid before the official payday. For tax purposes, a salary advance is therefore treated as ordinary salary. The employer must withhold tax and pay the applicable employer contributions when the salary advance is paid, as well as submit the required reports within five days of the salary advance payment date.

If you pay yourself a salary advance without creating an official salary in your UKKO customer account, you are responsible for submitting the required reports yourself. You must also take the salary advance into account when creating a salary in our service.

For this reason, we recommend that if you want to pay yourself a salary advance, you create a regular salary in your customer account for the desired gross amount. This way, we will take care of all the required salary reports, and you do not have to submit them yourself.

In our service, you can create as many salaries as you wish for yourself as the owner-entrepreneur during the same month. For example, you can create both a salary advance and a regular salary during the same month, using the gross amounts you choose.

If you still want to pay yourself a salary advance, follow the instructions below.
 

If you have not yet paid yourself a salary advance

• If you want to pay yourself a salary advance, we recommend creating a completely new salary in your UKKO customer account. Enter the gross amount of the salary advance and set the payday to the date of salary creation or a later date. The service does not allow you to report a salary with a payment date in the past.
  • Salary advance payment: An expense voucher will be automatically created in your customer account, with the payroll report attached. Pay the salary advance to yourself on the agreed payday and match the account transaction with the salary expense by marking the salary as paid.
  • Employer contributions for the salary: An expense voucher will be automatically created in your customer account for the employer contributions, such as withholding tax and the employer’s health insurance contribution. The payment details will be attached to the voucher. The employer contributions must be paid directly to the Finnish Tax Administration by the 12th day of the month following the salary payment month.
• Regular salary calculation in your UKKO customer account:
  • Enter the gross salary after deducting the gross amount of the salary advance that has already been paid. Do not enter the salary advance separately in this case, because withholding tax and the employer’s health insurance contribution have already been paid on it. The regular salary calculation should therefore only cover the gross amount of the remaining salary: the original gross salary minus the gross amount of the salary advance.
  • An expense voucher will be automatically created in your customer account for the remaining salary to be paid, with the payroll report attached. Pay the salary to yourself on the agreed payday and match the account transaction with the salary expense by marking the salary as paid.
  • An expense voucher will be automatically created in your customer account for the employer contributions on the regular salary, such as withholding tax and the employer’s health insurance contribution. The payment details will be attached to the voucher. The employer contributions must be paid directly to the Finnish Tax Administration by the 12th day of the month following the salary payment month.
     

If you have already paid yourself a salary advance

• A separate earnings payment report must be submitted to the Incomes Register for the salary advance.
  • You must submit the report yourself, for example through the palkka.fi service. The report must be submitted within five days of the payment date.
  • Withholding tax and the employer’s health insurance contribution must be paid when the salary advance is paid. You will receive the required information and amounts from the payroll service you use when reporting the salary advance, such as palkka.fi.
  • Salary advance payment: Create a new expense in your customer account and attach the payroll report you received for the salary advance.
  • Enter the payroll period for which the salary advance was paid in the expense description field.
  • Match the account transaction for the salary advance you paid yourself with the expense you created, and mark the expense as paid.
  • If you have paid several salary advances during the same month, you must submit a separate report to the Incomes Register for each payment and create a separate expense for each salary advance.
  • Employer contributions paid on the salary advance: Create a new expense in your customer account and attach the receipt for the employer contributions or the payroll report you received for the salary advance. Match the account transaction for the payment made to the Finnish Tax Administration with the expense in your customer account, and mark the expense as paid.
  • You must create a separate expense in your customer account for the employer contributions related to each salary advance.
• Regular salary calculation in your UKKO customer account:
  • Enter the gross salary after deducting the gross amount of the salary advance that has already been paid. Do not enter the salary advance separately in this case, because withholding tax and the employer’s health insurance contribution have already been paid on it. The regular salary calculation should therefore only cover the gross amount of the remaining salary: the original gross salary minus the gross amount of the salary advance.
  • An expense voucher will be automatically created in your customer account for the remaining salary to be paid, with the payroll report attached. Pay the salary to yourself on the agreed payday and match the account transaction with the salary expense by marking the salary as paid.
  • An expense voucher will be automatically created in your customer account for the employer contributions on the regular salary, such as withholding tax and the employer’s health insurance contribution. The payment details will be attached to the voucher. The employer contributions must be paid directly to the Finnish Tax Administration by the 12th day of the month following the salary payment month.

Please note that if you have reported the salary advance yourself through the palkka.fi service, you are also responsible for ensuring that the Incomes Register report for the relevant month is correct. The Incomes Register cannot receive reports from two different sources, such as UKKO.fi and palkka.fi, and combine them into one total. If necessary, you must correct the report so that it corresponds to the actual total amounts.

You can create and pay any number of salaries per month in your UKKO customer account.

For this reason, we recommend that you always create a completely new salary in your customer account for salary advances as well. This ensures that the required official reports are submitted correctly and on time, so you do not have to take care of them yourself.

You must create the salary in your customer account no later than on the payment date. The service does not allow you to create a salary with a payment date in the past.