Mileage allowances and car reimbursement rates in Finland (2024)

Finland, also known as the land of a thousand lakes, is a beautiful country to drive through. For those driving for work-related reasons, we’ve got some good news. Like in many other European countries, employees using their own car for business trips can claim a tax-free reimbursement from their employer to cover travel expenses.

It might seem like a complicated process, but in practice it’s pretty simple. In this article, we’ll run through the Finnish system—from fuel rates to meal money to types of motor vehicle permitted.

How does mileage allowance work in Finland?

Mileage allowance is essentially the amount employees are allowed to claim to cover travel costs including fuel, insurance, and road tax, and the general wear and tear of their own vehicle while carrying out a business-related journey. The amount paid is tax deductible for the business—so long as it falls within government guidelines.

Whilst most countries in Europe have a compensation scheme for employees using their private vehicles for work trips, each country has its own specificities and conditions. From Slovakia to Switzerland, approved mileage often depends on vehicle used and distance covered, while the minimum and maximum allowances will vary from country to country.

With huge potential to benefit both employers and employees, it’s important to know exactly how the system works in the country your employees are travelling in. Finnish employers want to avoid a shock at the end of the tax year, and their employees want to feel calm and organised while travelling for business.

Let’s look at the ins and outs of Finnish mileage allowance.

Interested in comparing mileage allowance in Scandinavia? Check out our guide to mileage allowance in Denmark.

What are the mileage allowance rates in Finland in 2024?

In Finland, if you use a private car, the ‘base’ rate of reimbursement is €0.33 per kilometre.

According to the Finnish tax agency, a work trip or business trip means temporary travelling connected with your work duties The destination must be a place where you carry out work temporarily, for example exhibitions, trade fairs, conventions or training courses.

The tax rules state that if your presence and your work exceeds three years, it will no longer be considered temporary, and therefore no employer-employee reimbursements will be considered tax-deductible.

Employer-provided reimbursements cause no income taxes for employees if the amount does not exceed government guidelines, established in Finland each year by the Decision of the Tax Administration on tax-exempt allowances for travel expenses.

Here are some considerations to bear in mind:

If your business trip requires you to tow a trailer, the rate goes up by 10 cents, up from 9 cents in 2023.

If you give a ride to other people for whose transportation the employer is responsible, the rate is increased by 4 cents per km covered, and per passenger present.

If you have a company car, you will be eligible for a kilometre allowance exclusively if you are using a limited-type company car (käyttöetu; förmån att använda bil). Using one of these limited-type vehicles, you can claim 13 cents of kilometre allowance.

If the employer reimburses none of your travel or only pays you partial reimbursements, you can claim tax deductions for the part of the expenses you paid which were left unreimbursed.

Working out how to write a car allowance policy? Check out our guide.

Commuting allowances in Finland

Even within Europe, there is a wide disparity in commuting allowances. While some countries, for example the United Kingdom or Spain, do not reimburse commuter trips of any kind, others such as Denmark and Sweden do.

Finland sits in the middle: commuters can claim expenses by the least expensive means of transportation but if you drive to work, your car expenses are not deductible unless specific conditions apply.

These conditions are:

No public transport available

The nearest bus stop or train station is at least a 3km walk away

The waiting time (this does not mean travel time) during the round-trip commute would be at least 2 hours

You leave home or return from work between midnight and 5am

If you are entitled to your own car for commuting purposes, the 2024 tax legislation states that the maximum amount you can deduct is €0.28/km if you drive your own car, and €0.21/km if you drive a company car.

It’s important to note for tax reasons that these reasons are not accepted for claiming a travel allowance.

Driving to work is faster than public transport

You need to drop your children at school on your way to work

You need the car during the day in order to perform some job duties

Here are the rates for commutes using other means of transport:

Moped: €0.11/km

Motorcycle: €0.20/km

Bicycle (including e-bikes): €100.00 per year

Mileage tax deduction for self-employed workers

If you’re a freelancer, entrepreneur or self-employed operating under a business name, you cannot reimburse yourself for tax-free deductions for travel expenses.

However, while filing your tax returns you’ll find that you can claim deductions of relevant expenses—and your travel costs may fall under these categories.

For example, driving your own vehicle for work-related purposes may entitle you to an extra deduction (lisävähennys) which is applicable to self-employed workers. The maximum value of this deduction is the same as the maximum per diem that would be paid to an employee earning wages.

More information on working out travel deductions while filing a tax return can be found in Form 5.

Per diems in Finland for 2024

What is a per diem? Essentially, a per diem allowance refers to a sum of money that an employee can claim (tax-free) from their employer to cover living expenses and travel costs while completing an overnight work journey. It usually includes meal allowances, accommodation costs, and other necessary expenses.

In Finland, employer is able to grant tax-free daily allowance if they meet these two criteria:

The temporary place of employment is over 15 km away from the employee’s main or regular workplace or home (depending on where the business trip starts) and more than 5 kilometres from both

The travelling allowance does not exceed the maximum amount defined by the Finnish Tax Administration. While employers can choose to pay a higher amount, the excess exceeding the maximum amount will count as taxable income.

Here are Finland’s per diem rates for 2024:

Duration of the trip

Maximum tax-free per diem (2024)

Maximum tax-free per diem (2023)

Over 6 hours (partial amount)

€24

€22

Over 10 hours (full amount)

€51

€48

If travel time exceeds the last full day of travel by at least two hours

€24

€22

By more than six hours

€51

€48

Source

It’s also important to remember (employers, listen up!) that for any day of travel where the employee receives free meals, the maximum per diem is half the amount specified above. ‘Free meals’ is understood to mean two free meals during full per diem—and one free meal in the case of a partial per diem.

What is not included in the mileage allowance?

Not included in the mileage allowance are any trips carried out for reasons not directly related to the employee’s role in the company, as per the labour contract. Not included are personal or (relevant) company errands, or trips made outside working hours, for example at the weekend.

How can I file a mileage allowance claim in Finland?

If you’re an employee, your mileage allowance claims are usually handled internally.

On the other hand, if you’re self-employed and you receive wages, you can claim the deductions on a paper form at the end of the tax year by submitting Form 1D – Travel, deductible as expenses for the production of income. However, if you’re self-employed and you receive trade income, you can submit Form 50A – Earned income and deductions on paper.

A more popular option is to submit your claims via MyTax, the Finnish tax portal, entering the deductible amounts under ‘Expenses’ for the production of income (excluding wages and salary).

Streamline travel expenses with TravelPerk's business travel management platform

Now you’re familiar with the mileage reimbursement system in Finland, it’s time to plan your journeys. One of the best ways to manage corporate travel expenses is by using a dedicated business travel management platform—like TravelPerk—to keep a tight grip on both employee movements and company costs.

Choosing from the vast selection of third-party integrations offered by TravelPerk, including firm favourites like Ramp and Spendesk, you can rest easy knowing your company travel is under control. Now you’re ready to drive around Finland!

Mileage allowances and car reimbursement rates in Finland (2024)

How does mileage allowance work in Finland?

What are the mileage allowance rates in Finland in 2024?

Commuting allowances in Finland

Mileage tax deduction for self-employed workers

Per diems in Finland for 2024

What is not included in the mileage allowance?

How can I file a mileage allowance claim in Finland?

Streamline travel expenses with TravelPerk's business travel management platform

See how to save your company time and money on business travel management.

Make business travel simpler. Forever.

Per Diem Rates in Czech Republic: A Guide for Business Travel (2024)

Per diem rates in Switzerland: a brief guide (2024)

Per diem rates in Germany: a brief guide (2024)

SOLUTION

RESOURCES

ABOUT

CONTACT