Withholding tax on benefits

Earnings-related daily
allowance, job alternation compensation and mobility allowance are taxable
income.  The Tax Administration provides
the fund with our members’ salary withholding tax information from 1 February.
You do not need to send the tax card you receive to the fund.

You can obtain a separate
revised tax card for benefits. If a tax card for the taxation of benefits is
not available, tax will be withheld in accordance with the Tax Administration’s
guidelines for withholding tax on benefits using a tax card intended for the
taxation of wages. The withholding tax rate is always at least 25% when using a
tax card for wages, even if the tax rate indicated on the tax card is lower.

Why does the tax information in Openetti differ from the information on
my tax card?

In 2021, the Tax
Administration changed its practices related to the transfer of tax information
to unemployment funds and other payers of benefits. Currently, if a person does
not have a valid tax card for benefits the Tax Administration automatically
reports the withholding tax rate as 25 percent. Previously, the information
reported by the Tax Administration was always the same as the information
indicated on the tax card, but tax was withheld at a rate of 25 percent when
using a tax card intended for wages.

The Tax Administration reports
the annual income threshold to the unemployment fund by sending an estimate of
the income threshold for your earnings-related daily allowance. The estimate is
based on the estimated earnings indicated on your tax card, and
earnings-related daily allowance is generally approximately 60 percent of your
earnings.

Revised tax card for benefits

If you wish, you can order a
new revised tax card for benefits, and tax will be withheld according to the
rate indicated on this tax card. You can order a revised tax card for benefits
from the Tax Administration’s online tax service MyTax. In the service, select
‘Teachers’ Unemployment Fund’ as the payer of the benefit, and your tax card
information will be automatically received by the fund, usually on the next
working day at the earliest. The new tax card will be applied starting from the
next payment after we have received the tax card.

Further information from the Tax Administration

This new practice related to
the transfer of tax information was introduced by the Tax Administration and
information about the practice and other matters related to taxation is
available at www.vero.fi.