The benefits paid by the Unemployment Fund are considered taxable income. The Fund receives almost all its member’s tax rates for wage income from the Finnish Tax Administration at the beginning of each tax year. If you have joined the Fund midway through the year or have a revised tax card, please send a copy of your tax card to the Fund.
Tax cards will come into effect on January 1st from 2025 onwards and the tax card’s income ceiling will be calculated for the whole year (12 months).
As instructed by the Finnish Tax Administration, the tax rate for earnings-related daily allowance is always at least 25 % if a tax card for wages is used.
If you have a revised tax card for benefits, send your tax card to the Fund. Then the Fund can withhold your taxes based on the rate on the revised tax card without increasing the tax rate.
You can order a revised tax card for benefits through the Finnish Tax Administration’s MyTax service. If you select The Unemployment Fund for Higher Educated Employees Erko as the payor of your benefit, the Tax Administration can electronically send your revised tax card directly to the Fund.
The Unemployment Fund informs the Finnish Tax Administration of the benefits you have been paid as well as the tax withheld from these benefits.
You can find more information about the taxation of benefits on the Finnish Tax Administration’s website.
The information above concerns the taxation of earnings-related daily allowance and commuting and relocation allowance.
Taxation of transition security allowance
Transition security allowance is taxable income that is taxed based on the additional withholding rate of your tax card for wages. If you submit a revised tax card for benefits before the payment of your transition security allowance, we will use the tax rate on your tax card for benefits (taking into account the income ceiling).
Changes to how tax cards come into effect beginning 1.1.2025
Until 2024 tax cards have come into effect at the beginning of February (1.2.) and the taxation for January has been based on the tax percent of the prior year’s tax card. Beginning 1.1.2025 tax cards will come into effect immediately at the beginning of January (1.1.) and the tax card’s income ceilings will be calculated based on your income for the whole year. Following your tax card’s income ceiling will become easier because of this change.