Are You Planning to Keep Working Part-Time from Home? Take These Taxation and Employment Issues into Account
Many workplaces have transitioned from remote work to hybrid work over the course of this year. Expert work, in particular, is generally no longer tied to the office, but can be done flexibly with respect to time and place.
We put together a list of things to keep in mind about taxation and employment law when engaging in hybrid work in Finland.
Taxation Checklist for Employees
Automatic EUR 750 deduction for the production of income:
All wage and salary earners automatically receive a EUR 750 deduction for the production of income (for the 2021 tax year). If your expenses are higher than this, you can claim them in your tax return as expenses for the production of income.
If you work remotely, you are entitled to a workspace deduction: The workspace deduction can be made either based on a formula or based on actual expenses.
The formula-based workspace deduction is determined based on remote work days and was EUR 225–900 in the taxation for 2020.
It is worth making the deduction based on actual expenses if you work from home a great deal. If so, you can deduct, for example, the expenses from the furnishings and rental, lighting and heating of your workspace. When deducting actual expenses, you need to be able to present the Finnish Tax Administration with a description of the expenses and the related receipts on demand.
The tax treatment of work tool purchases depends on whether you bought the tools yourself or whether your employer bought them and either gifted or loaned them to you.
If you bought work tools, you can deduct the purchase, maintenance and repair costs as expenses for the production of income if the tools you bought are primarily used for work. You can deduct the expenses as a single deduction during the year of purchase if the purchase price does not exceed EUR 1,200/tool (2021 tax year) or as annual 25% depreciations if the purchase price of the tool is over EUR 1,200.
If you are loaning work tools from your employer, in other words the tools remain owned by your employer, they are a taxable benefit for you.
If you employer purchases work tools and gives ownership of them to you, the fair value of the tools is considered pay and your employer must notify the benefit to the income register.
Reimbursement of travel expenses:
If you are working from home part of the time, you can deduct your travel expenses between home and your workplace for the days on which you go to the workplace. There is a EUR 750 deductible for travel expenses between home and work. You can only claim travel expenses in your tax return to the extent they exceed EUR 750. Remember to deduct travel expenses according to the least expensive mode of transport.
The right to deduct the cost of a data connection depends on whether you or your employer has purchased the connection.
If you purchased the connection, you can deduct the connection as expenses for the production of income. If the connection is partially in work use, you can deduct 50% of the cost, and if it is used primarily for work, you can deduct the cost in full.
If your employer reimburses you for the cost of a data connection you have purchased, the compensation is taxable income both with respect to work and private use. In this situation, your employer will deduct withholding tax from the compensation.
If your employer purchases the data connection, the benefit is tax free for you both with respect to work and private use.
Employment Law Checklist for Employees
Agreeing on hybrid work with your employer:
Hybrid work is subject to the same rules as work performed at the workplace. Voluntary hybrid work does not necessarily require a separate employment agreement. Always follow the instructions your employer gives you regarding hybrid work.
Obligatory hybrid work:
As a rule, the place of employment agreed in the employment agreement is binding on the employer with respect to hybrid work, too. This means that the employer cannot in normal circumstances unilaterally make hybrid work an obligation for employees unless this has been agreed in the employment agreement.
Hybrid work and equal treatment:
Employees must be treated equally unless there is an acceptable cause for different treatment based on the duties and position of the employees. Thus, hybrid work instructions can be different in different positions as long as there is a clear reason for it. Such reasons can include the nature and contents of tasks as well as the type of work.
It is also possible to set limits for hybrid work. For example, your employer can require that there must always be a certain number of employees at the workplace or forbid hybrid work if an employee refuses to comply with instructions.
It is always recommended to negotiate and make a written agreement with your employer on working abroad. It important for both you and your employer to confirm in advance how social security is determined while working abroad, i.e. which country's social security provisions apply to the remote work.
Occupational safety and health and coping with work:
Hybrid work highlights the employee’s own responsibility to ensure, for example, sufficient rest time. The employer should also have discussions with employees to remind them to look after their wellbeing.
The employment accidents insurance taken out by your employer also applies to work performed outside the workplace, but in remote work it is more tied to the work space than at the actual workplace. If necessary, you or your employer should supplement the statutory accident insurance with a voluntary insurance policy.