Claiming Your Daily Allowance & Deductions: A Quick Guide for Freelancers in Finland
This guide will walk you through exactly how Päiväraha works, the 2025 rates, and how to use Palkkaguru’s platform to handle both allowances and receipts effortlessly.
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As a freelancer or light entrepreneur (kevytyrittäjä), you are your own boss, HR department, and finance team.
This means you are responsible for tracking the perks that belong to you—specifically, tax-free allowances and expense deductions.
One of the most valuable benefits in Finland is the Daily Allowance (Päiväraha). It is not just "extra money"; it is a tax-free reimbursement designed to cover the increased cost of living when you are working away from home. Additionally, properly claiming Deductions (Kulut) for materials and tickets can significantly lower your taxes.
This guide will walk you through exactly how Päiväraha works, the 2025 rates, and how to use Palkkaguru’s platform to handle both allowances and receipts effortlessly.
What is a Daily Allowance (Päiväraha)?
In the Finnish tax system, a daily allowance is a tax-free payment meant to compensate you for meal costs and other incidental expenses when you travel for work.
For Palkkaguru Users: You don't just "deduct" this on a tax form next year. Instead, if your client pays enough to cover your fees, Palkkaguru can pay this portion of your income to you without withholding any tax.
Example: You invoice €1000. You lay claim to €53 in daily allowances. Palkkaguru processes the €53 to you tax-free, and calculates tax only on the remaining taxable salary.
The Golden Rules: When Can You Claim It?
You cannot claim a daily allowance for working at a café down the street. The Finnish Tax Administration (Verohallinto) has strict rules:
The "Distance Rule" (15 km)
To qualify, your work trip destination must be:
Over 15 km away from your home, AND
Over 15 km away from your primary workplace.
The "Time Rule" (6 hours / 10 hours)
The duration of the trip determines how much you get. The clock starts when you leave your home/office and stops when you return.
The Rates (2025 Estimates*)
Rates are confirmed annually by Verohallinto. Below are the standard rates typically applied.
Beyond Allowances: Expense Deductions with Palkkaguru
While Daily Allowances are for meals/travel time, Deductions (Vähennykset) are for the actual money you spent on work-related items. Palkkaguru’s platform allows you to submit these easily to reduce your taxable income.
According to Palkkaguru’s guidelines, there are three main categories you can handle directly in the platform:
Work-Related Purchases: Did you buy software, tools, or professional literature? You can upload these receipts to Palkkaguru.
Travel Costs (Tickets): Train, bus, or plane tickets are deductible. (Note: Use the Kilometer Allowance if driving your own car).
Service Fees: Palkkaguru’s own service fee is automatically deducted from your taxable income—you don't need to do anything for this!
How it helps you: By submitting these expenses, you lower the amount of "salary" you pay tax on. If the expense is billed to the client (e.g., they agreed to pay for your train ticket), Palkkaguru can reimburse you 100% tax-free.
Step-by-Step: How to Claim with Palkkaguru
Using a service like Palkkaguru makes this much safer because we automatically check the compliance for you.
Step 1: Check Your Eligibility Did you travel >15km? Did the trip last >6h? Do you have a receipt for materials?
Step 2: Log the Details in the Dashboard Log in to your Palkkaguru account.
For Allowances: Enter the Start/End time and Destination. The system calculates the standard Päiväraha.
For Receipts: Navigate to the expenses section and upload a photo of your receipt (e.g., train ticket or laptop purchase).
Step 3: Reimbursement Palkkaguru verifies the claim.
Allowances: Paid to you tax-free.
Billed Expenses: Paid to you tax-free (if the client pays for them).
Non-Billed Expenses: Deducted from your taxable income, lowering your tax rate.
Common Mistakes in Finland
Mistake #1: Double Dipping with Receipts. You generally cannot claim the Daily Allowance and expense your lunch receipt. The allowance is meant to cover the lunch. Choose one (usually the allowance is higher than a standard lunch cost).
Mistake #2: Confusing Commuting with Travel. Driving from your home to your regular office is commuting, not business travel. Business travel is irregular work at a temporary location.
Mistake #3: Ignoring the "Meal Money" (Ateriakorvaus). If your trip is work-related but doesn't meet the time/distance limits for Daily Allowance, you might still qualify for Ateriakorvaus (~€12.75) if you couldn't eat your usual meal during a break.
Next Steps: Start Tracking Today
Every missed allowance or lost receipt is basically donating money to the taxman. Maximize your income. Claim what’s yours with Palkkaguru!
Login to Palkkaguru: It’s the easiest way to log start/stop times and snap photos of receipts in real-time.
Review Last Month: Did you visit a client in another city? You might still be able to claim it retroactively if the invoice hasn't been processed yet.
Ask Us: If you aren't sure if a purchase is deductible, our chat support can clarify the Vero rules for you in seconds.
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