Tax-free allowances, what an invoicing service can actually pay

What a tax-free allowance is

A tax-free reimbursement of travel costs covers a real expense of doing the work, with no tax withheld and no side costs paid. It is not wages and it is not a deduction. It is the cost coming back to you in full.

The difference is large. A thousand euros paid as wages leaves considerably less after withholding than a hundred-euro travel cost reimbursed separately and tax-free.

The 2026 amounts

Maximum amounts under the Tax Administration’s cost decision, domestic business travel:

For any daily allowance the destination must be more than 15 kilometres from where the trip starts, either your regular workplace or your home.

Tickets, taxis and accommodation are reimbursed at actual cost against a receipt; there is no fixed ceiling on those.

The amounts are updated annually. These were checked against the Tax Administration’s 2026 cost decision.

Through an invoicing service the conditions are stricter

This is the part most pages leave out. The Tax Administration has separate guidance on travel allowances paid by invoicing service companies, and under it five conditions must be met at once:

1. The payment is made as wages. The invoicing service and the person doing the work must have agreed that the compensation is paid as wages.
2. There is a written agreement with the client. It must set out which travel costs are covered and whether they are paid separately or included in the total fee.
3. The invoicing service must be able to show what was agreed. In practice that means a written or electronic contract, an oral agreement cannot be verified.
4. The allowance stays within the cost decision. The maximum amounts, durations and distances in the table above.
5. Payment is based on a proper travel expense report. As required by section 17 of the Prepayment Decree, and the invoicing service checks it.

Responsibility sits with the invoicing service exactly as it would with an employer. That is why we ask for the agreement and the travel report: not as paperwork, but because without them the allowance cannot lawfully be paid tax-free.

The meal allowance drops out for most people

This differs from what many assume, and it is worth reading in full.

Someone working through an invoicing service has an assignment contract with the client, not an employment relationship under the Employment Contracts Act. No statutory meal break arises, so the basic condition for a tax-free meal allowance is not satisfied. On the Tax Administration’s guidance, an invoicing service therefore cannot pay a meal allowance tax-free to an ordinary work performer, whatever has been agreed with the client.

The exception is the special sectors. In construction, earthmoving and forestry the meal allowance can be paid tax-free, provided the written agreement and travel report are in order and the person has no access to employer-arranged meals at the workplace.

If you have read elsewhere that a light entrepreneur gets a meal allowance “under certain conditions”, this is the condition.

What cannot be reimbursed tax-free

• Travel between home and your regular workplace. It is commuting, and commuting is not a tax-free allowance.
• An allowance with no travel report. Receipts and the report are a condition, not a formality.
• Anything above the cost decision’s limits. The excess is wages and is taxed as wages.
• A trip that was not made, or whose account is not plausible.
• A meal allowance outside the special sectors, for the reason above.

What about tools and supplies

Software licences, specialist materials and tool rentals are not travel allowances. The usual route is for the client to pay the purchase directly: it then never passes through you as wages and nothing is withheld from it.

If the purchase has already gone through you, it is not a tax-free allowance but an income-production deduction in your own taxation.

How it works in practice

1. Agree in writing with your client which travel costs are covered.
2. Make the trip and keep the receipts.
3. Fill in the travel report: dates, times, destination, kilometres, purpose.
4. Attach the travel report to the invoice in the service.
5. The allowance is paid to you tax-free once the conditions are met.

If a condition is not met we tell you before the payment rather than after. An allowance marked tax-free that isn’t becomes both parties’ problem later.

If your own trip is a borderline case, get in touch before the invoice goes out and we will go through the conditions with you.

Sources

• Tax Administration decision on tax-exempt allowances for travel expenses in 2026 (vero.fi, checked 22.9.2026)
• Tax Administration guidance: travel expense reimbursements paid by invoicing service companies (vero.fi, checked 22.9.2026)