Taxation of earnings-related unemployment allowance
Unemployment allowance is taxed differently than your salary as it is a benefit.
According to the Tax Administration’s guidelines, the Unemployment Fund always deducts at least 25% in tax if the tax percentage reported to the fund is for wages and salaries. Your withholding percentage rate will not necessarily be lower, although the social benefits you receive are smaller than your previous pay. This is due to the fact that benefits are not subject to the same tax-deductions as earned income.
If you want to change your tax percentage, you must order a revised tax card for benefits from the Tax Administration. The easiest way to order a tax card for benefits from MyTax. You can find instructions here. Choose ‘Palvelualojen työttömyyskassa’ as the payer of the benefit. This way the Fund receives your revised tax percentage for benefits electronically on the following day. After that the tax deduction will be made based on the percentage on the revised tax card for benefits.
There is no need to send us a copy of your revised tax card.
Make sure that the revised tax card is for benefits. If you send us a revised tax card for wages, the deduction will still be minimum 25 %.
The fund receives tax information directly from the Tax Administration
The Unemployment Fund receives taxation details directly from the Tax Administration at the start of the year. The new tax percentages are used from the start of February. The previous year’s tax percentages are used for earnings-related unemployment allowances paid in January.
The Unemployment Fund has received taxation details for the year 2021 from the Tax Administration. In the Fund’s e-service your tax percentage is at least 25 % if you haven’t received a revised tax card for benefits. The annual income ceiling visible in the e-service it the Tax Administration’s estimate about your income ceiling for earnings-related unemployment benefit. It is based on your salary estimate visible in your tax card. This means that your income ceiling for benefits online is different from your income ceiling in your tax card.
You can read more the taxation of unemployment benefits on the Tax Administration’s website.