Taxation of earnings-related unemployment allowance
You may need a new tax card for benefits when you start receiving earnings-related unemployment allowance.
If you haven't ordered a revised tax card for benefits, the Unemployment Fund deducts at least 25 % in tax from your earnings-related allowance. We advice our members to order a tax card for benefits. Take note that if you send us a revised tax card for wages, the deduction will still be minimum 25 %.
The easiest way to order a tax card for benefits from MyTax. You can find instructions here. When you choose Palvelualojen työttömyyskassa as the payer of the benefits when ordering a new tax card, we receive your new tax percentage on the following day electronically from the Tax Authority. There is no need to send us a copy of your tax card.
Although the unemployment allowance you receive is smaller than your previous wage, your withholding percentage rate will not necessarily be lower. This is due to the fact that benefits are not subject to the same tax-deductions as earned income. Earnings-related unemployment allowance is taxed according to the Tax Administration's guidelines.
The Unemployment Fund receives tax details directly from the Tax Administration in the beginning of the year for members that are currently receiving unemployment benefits. The new tax percentages are applied from the start of February. Previous year’s tax percentages are still applied to earnings-related unemployment allowances paid in January.