Travel claim: mandatory details, tax-exempt allowances and the driving log

In brief

• A tax-exempt reimbursement requires both a work trip as the tax rules define it and a travel claim containing the details required by section 17 of the Prepayment Decree.
• A partial per diem requires a trip of more than six hours and a full per diem one of more than ten hours, counted from the moment of departure to the moment of return.
• The destination has to be more than 15 kilometres from the place of departure and more than 5 kilometres from the home, the work-related dwelling and the places of work.
• The travel claim with its attachments is an accounting voucher, and it is kept for six years from the end of the year in which the financial period ended.

A tax-exempt reimbursement of travel expenses requires two things at once: the trip has to be a work trip as the tax rules define it, and the employee has to give the employer a travel claim containing the details required by section 17 of the Prepayment Decree. If either is missing, the reimbursement is taxable pay. The conditions for the per diem and the kilometre allowance are hours, kilometres and clock times.

The three conditions for a work trip in taxation

Under point 5.1 of the Finnish Tax Administration guidance, a work trip is a trip that the employee (in tax legislation, the wage earner) makes temporarily in order to carry out duties belonging to the work at a special place of work. Three conditions apply at the same time:

1. The trip is made in order to carry out work duties.
2. The trip is made to a special place of work.
3. The trip is temporary.

Trips made because of work duties include trips to meetings, to representation and to training, and to the staff’s joint recreational and workplace-community events. Leisure trips and trips relating to private matters fall outside.

The concepts come from the Income Tax Act. The primary place of work is the place where the employee works permanently, for example the employer’s office, business premises or industrial hall (point 3.1 of the guidance). A special place of work is a place where they do not work permanently: another place of business of the employer, a customer’s place of business, or a trade-fair, training or meeting venue they visit occasionally (point 5.2.1 of the guidance). A secondary place of work is a permanent place of business, in another locality, of the employer or of an entity in the same group of interests, where the employee works regularly (point 4.1 of the guidance).

The second condition also rules out the most ordinary trip of everyday life: travel between the home and the primary place of work is not directed to a special place of work, so it is the employee’s own trip and no tax-exempt allowance is paid for it.

When a work trip begins and ends

Point 5.4 of the guidance names the places a work trip can begin from and end at: the primary place of work, the home, a work-related dwelling, and the secondary place of work or accommodation acquired for it. The trip begins when the employee leaves one of these for a special place of work, and ends when they return to one of them.

The order matters. If the employee first goes from home to their primary place of work and continues from there to the special place of work, the work trip begins at the primary place of work. The first leg of the morning falls outside the trip, and the duration that counts towards the per diem starts only when they leave the office.

The trip is not broken, however, if the employee calls at their primary place of work in the middle of a work trip only to change tools, collect new work orders or carry out another similar short task. The guidance speaks of a stop of about an hour. A visit to one’s own office between two customer calls therefore leaves the travel day unbroken.

Mandatory details on a travel claim

Under section 17 of the Prepayment Decree, the employee has to give the employer an account – that is, a travel claim – so that the reimbursement can be paid without withholding tax. Under point 13 of the guidance, the travel claim may be drawn up with an electronic application when it contains the details specified in the decree. The travel claim must show:

• The purpose of the trip. Which work duty the trip was made for.
• The destination. The address, not just the locality or the customer’s name.
• The route, where it is needed.
• The mode of transport, that is, the vehicle used.
• The times the trip began and ended, both the dates and the clock times.
• For trips abroad, the country or area in which the travel day ended abroad.
• The numbers of kilometres and the unit prices, when reimbursement is paid for a trip made with a vehicle the employee owns or possesses.
• Receipts or other documentation as attachments.

The clock times determine whether the duration condition for the per diem is met, so without them the travel claim cannot be approved.

Conditions for the per diem: duration and distance

Domestic partial daily allowance requires a business trip longer than six hours, and full allowance longer than ten hours. The distance conditions must also be met. Foreign daily allowances follow separate rules and country-specific amounts.

There are likewise two distance conditions, and both have to be met:

• The special place of work has to be more than 15 kilometres from the place the trip was made from – the home, the work-related dwelling, or the primary or secondary place of work – along the shortest route.
• The special place of work has in addition to be more than 5 kilometres from all of the places listed above.

The five-kilometre distance conditions must also be met: a destination close to home or the regular workplace does not qualify for tax-free daily allowance merely because the trip is long or starts far away. This does not itself exclude mileage reimbursement, which has separate conditions.

Crossing a municipal boundary is not a condition for the per diem. What counts are the kilometres and the hours, not administrative boundaries.

On a trip lasting more than 24 hours, the per diem is determined per travel day. A travel day is a 24-hour period from the moment of departure. For the last incomplete travel day, a partial per diem is paid when the trip exceeds the last full 24-hour period by at least two hours, and a full per diem if the incomplete period is more than six hours.

Free meals halve the per diem

Under point 8.3.3 of the guidance, the full per diem is halved when the employee receives two or more free meals during the work trip. The partial per diem is halved by a single free meal.

A free meal means a meal arranged or paid for by the employer in connection with the work trip. Such a meal is, for example, the catering at a customer meeting, a meal included in the price of a training course or a course package, and a meal included in the price of a travel ticket. A meal paid for with a lunch voucher falls outside this and does not affect the per diem.

The guidance puts the responsibility on the employee: free meals have to be taken into account on the employee’s own initiative when the travel claim is made. The approver rarely sees the catering anywhere else, so the travel claim has to have a place where the meals are recorded.

Kilometre allowance for a privately owned car

The Tax Administration confirms the amount of the tax-exempt kilometre allowance separately for a car the employee owns or possesses and for a car provided as a usage benefit (point 8.2.3 of the guidance). The kilometre allowance for one’s own car can also be paid when the work drives are made with a family member’s or an acquaintance’s car; what matters is that the car is not provided by the employer.

When reimbursement is paid for a work trip made with a vehicle the employee owns or possesses, section 17 of the Prepayment Decree requires that, in addition to the other details, the travel claim record the numbers of kilometres used as the basis for the allowances and the unit prices. The total sum alone does not meet the requirement: the claim has to show how many kilometres were driven and at what unit price.

The driving log as the basis for kilometre allowances

A driving log helps itemise trips by date, route, kilometres and purpose. The same breakdown can be included directly in the expense claim. What matters is that the reimbursement basis can be checked; the data need not be recorded in two documents.

The outbound and return legs are recorded as their own rows or as one return-trip row, depending on which matches the distance actually driven. The sum of the kilometres is the same figure that ends up on the travel claim as the basis for the allowance.

The driving log under section 31 of the Working Hours Act is a different thing. It is a personal log given to the driver of a motor vehicle for keeping track of daily working hours, and the times when working and rest periods and breaks begin and end are recorded in it. It is kept for a year. The driving log for kilometre allowances serves taxation and accounting, and its entries are different ones.

Receipts and an expense without a receipt

The receipts or other documentation on the basis of which the employer pays the allowances are attached to the travel claim (section 17 of the Prepayment Decree). Point 13 of the guidance names a hotel bill and train tickets as examples; for an electronic flight ticket, a confirmation showing the price will do as the attachment.

For expenses for which no receipt is available – the guidance mentions a parking fee – the employee attests the amount as correct with a signed travel claim. An electronic signature is enough. This is the same arrangement that chapter 2, section 5 of the Accounting Act provides for: when no receipt from an outside party is available as the basis for an entry, the entry is verified with a receipt drawn up by the accounting entity itself and duly authenticated.

The Tax Administration’s decision sets the ceiling, the terms of employment the duty to pay

The Tax Administration’s annual decision sets the maximum tax-free reimbursements. The employer’s payment duty is determined separately by the collective agreement, employment contract and other binding employment terms. The following options are available only within those terms:

• The employer may pay less than the decision confirms.
• The employer may apply stricter conditions than the decision, for example require a receipt where an attestation would be enough.
• If the employer pays more, the excess is taxable pay for the employee.

The duty to pay itself arises from the employment contract or the collective agreement, not from the tax decision. The decision only says up to which limit a paid allowance is tax-exempt. The amounts in force are in the Tax Administration’s decision on tax-exempt allowances, which is in this guide’s list of sources.

A travel claim is an accounting voucher

A paid allowance is entered in the accounts, and under chapter 2, section 5 of the Accounting Act the entry has to be based on a dated and systematically numbered voucher, or on a voucher itemised in a corresponding way, that verifies the business transaction. The connection between the business transaction, the voucher and the entry has to be verifiable without difficulty. The travel claim with its attachments is that voucher.

The retention time is set by chapter 2, section 10 of the Accounting Act: the vouchers of a financial period are kept for at least six years from the end of the year in which the financial period ended. The same time applies to the attachments of travel claims and to the driving log, to the extent that they verify an entry.

Example: a one-day customer visit

The employee lives in Tampere, their primary place of work is the Tampere office and the customer’s site is in Jyväskylä. They drive their own car.

The work trip begins at 07:35 at the primary place of work, because the employee called in there before setting off for the destination, and ends at 18:50 at home. The duration is 11 hours 15 minutes. The destination is 150 kilometres from the place of departure and at the same time more than five kilometres from both the home and the primary place of work, so both distance conditions are met. There is one free meal.

Outcome: a full per diem at the full amount. The duration exceeds ten hours, and one free meal does not halve the full per diem. The kilometre allowance is paid for 305 kilometres (150 + 155); the morning’s 15 kilometres from home to the office fall outside the allowance, because that is travel to the primary place of work.

The same day with a few changes:

Example: a trip that runs past 24 hours

The employee leaves their primary place of work on Tuesday at 08:15 for a three-day installation job and comes home on Thursday at 15:40. Travel days are counted in 24-hour periods from the moment of departure.

The final incomplete travel day depends on its duration. Returning on Thursday at 12:30 would leave 4 hours 15 minutes and qualify for partial allowance. For domestic travel, the threshold is at least two hours for partial allowance and more than six for full allowance. The example’s 15:40 return exceeds six hours.

Checklist

Checking a travel claim before approval.

• Purpose and destination. The trip has a purpose tied to a work duty and the address of the destination, not just the locality.
• Clock times and the place of departure. The start and end dates and the clock times are recorded, and the duration is counted from the place the trip actually began at.
• Distance. The destination is more than 15 km from the place of departure and more than 5 km from the home, the work-related dwelling and the primary and secondary places of work.
• Duration and type of allowance. More than 6 hours gives a right to a partial per diem, more than 10 hours to a full one.
• Travel days. On a trip running past 24 hours, the periods are counted at 24-hour intervals from the moment of departure, and the last incomplete period separately.
• Free meals. The meals provided are recorded and the halving done: partial per diem from one, full per diem from two.
• Mode of transport. The vehicle used is stated, and the route is recorded where it is needed.
• Kilometres and unit price. For trips driven with a vehicle the employee owns or possesses, the number of kilometres and the unit price are on the claim separately.
• Driving log. The drives are itemised by date, route, kilometres and purpose, and the figures match the kilometres on the travel claim.
• Receipts. Receipts and tickets are attached; for an expense without a receipt there is an attestation signed by the employee.
• Maximum amount. The allowance stays within the limit of the Tax Administration’s decision, and any excess is routed to be handled as pay.
• Retention. The travel claim with its attachments is archived as a voucher for six years from the end of the year in which the financial period ended.