Travel, accommodation and meal expenses
Travel, accommodation and meal expenses
The employer has an obligation to compensate the posted worker’s travel, accommodation and meal expenses arising from travel from the worker’s regular place of work in Finland during the posting.
As a rule, the obligation to compensate travel and accommodation expenses arising from the posting from the normal country of work, i.e. the country of origin, to Finland, is determined on the basis of the national legislation or practice of the country of origin applicable to the employee's employment.
Finland does not have any legislation stipulating the employer's obligation to pay for the travel, accommodation and meal expenses of employees. In Finland, the terms of secondment work have been extensively agreed in collective agreements and they contain provisions on travel, accommodation and meal allowances, which, on the basis of general applicability, shall apply to all companies operating in the sector as mandatory terms of employment. In addition, the costs may also be agreed between the parties to the employment agreement.
Compensation of costs during a posting in Finland
The obligation to compensate the posted worker’s travel, accommodation and meal expenses in the country of work during the posting applies to situations where the person is already in the country and the place of work changes during the work in Finland.
The obligation to pay for travel, accommodation and meal expenses during work in Finland arises when during the period of posting, the employee has to move around for professional reasons to different work sites from the normal place of work in the country of work. The obligation covers travel from the normal place of work in Finland temporarily to
- another workplace or work site in Finland or abroad, or
- between work sites during the posting in Finland.
The posting employer should compensate travel, accommodation and meal expenses arising from travel at minimum in accordance with the provisions of the generally applicable collective agreement.
If the posting undertaking, in subcontracting situations or internal transfers within a group of undertakings, is bound by a national collective agreement under membership of an employer organisation or a signed contract to comply with a collective agreement, the compensation to be paid to the posted worker shall be determined on the basis of such a collective agreement.
Double reimbursement of travel, accommodation and meal expenses should be avoided.
The costs reimbursed by the employer to the employee against actual expenses are not to be calculated as wages of the posted worker.
Compensation of expenses from the country of origin to Finland
As a rule, the costs arising from the posting from the country of origin to the country of work, i.e. to Finland, such as travel and accommodation expenses, are covered by the regulations of the country of origin and are also determined in accordance with the terms and conditions agreed upon in the employment contract. If the employer and the employee have signed a contract to commit to the compensation of expenses, the protection of the posted worker exists and is arranged on a contractual basis.
The occupational safety and health authorities cooperate with the authorities of the Member State of origin in enforcing the fulfilment of Finland's wage conditions. In the wage comparison and in the assessment of the fulfilment of Finland's employment conditions, it is essential to know which salary item must be considered as compensation of actual costs and which as wages. A report from the employer and, if necessary, a report received from the authorities of the Member State of origin are a means to ascertain the matter in case of doubt.
The protection provision differs from the principal rule
If the posted worker does not receive protection on the basis of the law or practice of the country of origin or on the basis of what has been agreed in the employment contract, or if the protection is substantially below the Finnish level, the employer must compensate travel and accommodation expenses in such a way that they essentially correspond with the level of compensation of the collective agreement to be applied in the employment relationship. The fairness of the level of compensation shall be assessed through the collective agreement to be applied in Finland.
The obligation to compensate travel and accommodation costs arises if:
- travel and accommodation expenses incurred on the basis of the law or practice of the Member State of origin shall not be compensated at all, and no agreement on the compensation of the relevant costs has also been made in the contract of employment of the posted worker, or
- the compensation determined in accordance with the provisions or practice of the Member State of origin or agreed in the employment contract is substantially below the level of the provisions of Finland's collective agreement.
The protection provision ensures equal treatment of workers and equal competition between employers. The protection provision aims to prevent the possibility of speculating on high accommodation and travel costs, which can reduce the wage level of workers without the actual costs involved.
Under the protection provision, the occupational safety and health authority may intervene in the future in, e.g. the multifold costs recovered for shared accommodation of several persons compared to the actual costs.
Taxation of expenses arising from travel
The compensation of costs incurred by business travel paid by the employer are tax-exempt if they are based on actual expenses or the Tax Administration's annual decision on daily allowances and kilometre allowances.
Further information: Tax-exempt allowances for business travel. Tax Administration.