What is a client funds account?
A client funds account is a safeguarding account managed by PalkkaOnline, where statutory payments are withheld from your invoicing income before the remainder is transferred to your bank account.
What is withheld to the client funds account?
From each paid invoice, the following are withheld:
VAT (value added tax) — typically 25.5% of the VAT-inclusive invoice amount
Tax prepayment — a percentage calculated based on your income estimate
Enforcement (garnishment) — if you have an enforcement order (rare)
How does the client funds account work?
Your customer pays your invoice
PalkkaOnline withholds VAT, tax prepayment, and any enforcement amounts
The remainder is transferred to your bank account (settlement)
Withheld funds are paid to the Tax Administration on schedule
How do I read my client funds account?
You can see all client funds account transactions in the PalkkaOnline Client Funds Account view. You can filter transactions by type (VAT, tax prepayment, enforcement) and year.
"Withheld (in)" = amount withheld from your invoices
"Transferred (out)" = amount paid to the Tax Administration or your bank account
When are withheld funds paid to the Tax Administration?
VAT is paid after the VAT report is approved (monthly, quarterly, or annually depending on your VAT period)
Tax prepayment is paid monthly according to the Tax Administration schedule
Need help? Ask PalkkaBot or contact our customer support.