1. How does PalkkaOnline TMI work?
You invoice — we handle the rest. Accounting, VAT returns, prepayment taxes, and settlements are all handled automatically. Your job is to invoice your customers, report expenses, and approve reports when they're ready.
Create an invoice → we send it and track the payment
Customer pays → we settle the funds to your account (minus service fee and taxes)
Reports are generated automatically → you review and approve them
2. Fiscal year and obligations
Your fiscal year is the calendar year. During the year, you invoice, report expenses, and approve your VAT reports. After the fiscal year, we prepare the tax return, which you review and confirm. The fiscal year compass on the dashboard shows where you are.
Your fiscal year is the calendar year (January–December)
Your VAT report needs to be approved monthly, quarterly, or annually depending on your VAT period — remember to report expenses before approval
After the fiscal year (January–April), you review and confirm the tax return — due date Apr 2
The fiscal year compass on the dashboard shows where you are in the year and what to do next
Note: If you are not VAT-liable, you don't need to approve VAT reports.
3. Value Added Tax (VAT)
VAT (Value Added Tax) is a tax you add to your invoices — but it's not your money. Think of yourself as a tax collector: you collect VAT from your customer and we remit it to the Tax Administration.
Example: you invoice 1,000 € + 25.5% VAT = customer pays 1,255 €. You keep 1,000 € and 255 € goes to taxes.
Good news: when you buy something for your business (tools, materials), the VAT they contain is deducted from the VAT you owe — so you effectively get it back. You choose the correct VAT rate when invoicing and approve the VAT report according to your VAT period.
25.5% is the standard rate — use this unless your work falls under a reduced rate
14% / 13.5% for food and restaurant services, 10% for books, medicine, and sports services
0% only in legally defined situations: reverse charge (construction), healthcare, sales to foreign companies, performance fees
Purchase VAT is deducted from what you owe: collected 500 € VAT, expenses had 100 € VAT → you pay only 400 € — that's why reporting expenses matters!
An incorrect VAT rate must be corrected — ask us before sending the invoice if you're unsure
Note: If you are not VAT-liable (turnover below €20,000/year), you don't add VAT to your invoices and cannot deduct VAT on purchases.
4. Prepayment tax
The government doesn't want to wait until your tax return to collect income tax — so it's paid in advance throughout the year. This is called prepayment tax. PalkkaOnline collects it automatically from your settlements, so you don't have to remember due dates or pay separately. The settlement report shows how much has been withheld.
PalkkaOnline collects prepayment tax from your settlements automatically — no due dates to remember
If you don't have prepayment tax collection, you may need to pay taxes yourself — check with the Tax Administration
5. Invoicing
You create the invoice — we handle everything else. Choose your customer, add products or services, and check the VAT rate. Once the invoice is ready, we send it to your customer. You can track the invoice status in the service: sent, paid, overdue.
Create an invoice — choose the customer, products, and VAT rate
We send the invoice to your customer and track the payment
You can follow the status of your invoices in real time
6. Money flow and settlements
When your customer pays an invoice, the money doesn't come directly to you — it goes through PalkkaOnline's client funds account. This is normal and secure.
The service fee, VAT, and possible prepayment tax are automatically deducted. The remaining amount is settled to your bank account the next morning.
Your customer's payment first arrives at PalkkaOnline's client funds account
Service fee, VAT, and possible prepayment tax are deducted — the rest is settled to you
Settlement is sent automatically the next morning and funds typically arrive in your account the same day
7. Expenses
Business expenses save you money in two ways. First, they reduce your taxable income, so you pay less income tax.
Second, if you're VAT-registered, the VAT contained in your expenses is deducted from the VAT you owe — so you effectively get it back. That's why reporting expenses is so important!
Expenses reduce your income tax — the more business expenses, the less tax you pay
If VAT-registered: expense VAT is deducted from your VAT bill — you effectively get the VAT back
Add expense → upload receipt → choose category — we review and approve
Report expenses before approving the VAT report — after that, the period is locked
Vehicle expenses and the driving log are reported separately
8. Tax return
After the fiscal year, it's time for the tax return — but don't worry, we do the heavy lifting. We prepare the tax return based on your accounting records. Your job is simply to review that the information is correct and confirm it in the service. The due date is April 2.
We prepare the tax return based on accounting records
You review and confirm it in the service
The due date is April 2 of the year following the fiscal year
9. Suomi.fi authorizations
Suomi.fi authorization gives PalkkaOnline the right to handle your tax matters on your behalf. Without this authorization, we cannot file VAT returns or the tax return. The authorization is done once and remains valid until further notice.
Without authorization, we cannot file VAT returns or the tax return on your behalf
Authorization is done once in Suomi.fi and remains valid until further notice