Short answer
As a self-employed individual, you can deduct all expenses that are directly related to earning your income or running your business. In PalkkaOnline, expenses are assigned to the correct expense category so that bookkeeping and tax deductions are handled correctly.
This guide walks through every expense category in PalkkaOnline and explains what belongs in each one.
Rule of thumb
An expense is deductible when it relates to earning income or maintaining your business operations. If you would buy the same product or service even without a business, it is probably not deductible.
Example: You buy a drill for construction work — deductible. You buy a drill for a home renovation — not deductible.
Expense categories in PalkkaOnline
PalkkaOnline has 13 expense categories. Below we go through each one: what it includes, what it does not, and what to keep in mind.
Vehicle expenses
This category applies when a business vehicle is used more than 50% for business purposes. In that case you can deduct fuel, maintenance, repairs, insurance and vehicle inspections.
Important limitation: PalkkaOnline does not yet support this model, as it requires double-entry bookkeeping.
Using your own car (less than 50% business use): If you use your personal car for business trips but business driving is less than half of all driving, you make the deduction on your tax return based on a mileage log. Send us your mileage log at the end of the year and we will make the additional deduction. Do not add fuel receipts to the service.
Rental car or car-sharing: If you rent a car specifically for business travel, you can deduct all related costs 100%: the rental fee, fuel, car wash, parking and any excess reduction fees. Keep the rental agreement attached to the receipt.
Not sure about your driving amounts yet?
Keep a mileage log — it is the only way to prove the ratio of business driving to the Tax Administration.
Save all fuel, maintenance and repair receipts at home, just in case.
Do not add receipts to the service yet. If business driving stays below 50%, we will make a kilometre-based deduction. If it exceeds 50%, we will review the situation with you at the end of the financial year.
Travel
Direct costs related to business travel when you travel outside your usual area of operations.
Includes: Train and flight tickets, taxi fares, accommodation (hotels), parking fees and road tolls.
Per diems and mileage allowances: Report per diems (full-day or half-day) on a travel expense claim if the conditions are met. Send us the travel expense claim at the end of the year and we will make the additional deduction on your tax return.
Mobile phone and internet
Phone: Subscription fees and the purchase of the phone device itself.
Internet: Office internet connection or home internet if you work from home.
Note: If you also use your home internet privately, only the business-use portion is added to the service (e.g. 50%).
Representation
Representation expenses are directed at people outside your company — customers and business partners — to create new business relationships or maintain existing ones.
Includes: Restaurant hospitality, gifts.
Important: Only 50% of representation expenses is deductible for income tax purposes, and VAT cannot be deducted (VAT 0%).
Remember: Always write on the back of the receipt who attended and the purpose of the occasion.
Negotiation
Negotiation expenses differ from representation: they are 100% deductible (including VAT).
Includes: Internal meetings, expert consultations or short client meetings where ordinary refreshments are served (coffee, sandwich, light lunch).
Difference from representation: Representation = entertaining external parties (50% deduction, no VAT). Negotiation = ordinary business meeting (100% deduction, VAT included).
Software
All digital tools you need for your work.
Includes: Accounting software, Office suites, graphic tools (Adobe, Canva), email services, CRM systems and cloud storage.
Equipment
Larger or longer-lasting devices and tools used for work.
Includes: Computers, monitors, mice, keyboards, specialised tools and professional literature.
Important limitation: PalkkaOnline does not support bookkeeping for purchases exceeding 1,200 euros (excl. VAT), as they require depreciation. If you invest in more expensive equipment, our service may not be suitable for your business.
Office supplies
Small purchases needed to run the office.
Includes: Paper, pens, stamps, envelopes, folders, printer ink and small break-room supplies (coffee and tea for the office).
Materials for customer
Materials directly related to customer projects or the service you sell.
Includes: For example, hair dyes for a hairdresser, screws for a builder, or specialised materials delivered to a client by a consultant.
Insurance (excl. YEL)
Mandatory and voluntary insurance related to business operations.
Includes: Liability insurance, legal expenses insurance, property insurance and accident insurance.
YEL insurance
The self-employed persons pension insurance has its own category because it is treated specially in taxation.
Recommendation: Add your YEL payments to our service so we can take them into account directly on your business tax return. This way they automatically reduce the taxation of your business income.
Financing
Financing costs related to business operations.
Includes: Bank service fees, business account monthly fees and other financing-related costs.
Tip: You can add a bank statement as a receipt for bank service fees if there is no separate document.
Other expenses
Everything else that is necessary for the business but does not fit other categories.
Includes: Membership fees, marketing costs (Facebook ads, business cards) and training expenses.
Important: receipts and VAT
Always request a receipt that shows the VAT breakdown. A bank statement line alone is usually not enough for a full VAT deduction.
If a receipt is lost, contact the seller and request a copy.
Foreign purchases: Make sure the receipt shows your business VAT number.
Let us develop the service together!
We want PalkkaOnline TMI to be as smooth a tool as possible for your daily work. If you think the service is missing an important expense category or you have other suggestions for improvement, do not hesitate to contact us. We develop the service based on your needs.