What types of income are taken into account

When carrying out the student financial aid income check, Kela takes into account your income from employment or capital which is taxable under the Income Tax Act. Your income will affect the number of months per year for which you can get financial aid. More information on income taxation is available from the Finnish Tax Administration (vero.fi).

In addition, Kela takes into account your income from abroad. If you are in apprenticeship training, your salary income will be taken into account for both student financial aid and housing allowance purposes, even though you cannot receive student financial aid for the period of apprenticeship training. Find out more about how apprenticeship training affects student financial aid.

You do not have to report your taxable income to Kela when applying for or receiving financial aid. The Tax Administration reports your taxable income from employment and capital to Kela.

Income from abroad

Kela takes into account any income that you have received from abroad if comparable income received in Finland would be taxable.

• You must declare all income from abroad to Kela in your application for financial aid or on the notification of changes form.
• If both the student and the Tax Administration report income received from abroad to Kela, the larger amount will be taken into account.

Kela takes into account the pre-tax income

Kela takes into account the pre-tax (gross) income. Pre-tax income refers to income from which no deductions have been made, in other words, income from which no taxes, professional expenses, costs or any other deductions have been made.

However, in the following situations Kela does take into account certain deductions made by the Tax Administration:

• If you have sold shares or other assets, the Tax Administration will compute your taxable capital gain by deducting, from the sales price, the acquisition price and any costs you incurred in making the gain (for example trading expenses) or the presumed acquisition cost. Capital loss is not deducted. Please provide details, to the Tax Administration, of the expenses incurred in the sale of shares or assets. The Tax Administration will then report the amount of taxable capital gain to Kela. Please take into account that a small capital gain is tax free income.
• If you have rental income, state your expenses for the rental property to the Tax Administration. The Tax Administration calculates your rental income by deducting from it the maintenance fees, upkeep costs, electricity, water and heating charges and insurance payments you have made as the landlord. Interest and repayments on loans cannot be deducted. The Tax Administration reports the amount of rental income to Kela.

Income and the year to which it is applied

Kela considers income as earned in the year and at the amount reported by the Tax Administration. Taxable income is as a rule regarded as income earned in the year during which you received it.

However, capital gains generally are considered as income for the year in which the sale or transfer of ownership took place even if you have not yet received the income.

Check with the Tax Administration which year your income is applied to.

How certain types of income are treated in the income check

• Taxable dividends paid to an individual are regarded as income. Of the dividends paid by an exchange-listed company 85% are taxable income from capital. The rest is tax free. If you have been paid dividends by a company which is not a public corporation, check with the Tax Administration whether such dividends are taxable income.
• An equity savings account is taken into account as income in connection with student financial aid only if money is withdrawn from the account and the account generates returns. Only the returns are regarded as income, and they are regarded as income earned on the date on which they are withdrawn from the account. If the account generates high returns, it is perhaps not worthwhile to withdraw money from the account during the time of study. If the account incurs losses, any money withdrawn from the account is not taken into account as income. Capital losses may thus also be deducted from the income that is taken into account in connection with student financial aid when securities are traded through an equity savings account. Withdrawals that incur losses do not, however, affect the amount of the annual income taken into account.
• If you have received taxable income from an insurance investment such as a savings insurance plan, it is considered as income. Contact the Tax Administration to see if the income is taxable.
• If you have received a taxable one-time payment, such as a termination payment, it is regarded as income for the year in which it is taxed.
• Self-employment is relevant for purposes of the income check if you earn taxable income from it such as a business profit, dividend or salary.
• The income of an undivided estate is not taken into account. You may receive income which is taken into account in the income check after the estate has been divided.
• Rewards and winnings which are subject to lottery tax are not taken into account. However, they can sometimes be subject to income tax, in which case they are taken into account.
• Of the interest earned on the share capital of a cooperative, 25% is taxable income from capital and 75% tax-free up to a per-year maximum of 5,000 euros.

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