As of 1 January 2019, the study grant will no longer be subject to withholding tax
The practice of deducting withholding tax from the study grant will change. As of January 2019, withholding tax will no longer automatically be deducted from the study grant. Students are advised to consider this when estimating the withholding tax for their other incomes.
Currently, Kela deducts a withholding tax of 10% from study grants, if the study grant received is at least EUR 170 per month. It is also possible to withhold tax in accordance with a revised tax card submitted to Kela by the student.
However, as of January 2019, withholding tax will no longer be deducted from the study grant. If a student has already submitted a revised tax card to Kela for 2018, the withholding tax for January 2019 will be deducted in accordance with that tax card, and withholding tax will no longer be deducted starting from February 2019.
Although withholding tax will no longer be deducted automatically, students can, however, notify Kela if they would like withholding tax to be deducted and at what rate. The notification can be made by phone, at one of Kela’s service points or by sending a message via Kela’s online customer service.
A revised tax card for wages may be needed
The study grant is taxable income. Students who have no income apart from study grant, do not have to pay income tax on the grant, because students are entitled to a study grant deduction.
If a student has other incomes, the study grant must be taken into account when withholding tax on those incomes. If the total amount of the student’s income (study grant and wages) is likely to exceed the income limit specified on the tax card, the student should order a new revised tax card for wages. Tax cards can be ordered via the Tax Administration’s MyTax online service. When ordering the card, you must state the amount of any study grants, wages or other taxable income already paid to you, and the tax withheld on them as well, and give an estimate of any future incomes.