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Taxation of unemployment benefits
Unemployment benefits paid by Kela are taxable income, i.e. tax has to be paid for them. Kela automatically applies a tax withholding rate of 20 percent.
Wages and benefits are taxed in different ways. Even if the unemployment allowance is lower than the wage, the rate of tax may not necessarily be lower. The reason for this is that it is not possible to make the same tax deductions from the unemployment benefit as from the wage.
Revised tax card for unemployment benefits
If needed, you can apply for a revised tax card for unemployment benefits. You may need a revised tax card if
- you have incidental or part-time earnings while unemployed
- you receive also other benefits besides the unemployment benefit.
The tax card for Kela benefits is different from the tax card for salaries and wages. Kela cannot use a tax card for salaries and wages.
Do as follows
- Use the tax rate calculator to check if you need a revised tax card (vero.fi).
- Order a revised tax card for benefits via MyTax (vero.fi). Estimate your incomes and benefits for the whole year for the tax card. You can check the incomes and benefits that have already been paid for instance in the national incomes register.
- The Tax Administration will send the revised tax card directly to Kela.