Gig income tax in Finland: salary, work compensation and tax-free allowances

When you get paid for a gig, it's taxed in Finland either as salary or as work compensation – and this distinction decides who handles the taxes and whether you can receive tax-free travel allowances. Performing itself is exempt from VAT, but selling merch is not.

This guide covers the essentials of gig taxation: the difference between salary and work compensation, withholding, tax-free allowances in 2026, the VAT exemption and the common mistakes. This is orienting information – tax figures and rules change yearly, so check the current figures on vero.fi and your own situation with an accountant if needed.

The decisive line is whether the fee is paid as salary or as work compensation. The payer makes the call in practice, but it must reflect the true nature of the relationship – the tax authority can correct a wrong classification. The obligations differ:

• Salary is paid when you perform in an employment relationship (the organiser has the right to direct and supervise). The organiser handles withholding, pays the employer's contributions and may pay tax-free allowances on top of the salary.
• Work compensation is paid when you act independently under an assignment (you provide your own gear and carry the risk). If you're in the prepayment register (e.g. as a sole trader), the payer doesn't withhold; if you're not, the payer withholds tax from the whole payment.

The decision is made as an overall assessment, not by the invoice's title. In practice the contract is often with a booking agency, in which case the withholding obligation lies with the agency.

Tax is withheld from a gig fee according to your tax card. Give your tax card details to the payer before payment (the information often passes electronically, but check). If no tax card is provided and the payer has no data, withholding is 60% – you only get the difference back later as a refund, so sort out the tax card.

The same applies to work compensation when you're not in the prepayment register: for an individual or sole trader, withholding follows the tax card, and without a card it's 60%. For work compensation paid to a company (Ltd, partnerships) it's 13%, unless the company is in the register.

When the fee is paid as salary, the employer may pay tax-free travel allowances on top, up to the Tax Administration's maximums. The 2026 figures:

Allowance	2026	Note
Full per diem	€54/day	over 10 h, over 15 km from workplace
Partial per diem	€25/day	over 6 h
Meal allowance	€13.50	when no per diem is paid
Mileage allowance	€0.55/km	own car; down from €0.59

The exemption isn't automatic, and it applies only to salary: tax-free travel allowances can be paid only to an employee, and only for a genuine work trip. Allowances paid to a work-compensation recipient are always taxable income – only the withholding is skipped, and the real travel costs are deducted in the recipient's own taxation. With a sole trader, costs are deducted as business expenses.

Don't try to convert the fee into tax-free money with artificial allowances. Fictitious kilometres or equipment rentals don't qualify – they must match real trips and costs. The tax authority checks, and an artificial equipment rental can be taxed as capital income with no deduction for the purchase price.

A gig fee can be taxed in three ways. From a tax point of view the differences are:

• Employment salary. The organiser handles withholding and employer contributions, and tax-free allowances work most cleanly. The most laborious route for the organiser.
• Sole trader (invoice). The income is earned income (part may be capital income); you handle your own prepayments and deduct costs as business expenses. Suits regular activity.
• Light entrepreneurship / invoicing service. The service invoices on your behalf and pays you, handling the withholding. Suits occasional gigs.

The details of invoicing – VAT, a foreign promoter, choosing light entrepreneurship – are covered separately in the article on invoicing gigs.

A performance fee is exempt from VAT (VAT Act, section 45) – singers, players and other performers don't add VAT to the fee. You can, however, register for VAT voluntarily, which applies a reduced 13.5% rate (from 1 January 2026) to the performance fee and gives you the right to deduct VAT on purchases (instruments, gear, travel). This is worth it if you have a lot of taxable purchases; otherwise the exemption is simpler.

Selling merch is not VAT-exempt. Selling shirts, records and other merchandise is the sale of goods, subject to the standard VAT rate. If your total taxable turnover exceeds €20,000 in a calendar year, merch sales become VAT-liable, even though the performing itself stays exempt.

If you don't receive tax-free allowances, you can deduct gig costs as income-production expenses in your own taxation:

• Instruments and gear (durable items over about €1,200 as depreciation, smaller ones at once)
• A rehearsal space, supplies, maintenance of tools, professional literature
• Income-production trips by your own car – these give a per-kilometre deduction, which is different from, and lower than, the tax-free €0.55/km allowance an employer can pay; check the current rate on vero.fi.

An employee is automatically granted a €750 income-production deduction without itemising – deduct costs separately only if they exceed this. A freelancer taxed under the Income Tax Act isn't required to keep accounts but must keep records: keep notes of income and expenses and retain the receipts (check the retention period on vero.fi).

Copyright royalties (Teosto, Gramex) are taxed as earned income and aren't subject to VAT. If the royalties are routed to a sole trader or a company, a capital-income share may apply. Royalties and how to report them are covered in more detail in the article on Teosto & Gramex for bands.

• No tax card provided → 60% withholding.
• The conditions for tax-free allowances are misread – a tax-free allowance needs a genuine trip and the right payment basis.
• Artificial kilometres or equipment rentals to convert the fee – the tax authority checks.
• Merch VAT is forgotten – the sale of goods isn't exempt like performing.
• The salary/work-compensation line is read differently from the payer → withholding goes unhandled.

A gig fee is taxed as salary or work compensation, and the payer decides which. Provide your tax card so withholding isn't 60%. On top of a gig paid as salary you can receive tax-free travel allowances (2026: per diem €54, mileage €0.55/km). Performing is VAT-exempt, but selling merch is not. If no allowances are paid, deduct gig costs as income-production expenses. The figures change yearly – check the current values on vero.fi.