Hello,
I have a toiminimi, and I have been working most with services providers who send me their invoices and no problems at all. Now I just received an invoice of a new supplier of services ( he does not work in my premises or have a work schedule as he just did a translation work) , now I don't know what to do, because I don't see the difference between he and me, I invoice my customers and I take care of all my tax obligations... as I understand When you work for a private employer, that employer is responsible for withholding taxes from your paycheck and sending those taxes to the vero on a timely basis. But if you work as a freelance, you are self-employed, and you cannot rely on anyone else to pay your taxes for you. As a freelancer, you must keep track of your earnings and put aside enough money to settle up with vero. Am I right, can anybody give me a hand and tell me what should I do?
Best regards
Luis
Employer obligations for a freelance supplier
Re: Employer obligations for a freelance supplier
You have to check if he is in ennakkoperintärekisteri. It can be checked in http://www.ytj.fi/yrityshaku.aspx?path= ... elikoodi=1
If he is not then call to vero to check how much you need to withold ald pay to vero, its up to 60% from alv free price but im not sure. more info in http://vero.fi/en-US/Companies_and_orga ... t_register
Dont mind about that "wages" part since you arent clearly paying wages, its for cases where some isnt really business even if registered as one.
If he is not then call to vero to check how much you need to withold ald pay to vero, its up to 60% from alv free price but im not sure. more info in http://vero.fi/en-US/Companies_and_orga ... t_register
Dont mind about that "wages" part since you arent clearly paying wages, its for cases where some isnt really business even if registered as one.
Caesare weold Graecum, ond Caelic Finnum
Re: Employer obligations for a freelance supplier
So this person did a translation for you and sent you an invoice. Is this correct?
Does the invoice include ALV? The invoice must show his Business ID number which you can check at www.prh.fi
My understanding is that you have bought the service as you would buy any other suppliers for your busines ie it's a business to business transaction. So you just pay the invoice in the normal way, as if you were buying a book, or a piece of equipment. If I remember correctly, you simply have to check that the person is registered for Alv. It is up to your supplier to worry about his own TyEL, tax etc.
Does the invoice include ALV? The invoice must show his Business ID number which you can check at www.prh.fi
My understanding is that you have bought the service as you would buy any other suppliers for your busines ie it's a business to business transaction. So you just pay the invoice in the normal way, as if you were buying a book, or a piece of equipment. If I remember correctly, you simply have to check that the person is registered for Alv. It is up to your supplier to worry about his own TyEL, tax etc.
Re: Employer obligations for a freelance supplier
Hello Penelope and Onkko,
No, he does not charge me any ALV, he just charge in his invoice the amount agreed for his services of translations but this time (the last year he didn't do it because he say as a new freelance he has 0% deduction for the last three montsh of 2011) Now he send attached to his invoice a copy of his freelanceverokortti and it indicates enakonpidätysprosentti 15% , so it means that I should deduct 15% of his invoice and pay it to the vero in my monthly declarations together with the ALV declaration and that´s it? I do not have to pay anything else?
Thanks for your help
No, he does not charge me any ALV, he just charge in his invoice the amount agreed for his services of translations but this time (the last year he didn't do it because he say as a new freelance he has 0% deduction for the last three montsh of 2011) Now he send attached to his invoice a copy of his freelanceverokortti and it indicates enakonpidätysprosentti 15% , so it means that I should deduct 15% of his invoice and pay it to the vero in my monthly declarations together with the ALV declaration and that´s it? I do not have to pay anything else?
Thanks for your help
Re: Employer obligations for a freelance supplier
So he is not business, im not totally sure about freelance tax card so you should call vero to get right information.
Basically he is your employee but things get bit fuzzy so i rather say nothing than give probably wrong information.
call vero, they atleast should know. And dont forget to reply here after you get info from vero so others know too.
Basically he is your employee but things get bit fuzzy so i rather say nothing than give probably wrong information.
call vero, they atleast should know. And dont forget to reply here after you get info from vero so others know too.
Caesare weold Graecum, ond Caelic Finnum
Re: Employer obligations for a freelance supplier
Thanks Okko,
I will wait for any other reply so if I go to vero I go with some knowledge about what to ask properly, and of course I will post here the solution so other members can use this information for their own good.
regards
I will wait for any other reply so if I go to vero I go with some knowledge about what to ask properly, and of course I will post here the solution so other members can use this information for their own good.
regards
Re: Employer obligations for a freelance supplier
Either he is your employee (in which case you need his tax card, you have to pay him a salary minus all the deductions as you would any other employee) OR he is a supplier in which case he sends you an invoice.
In other words, if you are paying him a freelancer's wage then you DO NOT need an invoice from him (he is NOT a supplier, he is an employee).
There is not really any other alternative. He is either a business (toiminimi or Oy) or he is an employee (freelance or salaried).
The confusion comes from the fact that Vero uses "freelance" to mean any salaried person who has multiple employers in the same period (ie concurrent). The "freelance" tax card means that a person can use his basic tax rate (eg 15% if that's what's on the card) with concurrent employers.
So, you need to send 15% to Vero AND you also need to deduct 4,5% TEL, 0,6% unemployment (but I suggest you check with Vero and Kela about those as I am not 100% sure about the rates) this year. You also need to send him a pay slip.
I think maybe he (the translator) is not completely familiar with the procedure. Unless he simply wants to avoid setting himself up as a TMI and doing all the paperwork.
In other words, if you are paying him a freelancer's wage then you DO NOT need an invoice from him (he is NOT a supplier, he is an employee).
There is not really any other alternative. He is either a business (toiminimi or Oy) or he is an employee (freelance or salaried).
The confusion comes from the fact that Vero uses "freelance" to mean any salaried person who has multiple employers in the same period (ie concurrent). The "freelance" tax card means that a person can use his basic tax rate (eg 15% if that's what's on the card) with concurrent employers.
So, you need to send 15% to Vero AND you also need to deduct 4,5% TEL, 0,6% unemployment (but I suggest you check with Vero and Kela about those as I am not 100% sure about the rates) this year. You also need to send him a pay slip.
I think maybe he (the translator) is not completely familiar with the procedure. Unless he simply wants to avoid setting himself up as a TMI and doing all the paperwork.
Re: Employer obligations for a freelance supplier
Do contact the tax office and get it sorted out with them. If you don't and make a mistake (even if it isn't your fault, but you got wrong information) you can be in big trouble with the tax office.
Re: Employer obligations for a freelance supplier
Thanks, for all your information and suggestions. I will go to verotoimisto and ask to be sure. I will revert with the answer so we all will know how to handle this kind of situation in the future.
Re: Employer obligations for a freelance supplier
Well I have been investigating and found differentes opinions in other forums and even found a information from Vero ( is in finnish but I would appreciate somebody confirm what I think it says):
1) From another forum:
<<Yes indeed taking on people as freelancers saves companies money. For example, they dont have to pay your social security (2.96%) or your pension (~16% cost to company) and also you dont get other benefits like sick pay or benefits that you would get with seniority etc. In general it costs 50-60% on top of the basic salary for a company to employ you.
So, now you are freelance you would invoice them every month. Now obviously your costs are higher than if you were an employee you have to pay your whole pension (YEL 21.4% compared to 4.6% of TEL as an employee), possible unemployment or health insurance and as a freelancer you will also have other general expenses which are naturally tax deductable. You will also probably have to register for VAT which you will charge your employer (this is nice, for example if you buy nice new laptop for work you can look at the ex vat prices).>>
2) <<Työkorvauksia saavat freelancerit
Jos kysymys ei ole työsuhteesta eikä henkilö ole perustanut yritystä, toimeksiantaja voi maksaa työkorvauksen. Työ suoritetaan ennakkoperintälain 25 luvun 1 §:n 1 mom:ssa tarkoitetussa suhteessa. Työkorvauksessa kyse on työstä, tehtävästä tai palveluksesta muuna kuin palkkana maksettavasta korvauksesta. Edellytyksenä on, että työsuhteen tunnusmerkit (erityisesti työn johdon ja valvonnan osalta) eivät täyty.
Työn tarjoaja tekee työkorvauksesta ennakonpidätyksen kuten palkastakin, mutta sen osalta ei ole velvollisuutta maksaa sotu- ja TEL-maksua. Työn suorittajan verokortti voi olla tavallinen palkansaajan verokortti tai ns. freelancer -verokortti. Työkorvauksia saava joutuu hankkimaan itselleen YEL-vakuutuksen, jos YEL-työtulot ovat keskimäärin vähintään 6 186,56 euroa vuodessa. (vuonna 2008). Työkorvaus soveltuu näin ollen satunnaisiin toimeksiantoihin. Henkilö voi saada työkorvauksia myös jos toimeksiantoja suoritetaan päätyön ohella sivutoimisesti.
Työkorvauksen saajaan ei sovelleta työlainsäädäntöä. Työkorvauksen saajan oikeudellinen asema on saman tyyppinen kuin yrittäjällä sillä erotuksella, että työkorvauksen saaja ei ole hakeutunut yrittäjäksi.>>
Here I understand that all I have to do is to hold the 15% (as per my supplier freelanceverokortti) and nothins else because this is not a salary but a compensation for his work, Am i right?
Here the source: http://www.akavanerityisalat.fi/fi/freelance-tyo.html
Best regards
1) From another forum:
<<Yes indeed taking on people as freelancers saves companies money. For example, they dont have to pay your social security (2.96%) or your pension (~16% cost to company) and also you dont get other benefits like sick pay or benefits that you would get with seniority etc. In general it costs 50-60% on top of the basic salary for a company to employ you.
So, now you are freelance you would invoice them every month. Now obviously your costs are higher than if you were an employee you have to pay your whole pension (YEL 21.4% compared to 4.6% of TEL as an employee), possible unemployment or health insurance and as a freelancer you will also have other general expenses which are naturally tax deductable. You will also probably have to register for VAT which you will charge your employer (this is nice, for example if you buy nice new laptop for work you can look at the ex vat prices).>>
2) <<Työkorvauksia saavat freelancerit
Jos kysymys ei ole työsuhteesta eikä henkilö ole perustanut yritystä, toimeksiantaja voi maksaa työkorvauksen. Työ suoritetaan ennakkoperintälain 25 luvun 1 §:n 1 mom:ssa tarkoitetussa suhteessa. Työkorvauksessa kyse on työstä, tehtävästä tai palveluksesta muuna kuin palkkana maksettavasta korvauksesta. Edellytyksenä on, että työsuhteen tunnusmerkit (erityisesti työn johdon ja valvonnan osalta) eivät täyty.
Työn tarjoaja tekee työkorvauksesta ennakonpidätyksen kuten palkastakin, mutta sen osalta ei ole velvollisuutta maksaa sotu- ja TEL-maksua. Työn suorittajan verokortti voi olla tavallinen palkansaajan verokortti tai ns. freelancer -verokortti. Työkorvauksia saava joutuu hankkimaan itselleen YEL-vakuutuksen, jos YEL-työtulot ovat keskimäärin vähintään 6 186,56 euroa vuodessa. (vuonna 2008). Työkorvaus soveltuu näin ollen satunnaisiin toimeksiantoihin. Henkilö voi saada työkorvauksia myös jos toimeksiantoja suoritetaan päätyön ohella sivutoimisesti.
Työkorvauksen saajaan ei sovelleta työlainsäädäntöä. Työkorvauksen saajan oikeudellinen asema on saman tyyppinen kuin yrittäjällä sillä erotuksella, että työkorvauksen saaja ei ole hakeutunut yrittäjäksi.>>
Here I understand that all I have to do is to hold the 15% (as per my supplier freelanceverokortti) and nothins else because this is not a salary but a compensation for his work, Am i right?
Here the source: http://www.akavanerityisalat.fi/fi/freelance-tyo.html
Best regards
Re: Employer obligations for a freelance supplier
The information from the other forum (ie number 1 above) is using "freelance" to talk about companies who take on people who have a TOIMINIMI. Those people are responsible for paying their OWN socal contributions and their own tax. They are SUPPLIERS as far as the company using them is concerned. Theirs is a B2B (business to business) relationship
The information from Vero (ie number 2 above) relates to the "freelancers tax card" which is people who do NOT have a toiminimi, they do NOT pay TyEL or YEL - they are simply casual salaried EMPLOYEES with multiple concurrent employers. Their employer retains income tax and social deductions for them and transfers it to the state (Vero and Kela)
The two things are DIFFERENT.
The information from Vero (ie number 2 above) relates to the "freelancers tax card" which is people who do NOT have a toiminimi, they do NOT pay TyEL or YEL - they are simply casual salaried EMPLOYEES with multiple concurrent employers. Their employer retains income tax and social deductions for them and transfers it to the state (Vero and Kela)
The two things are DIFFERENT.
Re: Employer obligations for a freelance supplier
Hello,
Well at the end, my freelance supplier went to the verotoimisto and he talks about it, and they change his freelance verokortti for a työkorvausta kortti, in which the indicated (määräys koske "työkorvausta) the Perusprosentti 16% , so as I understand now I only have to deduct the 16% and pay it together with the next alv payment that I will do.
Any cooments will be appreciated.
Well at the end, my freelance supplier went to the verotoimisto and he talks about it, and they change his freelance verokortti for a työkorvausta kortti, in which the indicated (määräys koske "työkorvausta) the Perusprosentti 16% , so as I understand now I only have to deduct the 16% and pay it together with the next alv payment that I will do.
Any cooments will be appreciated.
Re: Employer obligations for a freelance supplier
Forgot to say that now it make sense accordingly this:
2) Työkorvauksia saavat freelancerit
Jos kysymys ei ole työsuhteesta eikä henkilö ole perustanut yritystä, toimeksiantaja voi maksaa työkorvauksen. Työ suoritetaan ennakkoperintälain 25 luvun 1 §:n 1 mom:ssa tarkoitetussa suhteessa. Työkorvauksessa kyse on työstä, tehtävästä tai palveluksesta muuna kuin palkkana maksettavasta korvauksesta. Edellytyksenä on, että työsuhteen tunnusmerkit (erityisesti työn johdon ja valvonnan osalta) eivät täyty.
Työn tarjoaja tekee työkorvauksesta ennakonpidätyksen kuten palkastakin, mutta sen osalta ei ole velvollisuutta maksaa sotu- ja TEL-maksua. Työn suorittajan verokortti voi olla tavallinen palkansaajan verokortti tai ns. freelancer -verokortti. Työkorvauksia saava joutuu hankkimaan itselleen YEL-vakuutuksen, jos YEL-työtulot ovat keskimäärin vähintään 6 186,56 euroa vuodessa. (vuonna 2008). Työkorvaus soveltuu näin ollen satunnaisiin toimeksiantoihin. Henkilö voi saada työkorvauksia myös jos toimeksiantoja suoritetaan päätyön ohella sivutoimisesti.
Best regards
2) Työkorvauksia saavat freelancerit
Jos kysymys ei ole työsuhteesta eikä henkilö ole perustanut yritystä, toimeksiantaja voi maksaa työkorvauksen. Työ suoritetaan ennakkoperintälain 25 luvun 1 §:n 1 mom:ssa tarkoitetussa suhteessa. Työkorvauksessa kyse on työstä, tehtävästä tai palveluksesta muuna kuin palkkana maksettavasta korvauksesta. Edellytyksenä on, että työsuhteen tunnusmerkit (erityisesti työn johdon ja valvonnan osalta) eivät täyty.
Työn tarjoaja tekee työkorvauksesta ennakonpidätyksen kuten palkastakin, mutta sen osalta ei ole velvollisuutta maksaa sotu- ja TEL-maksua. Työn suorittajan verokortti voi olla tavallinen palkansaajan verokortti tai ns. freelancer -verokortti. Työkorvauksia saava joutuu hankkimaan itselleen YEL-vakuutuksen, jos YEL-työtulot ovat keskimäärin vähintään 6 186,56 euroa vuodessa. (vuonna 2008). Työkorvaus soveltuu näin ollen satunnaisiin toimeksiantoihin. Henkilö voi saada työkorvauksia myös jos toimeksiantoja suoritetaan päätyön ohella sivutoimisesti.
Best regards