If you are a food delivery courier and pay less taxes, you will have more money to spend.
Finnish taxation works in such a way that the higher your income, the higher your tax rate. In other words, Finnish taxation penalizes higher income levels.
If you do food delivery work under your own company name, and you are not a so-called self-employed person through an invoicing service (or "light entrepreneur"), you will receive significant tax benefits.
Many food delivery couriers are not aware of these tax benefits, and do not know how to make legal tax deductions for entrepreneurs operating in Finland.
This means that you may be losing thousands of euros by paying taxes that you should not pay according to the law.
I will now list the tax deductions that a food delivery driver working under their own company name can receive:
1. Food delivery driver travel expenses
Food delivery drivers must travel from one place to another when delivering orders from restaurants to customers.
You can claim tax deductions for the costs of all modes of transportation, including cars, bicycles, electric scooters, and electric bicycles.
The most significant tax benefits for food delivery drivers working under their own company name can be obtained when moving in their own car.
In this case, you can receive either mileage compensation or compensation directly for all actual car operating costs, including the purchase price of the car, fuel costs, repair costs, and car insurance premiums.
2. Food delivery courier phone costs
As a food delivery driver, a phone is an essential work tool.
You can claim a tax deduction for the purchase price of your phone and your monthly phone bills.
You can claim a tax deduction for both your personal income tax as an entrepreneur, and for the value added tax included in the price of the phone and your phone bills.
3. Food delivery driver home office deduction
As a food delivery driver, you have a business premises or office at home, meaning you have no fixed business location in the tax system other than your home.You can claim a home office deduction in two ways: either as a fixed annual amount according to the tax authority's table or, alternatively, based on your actual living costs.
Of these options, the home office deduction based on actual living costs is a significantly better tax deduction for those who rent.
The amount of the deduction can easily rise to thousands of euros per year.
You can claim a home office deduction based on actual costs in proportion to the square footage of the part of your home that is used for work. The larger the square footage that is used for work, the larger the tax deduction you will receive.
For example, if you have a 60 square meter apartment, of which 20 square meters are used for work, you will receive a deduction based on the living costs of 20 square meters.
The home office deduction includes all of your living expenses, such as rental of an apartment, furniture used for work, and electricity bills. In order to calculate the home office deduction, you need to know the total cost of your living expenses per year.
4. Food delivery courier daily allowance deduction
The daily allowance deduction for a food delivery driver operating as a self-employed person under their own company name can be a very significant tax benefit.
You can claim a deduction for a daily allowance if you meet the following conditions:
- You travel more than 15 kilometers from home during your working day.
- Your working day lasts more than 6 hours.
The amount of the deduction in 2023 is as follows:
- A working day that lasts more than 6 hours: 22 euros
- A working day that lasts more than 10 hours: 48 euros
This deduction can lead to a situation where you do not actually pay any taxes at all.
For example, if you work 3 days a week and each working day lasts more than 10 hours, you will be entitled to a deduction for 156 working days per year.
In this case, you would receive a deduction of 7,448 euros per year. You will not pay any taxes on this amount, as it is a deduction for a tax-free daily allowance.
5. How significant are the tax deductions for food delivery drivers?
If you receive all of the above tax deductions as a food delivery driver, we are talking about thousands of euros.
Example calculation of food delivery driver tax deductions:
Sales: 30,000 euros per year
- Home office deduction: 2,000 euros
- Vehicle expenses: 2,000 euros
- Phone expenses: 500 euros
- Daily allowance deduction: 8,000 euros
- Total deductions: 12,500 euros.
Final taxable income: 17,500 euros.
Tax rate for this income in Finland will be very low.
6. Do you want to save money with tax deductions?
Are you a food delivery driver with a sole proprietorship or considering starting one?
I provide bookkeeping and tax consulting services for food delivery drivers operating as sole proprietors.
