How does furnished accommodation provided by an employer affect an employee’s tax liability?

Furnished accommodation provided by an employer does not automatically result in tax liability for the employee. The accommodation may qualify as a tax-free business travel expense if the employee is working temporarily at a specific place of work and other conditions are met. If the accommodation serves as the employee’s usual place of residence near their actual place of work, it may constitute a taxable housing benefit. The employer should clarify the classification before the accommodation begins, so that the payroll department has the correct information.

Furnished accommodation organised by the employer during a business trip

An employer may pay for accommodation incurred during a business trip directly to the service provider without this constituting a taxable benefit for the employee. This requires that the journey in question constitutes a business trip for tax purposes. In such cases, the employee travels for work-related reasons to a specific place of work where they are temporarily employed. The Tax Administration’s Guidance on travel expenses describes the conditions in more detail.

The duration of the work alone does not determine the tax treatment. The payroll department must also check the employee’s actual place of work, their permanent home, the regularity of their work, and who is responsible for accommodation costs. A clear booking confirmation, invoice and details of the guests staying there make processing easier. You can book with us project accommodation From a single night to several months.

The tax treatment of accommodation is determined on the basis of the actual circumstances of the work, not simply on the length of the accommodation period.

When can furnished accommodation be considered a housing benefit?

A housing benefit may arise when an employer makes a flat owned or controlled by them available to an employee as part of their employment relationship. A benefit in kind is considered part of salary income, and the employer includes it in the payroll calculations. If an employer provides a furnished benefit-in-kind flat, the furnishings may also constitute a separate taxable benefit. The Tax Administration Guidance on nature benefits the principles governing the processing of housing benefits can be found here.

It is worth checking whether a housing benefit is available if an employee uses a property near their main place of work as their usual home, or if their working arrangements have changed from temporary to permanent. The employee’s unrestricted right of use and any personal contribution also affect the overall picture. Reasonable accommodation costs incurred whilst travelling to a secondary place of work for work-related duties may, under certain conditions, be reimbursed tax-free.

It is advisable to keep a record of any furnished accommodation provided by the employer

Let’s imagine that a team of four fitters arrives in Oulu for 21 nights. The total accommodation requirement is 4 × 21, or 84 person-nights. The employer makes the booking in its own name and pays the bill directly. If the fitters are working at a temporary site and their actual home is elsewhere, the accommodation may meet the conditions for tax-free business travel accommodation. However, the 21-night period alone does not guarantee tax exemption, as the nature of the place of work is the decisive factor.

HR or the line manager should provide the payroll department with the employees’ names, the period of accommodation, the place of work, the purpose of the trip and details of their usual place of work. Contract and invoicing procedures can be planned in advance a template for booking a furnished flat We organise furnished flats in Oulu and project accommodation elsewhere in Northern Finland. The final tax treatment is confirmed by the employer’s payroll department, the Tax Administration or a tax adviser.