Certificate of taxable income

What it means

The certificate of taxable employment income is a document the employer issues to an employee for a calendar year. It shows total employment income, tax withheld, the employee’s contributions, any child tax credit paid and other data needed to calculate the tax.

The employee needs it when filing a tax return themselves, for example because they had several employers, also had business or rental income, or do not want an annual tax reconciliation. They transfer the figures into the type A or type B return.

The employer issues the certificate on the employee’s request within a statutory deadline after the year ends, and also to everyone who did not ask for the annual reconciliation. The form is prescribed and published by the Financial Administration.

How it works in practice

In payroll we prepare the certificates in bulk once December’s payroll is closed. The figures come straight from the payroll records, so they agree with the annual report the employer sends to the tax office. Any difference would be obvious in an audit.

For employees who left during the year, we issue the certificate with their other leaving documents if they ask for it, or send it to their last known address. That way the employee does not have to chase a former employer at the start of the year.

For clients who are employed and also run a business, we help combine the certificates from all employers with business income. If during the year an employee signed a declaration claiming the personal allowance with two employers at once, we also deal with the additional tax due.

What to watch out for

An error in the certificate, such as a wrongly included tax credit or contributions, carries into the employee’s return. Only the employer can issue a correction; the employee cannot make it themselves. Where in doubt we compare the certificate with the payslips.

The certificate covers only employment income. Income from work agreements subject to final withholding tax, unless the employee chose otherwise, is not shown in the same way, and when filing a return it must be assessed separately whether to include it.