Charging travel expenses to a customer and deciding how much to charge is entirely up to the entrepreneur. Tax-free allowances defined by the tax authority have nothing to do with this. In other words, the travel costs billed to a customer and the travel reimbursements an entrepreneur pays to themselves (or to their employee) are two completely separate matters. The entrepreneur can decide whether to bill, for example, mileage separately from the customer or whether those costs are included in the hourly rate.

It all starts with the agreement

Travel expenses can always be billed from a customer, as long as this has been agreed upon. If the work is performed at the customer’s premises or at a location specified by the customer, some form of travel will be required—and that creates costs, which can then be billed. These costs can be included in the actual service price, but often it is simpler to just add them as a separate line on the invoice.

Travel expenses billed to a customer may include daily allowances, accommodation costs, compensation for travel time, or mileage allowances, but in practice invoices most often only show mileage costs.

How much?

No one sets a specific limit on how much an entrepreneur can bill for travel expenses. It is entirely at the entrepreneur’s discretion. Of course, a sense of reason is useful—for instance, a rate of ten euros per kilometer would likely scare customers away.

In 2025, the official mileage allowance defined by the Finnish Tax Administration is 0.59€ per kilometer and the full daily allowance is 53€. These figures can be used as a reference point. In particular, if the entrepreneur pays themselves (or an employee) mileage allowances or daily allowances, it makes sense to bill the customer at least according to these official amounts. Charging less than that will inevitably leave the entrepreneur at a loss.

Actual costs

If one has the time and interest, mileage can also be billed based on actual costs. Calculating the actual costs requires a bit of math and consideration.

Simppa Sähkäri does most of his work at customers’ premises and bills mileage separately. Simppa does not rely on the official mileage allowance but prefers to bill according to actual costs.

The car is valued at 45,000€ and depreciates 15% per year, which equals 6,750€. Taxes and insurance total 1,300€ annually and Simppa spends 2,000€ on repairs and maintenance each year. He buys new tires every four years at a total cost of 1,600€, which averages 400€ per year. Altogether, the car’s annual expenses come to about 10,500€.

Simppa drives an average of 30,000 kilometers per year. The car consumes 10 liters of diesel per 100 km, which costs him 6,600€ annually (with diesel priced at 2.20€ per liter).

Including fuel, the car’s annual costs are 17,100€. Divided by the kilometers driven, this gives a cost of 0.57€ per kilometer.

On top of this, Simppa adds 24% VAT, bringing the final price per kilometer to 0.70€ including VAT.

VAT on travel expenses billed to customers

When travel expenses are billed to a customer, they are considered VAT-liable sales if the entrepreneur is registered for VAT. If not, then VAT does not need to be added to travel expenses either. Although tax-free travel reimbursements paid by the tax authority are not subject to tax, they are a completely different matter than the travel expenses billed to customers. From the tax perspective, billing travel expenses from a customer is essentially a normal sales transaction and the VAT rate applied depends on the entrepreneur’s main service.

Simppa Sähkäri is VAT-registered and provides electrical installation services subject to 24% VAT, so his travel expenses are also billed with 24% VAT.

Mauri Moppi, on the other hand, operates under VAT-exempt social care services and makes home visits to customers. Since his main service is VAT-exempt, no VAT is added to the travel expenses he bills to his clients either.

In Summary

Billing travel expenses to customers is very much like the Wild West—everyone does it in the way they find best. In the end, billing travel expenses is just a normal sales transaction, and the only one who decides the price is the entrepreneur themselves.