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Purchase Price, Wages, or Payment for Labour?

When selling works of art, it is important to determine the type of consideration being charged, as this impacts taxation and pension contributions.


1. Sale of a Finished Work of Art

When a completed artwork is sold (e.g., from an exhibition), the payment received is considered a purchase price. This applies even if the seller is the artist and most of the price reflects their creative effort.

  • The purchase price is not considered payment for labour.
  • No tax is withheld nor are social security or pension-insurance contributions required.
  • Value-added tax (VAT) on the sale depends on whether the artist is liable for VAT. See Value-Added Tax Instructions for Visual Artists.


2. Payment for Labour on a Commissioned Work

A commissioned artwork is generally not considered a sale of goods. Instead, the payment is regarded as compensation for work performed.

  • For example, a commissioned portrait is classified as payment for labour rather than a purchase price, according to tax authority guidelines.
  • If the artist is registered in the prepayment register, no tax is withheld from the payment. If not, tax must be withheld, and the artist must provide a tax card to the commissioner.
  • No employer’s social-security contributions are required for this payment.
  • Pension-insurance contributions depend on the situation:
    • Normally, they are not required.
    • However, municipal pension-insurance contributions apply if a municipality commissions the work, unless the artist has YEL self-employed pension insurance.
    • Only the portion of the payment covering labour (excluding material and outsourcing costs) is subject to municipal pension-insurance contributions. These costs should be itemised in the commissioning contract.

3. Wages for Commissioned Works

In rare cases, commissioned work may be performed within an employment relationship, though this is uncommon as artistic work does not typically involve employer supervision.

  • In such cases:
    • Tax withholdings apply.
    • Employer’s social-security contributions are required.
    • Statutory employee pension-insurance payments (TyEL) must be made.

For further information on taxation, see the Finnish Tax Administration’s guide on Wages and Compensation for Work in Taxation (Verohallinnon ohje: palkka ja työkorvaus verotuksessa).