Employer Obligations in Finland
- Introduction for Employers in Finland
- Main Responsibilities of Finnish Employers
- Occupational Healthcare
- Obligations of a Foreign Employer
- Assistance with Employer's Obligations
- Pension Insurance: Employers & Entrepreneurs
- Statutory Accident Insurance
- Pay Subsidy for Finnish Employers
This is a brief guide only, and does not constitute legal advice. Always check the latest rules & regulations with the relevant authorities.
Primary Source for this page: Suomi.fi
Introduction for Employers in Finland
When a company hires its first external employee, the company becomes an employer with the liabilities and obligations which apply to all employers regardless of the number of employees. These obligations include paying social security contributions, withholding the employee's shares of these contributions, and paying them forward to insurance companies.
There is a lot of advice and many services available to entrepreneurial employers free-of-charge, such as help in hiring personnel, addressing employers' obligations, and the challenges associated with terminating employment. Companies can also, subject to certain conditions, receive financial support for obtaining employees or competence.
The main responsibilities of an employer in Finland are:
- Compliance with legislation, terms and conditions of collective labour agreements, and employment contracts
- In the absence of an employment contract in writing the employer must provide the employee with written information on the terms of the employment relationship
- Payment of wages and associated remittance of withholding tax to the Tax Administration
- Arrange statutory insurance of employees and payment of insurance premiums. Such payments include employment pension insurance, accident insurance, group life insurance, unemployment insurance contribution, and social insurance premium
- Monthly and annual notifications of payrolls to the Tax Administration, pension and insurance companies and the Unemployment Insurance Fund
- Provision to the wage earner of an 'annual wage slip' showing wages paid and tax withheld during the entire calendar year
- Equal and nondiscriminatory treatment of employees and job applicants, and promotion of equality and nondiscrimination at the workplace
- Obligation to ensure the occupational safety and health of employees at work
- Obligation to arrange for and pay for statutory occupational healthcare for employees. Kela reimburses reasonable and necessary costs of providing occupational healthcare
- An employee posted to Finland is entitled to the salary determined by the Finnish collective labour agreement for the sector
- If the company has foreign employees there are additional obligations; see Employee from Abroad at Suomi.fi
Additional information for employers:
- Suomi.fi > Being an Employer
- Rules of Working Life Information on employment regulations - En, Fi, Sw
Employers are obligated to arrange and pay for statutory occupational healthcare for employees, even for one employee. A self-employed person or person conducting a profession may also arrange occupational healthcare services for him/herself.
Occupational healthcare services can be obtained from:
- a public healthcare centre
- a private clinic authorised to provide occupational healthcare services
- an independent occupational healthcare professional
Employers can also provide healthcare services in-house by maintaining an occupational healthcare clinic by themselves or in cooperation with other employers.
If a foreign company is paying wages to someone for work that is performed in Finland, the foreign company may have employer obligations related to taxation and the social security system. Employers have to pay several social security contributions in Finland. They also have to withhold the employee's shares of these contributions and pay them forward to insurance companies. However, no obligation to pay the contributions exists in the case of posted foreign employees.
See: Finnish Tax Administration > Foreign business in Finland
Suomi.fi's Being an Employer section gives advice on the following matters:
- Hiring an employee
- Employer's responsibilities and obligations
- Changes in employment
- Assessing the need for and obtaining personnel
- Management and managerial work
- Diverse working community
- Working hour arrangements and flexibility
- Employees from abroad
Pension insurance is an obligation for both employers and entrepreneurs. Employers are liable to take out insurance known as TyEL for all employees and to pay the insurance contributions to an authorised pension provider; these include insurance companies, company pension funds, industry-wide pension funds or other similar pension funds.
- The length of the employment contract has no significance
- The obligation to take out insurance also concerns private households when they act as employers
A self-employed person must take out insurance known as YEL for himself or herself. Pension insurance must be taken out within the first six months of self-employment, and when the business activity has lasted at least 4 months. The self-employed person's
insurance contributions are based on the confirmed income
from self-employment and not for instance on the company's
Note: Being self-employed impacts your social security entitlements!
Finnish Centre for Pensions, Eläketurvakeskuks
This is the central body for statutory pension insurance in Finland. Their website provides comprehensive information on numerous pension insurance matters including:
- Insuring in Finland: Insuring an Employee, Insurance for Self-Employed, Insuring Foreign Employees, more...
- Pension insurance liabilities, obligations and supervision
- Applying for a pension
- Pension estimates
- Eläketurvakeskuks: Finnish Centre for Pensions www.etk.fi
Työeläke.fi www.tyoelake.fi: Determining the Pension, Pension Benefits, Insurance, Application and Payment, The Statutory Earnings-Related Pension Scheme, Questions and Answers. In 5 languages.
Pension Insurers in Finland
Sites available in English
- Ilmarinen Mutual Pensions Insurance Company
- Varma Mutual Pension Insurance Company
- Veritas Pension Insurance Company
- Lähitapiola Group Finnish and Swedish only
- Alandia Marine Primarily serving the shipping sector
The accident insurance authority in Finland is TVK: Workers' Compensation Centre. TVK's site contains information on employers' accident insurance obligations, including:
- Duty to take out insurance
- Insurance premiums
- Who is covered?
- Neglect of duty to take out insurance
- TVK: Workers' Compensation Centre www.tvk.fi/en/ > Insurance
How and Where to Take Out Insurance
You can take out statutory accident insurance with your current insurance institution, or contact details for all accident insurance institutions are available at:
TVK www.tvk.fi/en/ > How to take out an insurance policy
In certain circumstances the Ministry of Economic Affairs and Employment can grant a subsidy for salary costs to an employer recruiting an unemployed jobseeker. The objective of work arranged through a pay subsidy is to improve the vocational skills, competence and labour market position of the unemployed jobseeker and to promote the access of those having been unemployed for long periods to the open labour market.
The pay subsidy is mainly used to employ persons who are long-term unemployed, disabled, young people aged less than 25 and jobless persons threatened by long-term unemployment or exclusion from the labour market. This subsidy can be received by State agencies and institutions, municipalities, companies and other private sector employers, such as associations, foundations and households.
Applying for a pay subsidy
- The employer can apply for a pay subsidy from the TE-Office in whose area the workplace is located, or
- from the TE-Office in which the jobseeker the company intends to employ on the pay subsidy is registered as unemployed
- TE-Offices: toimistot.te-palvelut.fi Finnish only
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