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Employer Obligations in Finland

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.

Main Responsibilities of Employers in Finland

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 Information on responsibilities, obligations, permits and more
  • Rules of Working Life Finnish regulations on Employment, Working time, Holidays, Wages, Termination and more. Produced by Suomi.fi

Occupational Healthcare

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:

Employers can also provide healthcare services in-house by maintaining an occupational healthcare clinic by themselves or in cooperation with other employers.

Obligations of a Foreign Employer

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 social security. 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

Posted Workers in Finland
Employers posting foreign workers in Finland must comply with a range of obligations including reporting postings in advance,ensuring workers' right to work, maintenance and provision of documentation, appointing an employer’s representative in Finland, complying with labour laws and more.
The Occupational Health and Safety Administration in Finland website has instructions for employers and employees.
See: www.tyosuojelu.fi > Posted Worker
See also: www.suomi.fi > Posted Workers

Employer's Representative in Finland
Foreign companies posting workers in Finland must have a representative in Finland whom the posted workers and the authorities can contact at all times during the posting. The representative must be competent to act for the company in a court of law and to receive on behalf of the company all documents, including summons, issued by the authorities. Practically, the representative is authorised to act on behalf of the company and handle official transactions on behalf of the company. Communication with the authorities is carried out via the representative.
A representative must be appointed before the work is started, but is not required if the post is no more than 10 days in duration. Failure to appoint a representative when required may incur a significant financial penalty.
See: www.tyosuojelu.fi > Employer's Representative

Representative in Finland is a service specializing in representing foreign companies in Finland. The site also includes useful publications and information on the relevant legislation.
Web:representativeinfinland.com
Contact:Mikael Liespuu
Phone:+358 50 374 9195

Assistance with Finnish Employer's Obligations

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

Further Assistance
Suomi.fi offers assistance online, by telephone, and in person:
www.suomi.fi/company
To request a telephone call, visit
suomi.fi/instructions-and-support/

Pension Insurance for Finnish Employers and Entrepreneurs

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 turnover.
See Työeläke.fi Pensions for the Self-employed
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 websites www.tyoelake.fi and www.etk.fi provide comprehensive information on numerous pension insurance matters including:

  • Insuring in Finland: For employees, self-employed, foreign employees, more...
  • Pension insurance liabilities, obligations and supervision
  • Applying for a pension
  • Pension estimates
  • Pension records
  • Työeläke.fi www.tyoelake.fi: Pension types, amounts, benefits, application, payment and your pension record online, Employer obligations, Pensions for self-employed, Working abroad, and Find a pension provider. Site in 5 languages, including advice for people newly arrived in Finland.
  • Eläketurvakeskuks: www.etk.fi The Finnish pension system, Work and pensions abroad

Pension Insurers in Finland  Sites in English

Statutory Accident Insurance

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

Pay Subsidy for Finnish Employers

In certain circumstances the Ministry of Economic Affairs and Employment can grant a subsidy for salary costs to an employer recruiting an unemployed job seeker. The objective of work arranged through a pay subsidy is to improve the vocational skills, competence and labour market position of the unemployed job seeker 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 job seeker the company intends to employ on the pay subsidy is registered as unemployed
  • TE-Offices: toimistot.te-palvelut.fi Finnish only

Related Links
Links to other sites are direct to the relevant page, where possible

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Expat Finland is a project by Stuart Allt 2004 -