Recruiting an employee

In taxation, the employer is regarded either as a casual or a regular employer.

A company that acts as a regular employer must always register with the Employer Register.

• Your company is a regular employer when the company pays a salary to two or more employees permanently or when the company pays a salary to one employee permanently and also to one or more employees whose employment relationship is temporary or intended to be short-term.
• The criterion for regular working hours is also met if the company pays a salary to at least employees simultaneously even if their employment relationships are temporary and intended to be of short duration.

Employers paying salaries occasionally do not need to register with the Employer Register.

• A company that employs only one permanent employee or one to five employees whose employment relationship does not last for the entire calendar year is considered a company that pays salaries occasionally.

Report the company to the Employer Register in MyTax.

A company must register with the Employer Register if it has a permanent establishment in Finland and acts as a regular employer.

Report the company to the Employer Register as follows:

• if the company does not yet have a Finnish business ID, go to the Business Information System (BIS) and launch a start-up notification Y1, Y2 or Y3
• if the company has a Finnish business ID, go to MyTax or BIS and submit a change notification Y4, Y5 or Y6.

A foreign company does not need to register in the Employer Register if it does not have a permanent domicile in Finland in income taxation. A company may register itself in the Employer Register voluntarily. In this case, it has the same obligations as a company that a permanent domicile in Finland.

The employer must:

• pay the employee the salary specified in the employment contract.
• withhold tax from the employee's salary and pay it to the Tax Administration.
• withhold the employee's share of the earnings-related pension and unemployment insurance contributions from the salary.
• enter the paid salaries, fringe benefits, fees, compensation for work and other earned income to the Incomes Register. Tax-free and taxable cost compensations must also be reported.

If you have an accountant, agree with them on the payment of the new employee’s salary.

If you do not have an accountant:

• find out how to handle payroll and withholding tax correctly
• if necessary, use the Finnish Tax Administration's free Palkka.fi service.

Read the Tax Administration's instructions:

• Finnish Tax Administration's instructions on employer's obligationsOpens in a new window.
• Tax card instructions issued by the Finnish Tax Administration to employers (in Finnish).Opens in a new window.

You do not need to withhold tax from the salary if the salaries you pay per year are:

• no more than EUR 1400
• more than EUR 1400 but the salary of a single person does not exceed EUR 1,500 per year.

The tax liability of foreign workers depends on the duration of their stay in Finland. The salary is subject to either normal withholding tax or tax at source in accordance with the tax card.

The employee must themselves contact the Tax Administration and request the tax card they need.

A foreign company does not need to pay withholding tax if it does not have a fixed establishment in Finland, the employee resides in Finland for a maximum of one month, and the employee does not present the employer with a tax card stating that the withholding tax must be paid.

Taxes must be withheld from monetary compensations paid to unpaid trainees. Withholding tax is only paid on non-monetary benefits if the trainee is also paid a monetary compensation.

If you have an accountant, agree with them on withholding tax on the trainee's benefits and compensation. If you do not have an accountant, study the Tax Administration's instructions on taxation of benefits and compensation paid to trainees (in Finnish)Opens in a new window..

If you rent an employee from a foreign company, you must collect tax at source on the compensation paid for work performed in Finland.

• The rate of tax at source is 13% if a foreign company is a limited liability company, other organisation or a joint venture.
• If the foreign company is a trader, the withholding tax rate is 35%.

The tax does not need to be collected if the foreign company is in the prepayment register or presents either a 0% tax-at-source card or other clarification that prevents the tax from being collected.

Take out for employee:

• pension insurance from the pension insurance company or pension fund of your choice
• occupational accident and disease insurance and, if necessary, group life insurance for employees from the insurance company of your choice.

If a foreign worker has a valid A1 certificate from another EU/EEA country, take care of the statutory social insurance policies in the country that issued the A1 certificate.

More information:

• Contact details of earnings-related pension insurers - Työeläke.fiOpens in a new window.
• Taking out workers’ compensation insurance and group life insurance for employees - tvk.fiOpens in a new window.
• Contact information for insurance companies issuing occupational accident and disease insurance - tvk.fiOpens in a new window.
• What is an A1 Certificate - etk.fiOpens in a new window.

As a rule, remote work carried out in Finland is always insured in Finland. This means that the employer must take out all statutory social insurance policies in Finland for the employee.

Some EU countries have entered into a mutual agreement according to which a worker performing remote work and on-site work in two EU countries can, under certain conditions, be insured in the employer's home country instead of their own country of residence.

For additional information on insuring a remote employee, visit the website of the Finnish Centre for Pensions:

• Remote work for a foreign employer in FinlandOpens in a new window.
• EU agreement on remote workOpens in a new window.

A foreign employer may to authorise an employee to take out statutory social insurance policies from a Finnish insurance company.

For detailed instructions and a power of attorney template, see the Finnish Centre for Pensions' page on Social insurance contributions in Finland.Opens in a new window.

An employer must arrange at least preventive occupational health care for its employees. You can also organise general practitioner-level medical care services and other medical and health care services for your employees. More information on statutory occupational health care

You can purchase occupational health care services at a location of your choice. Ask for quotes from different service providers to compare costs and contract content. If you do not yet have occupational health care, you can include yourself in the same agreement.

The services are provided by the public sector, such as wellbeing services counties and municipal enterprises, occupational health associations and private medical centres.

Make a written agreement and an action plan on organising occupational health care with the selected occupational health care service provider.

When a new employee starts work in your company, remember to notify the occupational health care provider of their details and agree on a new employee health examination if necessary.

The temporary agency organises the occupational health care of the temporary agency worker. Make sure that the temporary agency has arranged occupational health care appropriately and that it has the necessary information on the employee's working conditions for reporting them to its occupational health care provider.

If you have not yet taken out liability insurance for your company, consider taking one out, since it also covers liabilities for damage arising from the employee's activities.

There are different types of liability insurance, so compare the contents and prices of the agreements of different insurance companies.

Get the items the employee needs so that they are available to them at the start of the work, such as:

• Keys or access passes
• Computer and phone
• Access rights to systems
• Workspace or space to work in