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Responsible for the service TE Office

Pay subsidy for hiring an unemployed person

  • Service
  • Nationwide except the Åland Islands
  • Public service

A pay subsidy is an economic benefit that the TE Office may grant an employer to cover the costs of hiring an unemployed jobseeker.

The purpose of the pay subsidy is to advance the employment of jobseekers on the open labour market when they have shortcomings in their professional skills, or suffer from an injury or illness that affects their ability to cope at work. Although a pay subsidy is granted and paid to the employer, the granting of the subsidy is always based on the unemployed jobseeker's need for the service.

Employers eligible for pay subsidy are:

  • companies
  • other communities, such as associations, foundations, congregations and registered religious communities
  • municipalities and joint municipal authorities
  • households.

A pay subsidy may be granted

  • For open-ended or fixed-term employment and for apprenticeship training.
  • For part-time employment if the granter of the subsidy feels that it is appropriate and that it promotes the jobseeker’s possibilities to find employment.

The TE Office decides on the duration and amount of the subsidy on a case-by-case basis.

  • The length of the subsidy period depends on the duration of the individual's unemployment, the impact of the disability or illness on work performance, and on the employer.
  • Pay subsidy can be up to 30%, 40% or 50% of pay costs.
  • The maximum pay subsidy is set in the state budget. In 2019 the maximum is € 1400 a month, in addition to which a percentage of holiday pay up to the level of the pay subsidy decision will be paid.

If a jobseeker has a pay subsidy card, it means that the TE Office has confirmed the possibility of granting pay subsidy, if the prerequisites concerning the employer and the employment relationship are met.

Pay subsidy can be granted without a pay subsidy card if the possibility for subsidised employment has been indicated in the jobseeker’s employment plan.

Before applying for a pay subsidy, carefully study the instructions in the application form.

Do the following

  1. Apply for pay subsidy online in good time before starting the employment relationship. If you cannot submit an electronic application, send your application on paper to the regional TE Office of your employment or your residence.
  2. Before making the decision, the TE Office shall confirm the prerequisites for granting the subsidy, as well as information related to taxes, and request for further information if necessary.
  3. Your employment relationship may start only after the TE Office has granted the pay subsidy to the employer.

If you apply for continuation to the pay subsidy, submit your application before the end of the support period. The employment relationship must continue immediately after the previous support period.

Apply for the payment of a pay subsidy afterwards in the KEHA Centre’s online service.

  • Additional information about the electronic payment application or any clarification requests can be viewed in the E-services for personal customers. Thus, you should follow the status of your application regularly.
  • If you are unable to apply electronically, please submit a payment application with relevant attachments to the KEHA Centre by post.
  • Study the instructions provided by the KEHA Centre regarding the payment application.
  • KEHA Centre answers requests for information via e-mail.

General advise on pay subsidy and its payment, as well as assistance in electronic transactions is provided by the Enterprise Finland Telephone Service.

To whom and on what terms

Pay subsidy is a discretionary form of support that a TE Office can grant within the framework of available funding, and if the TE Office deems it an appropriate way of advancing the employment of an unemployed jobseeker.

The employer must commit to paying a wage in accordance with an applicable collective agreement or, if no applicable collective agreement exists, a prevalent and reasonable wage for the job in question.

A pay subsidy may not be granted to an employer in the following circumstances:

  • If the salary of the person hired with the subsidy is solely based on the outcome of their work: for example, the wage consists of a selling commission with no basic salary.
  • If the subsidy distorts competition compared to others offering the same products or services.
  • If the employer has substantially neglected the duty to pay salaries, tax payments or statutory charges.
  • If the employment relationship for which the subsidy is intended started before the decision on granting the subsidy was made.
  • If the employer conducting business practices is a company in trouble referred to by the General Block Exemption Regulations of EU State Aid or if the European Commission has issued a negative Recovery Order against the employer, which declares the subsidy as illegal or unsuitable for the internal market.

Pay subsidy may not impair the position of the employer’s other employees.

It is possible to receive pay subsidy in spite of termination or temporary layoffs, if the employer has, before submitting a pay subsidy application, offered work to employees who have been terminated or temporarily laid off for financial or production-related reasons.

Pay subsidy cannot be paid if:

  • the employer does not comply with the terms of the pay subsidy decision
  • it is discovered after granting the subsidy that the prerequisites for the pay subsidy are not fulfilled
  • pay subsidy has been granted erroneously, in excessive amounts or without justification.

The service is free of charge.

Basic information

The service is provided byTE Office, Development and Administration centre for ELY Centres and TE Offices
Other responsible organisationsPohjois-Savo TE Office, Kaakkois-Suomi TE Office, Pohjois-Pohjanmaa TE Office, Satakunta TE Office, Development and Administration centre for ELY Centres and TE Offices, Etelä-Savo TE Office, Etelä-Pohjanmaa TE Office, Pirkanmaa TE Office, Häme TE Office, Kainuu TE Office, Varsinais-Suomi TE Office, Uusimaa TE Office, Keski-Suomi TE Office, Pohjanmaa TE Office, Lapland TE Office, Pohjois-Karjala TE Office
Responsible for the serviceTE Office
Area Whole Finland (except Åland)
Available languagesFinnish, Swedish, English
Text edited by: TE Office
Updated: 4/20/2020