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Paying unemployment insurance contributions

The employer and the employee are both liable for payment.  The employer pays the contributions of both parties to the Employment Fund in accordance with the annual payment percentages. The employer must always deduct unemployment insurance contributions from the salaries paid to employees who are liable to make such contributions, even if their annual payroll sum does not exceed EUR 1,300. In this case, the employer can keep the deducted sum. The pay is always reported to the Incomes Register (as of 2019) as subject to an unemployment insurance contribution liability if the employee’s unemployment insurance contribution must be deducted from his/her pay. The Employment Fund will monitor whether the threshold has been surpassed and a payment will be levied when the payroll threshold has been surpassed.

We will send payment forms to the employer by post. We may also send payment forms electronically if you have informed us of your e-invoicing address. Private individuals and associations may also order payment forms as e-invoices on their own online banking service.

Payment of the unemployment insurance contribution as of 2019

Unemployment insurance contributions can be paid from the beginning of 2019 on the basis of actualised pay information reported into the Incomes Register. The new output model makes the payment of unemployment insurance contributions clearer: the system is up to date and light to maintain, and separate notifications are no longer necessary. A payment model based on actualised wages is easier to use especially by small employers and those who offer work irregularly, with the wages varying during the year.

Invoicing in the output model takes place in April, July, October and January. Invoicing in the prepayment model, on the other hand, takes place on 2 January, 1 April, 1 July and 1 October.

Remember to use electronic invoicing. With regard to unemployment insurance contributions for 2019, decisions regarding them are available electronically together with the invoice. Invoices will always be sent, both in the advance and output model, separately for each instalment, and we can also send credit notes. In future, there will no longer be separate due dates for employees and employers.

The actual earnings model

Compared to the current practice, the actual earnings model will allow unemployment insurance contributions to be paid closer to the real time. The equalisation method will no longer be needed. . You will only need to report the payroll information to the Incomes Register and pay the invoice sent by the Employment Fund. This model will reduce the administrative burden and there is no need to submit reports separately to the Employment Fund. The implementation to the actual earnings model does not require separate measures from you. Employers will be transferred to invoicing based on actual earnings by default.

In actual earnings model, you pay lower unemployment insurance contributions until the payroll amount exceeds the limit. Higher unemployment insurance contributions should be paid after the limit have been exceeded. In general, all employers pay unemployment insurance contributions according to the actual earnings model.

Changing from one model to another

If you begin paying wages during the insurance year, you must request for the prepayment model before you submit your first earnings payment data report to the Incomes Register. If you want to deploy the prepayment model later, you must send a request to the Employment Fund by 15 November of the previous year in our online service. You will not be able to change your payment method during the insurance year.

If you prefer the prepayment model, remember to inform us about it through our online service by 15 November. Send reports through our online customer service under Employer's details. You cannot change the payment method in the middle of an insurance year. Even if you decide on the prepayment model, payroll information must be reported to the Incomes Register.

But if you have previously informed us that you want to use the prepayment model, what you have reported to us will remain valid for as long as you change the payment method or inform us that you have ended the business operations. If you inform us that you have ended business operations (final in the middle of an insurance year), you will, as of the beginning of the next insurance year, be automatically included in the output model unless you specifically request that the prepayment model be used.

If wage payment begins in the middle of an insurance year, any request to use the prepayment model must be sent to the Incomes Register before sending your first earnings payment report. When reporting, you must give an estimate on the coming year's wage payments. Prepayments are invoiced in four equal instalments on 2 January, 1 April, 1 July and 1 October. Prepayment notifications and changes are always sent to the Employment Fund. The final payment is determined on the basis of wage sums reported to the Incomes Register after the end of the insurance year but before the end of June of the following year. Adjustment payments and prepayment refunds factor in the adjustment payment interest.

You can change the prepayment wage sum during the insurance year. However, you cannot change the prepayment to be lower than what has been recorded in the Incomes Register up to that point as wages affecting unemployment insurance contributions

Contribution percentages

Contribution percentages 2020

  • The employer’s contribution percentage is 0.45%. 1.70% for the part exceeding the payroll limit (EUR 2,125,500)
  • The employee’s contribution percentage is 1.25%
  • The contribution percentage of a part-owner employee is 0.65% and the unemployment insurance contribution percentage paid for a part-owner is 0.45%

Contribution percentages 2019

  • The employer’s contribution percentage is 0.5%, or 2.05% for the part exceeding the payroll limit (EUR 2,086,500)
  • The employee’s contribution percentage is 1.5%
  • The contribution percentage of a part-owner employee is 0.78%
  • The employee unemployment insurance contribution will be 1.5 % of the wage.
  • The employer’s contribution will be 0.5 % of the wage up to a total payroll of EUR 2 086 500 and 2,05 % for the part that exceeds this limit.
  • The employee unemployment insurance contribution for partial owners of a company will be 0.78 % of the wage.
  • The employer unemployment insurance contribution for partial owners of a company will be 0.50 % of the wage.

The unemployment insurance contribution payable by unincorporated government enterprises will be 0.50 % of the wage up to a total payroll of EUR 2 086 500 and 1,16 % of the wage for the part that exceeds this limit.

The unemployment insurance contribution payable by universities will be 0.50 % of the wage up to a total payroll of EUR 2 086 500 and 1,38 % of the wage for the part that exceeds this limit.

Employer unemployment insurance contribution
The employer’s unemployment insurance contribution is graded in accordance with the salaries paid to the employees. In 2020, the employer’s unemployment insurance contribution percentage is 0.45% of the payroll amount up to EUR 2,125,500, and 1.70% of the payroll amount for any part exceeding this. The salaries paid to part-owners are not taken into consideration in the calculation of the payroll limit.

Employee’s unemployment insurance contribution
The employee’s unemployment insurance contribution percentage is 1.25%, and the employer deducts this from the employee’s salary when the salary is paid.

The employer pays both contributions by the due date using payment forms sent by the Employment Fund.

Part-owner’s unemployment insurance contribution
The part-owner’s own unemployment insurance contribution is paid from the salary. The employer’s unemployment insurance contribution for a part-owner is 0.45% of the payroll sum.

The unemployment insurance contribution percentage for employees who are also owners is 0.65%. The employer will withhold this from the salary when the salary is paid.

The unemployment insurance contribution of state-owned companies is 0.45% of the amount of paid wages up to a total payroll of EUR 2,125,500, and 0.99% of the wage for the part that exceeds this limit.

The unemployment insurance contribution payable by universities is 0.45% of the wage up to a total payroll of EUR 2,125,500, and 1.21% of the wage for the part that exceeds this limit.

Invoicing and invoicing methods

We send invoices concerning unemployment insurance contributions either by post to the invoicing address you have provided, as electronic invoices to the electronic invoicing address, or as e-invoices to your online banking provider. If the customer has not notified any invoice address, we will send the invoice to the register address available in the public registers. We do not use invoicing by e-mail.

In order to receive an invoice, check that your contact information is correct in our online service. You can check and update your information in the section Employer's details. Alternatively, you can also contact our customer service.

If you need to know which invoicing period the invoice applies to, you can find it on the decision. The decision has been provided either as an attachment to the invoice or separately by post. You can also check the information on the decision and the invoice in our online service. You can find the invoice we sent in the section Contributions and decisions.

Invoicing is based on the earnings payment report filed in the Incomes Register. If wages subject to an unemployment insurance contribution paid during the invoicing period have been reported, the invoice is generated based on those wages. Please note that we send invoices four times a year: in April, July, October and January. This means that the employment relationship may have ended before we send the invoice; in that case, the invoice applies to the time when the wages were still being paid.

You can receive payment forms for unemployment insurance contributions as electronic invoices by reporting your electronic invoicing address to the database of e-invoicing addresses managed by TIEKE (The Finnish Information Society Development Centre).
Note: In the following situations, please provide your electronic invoicing details directly to the Employment Fund:

  • If you use the electronic invoicing address of an accounting firm, substitute payer or other representative instead of your own electronic invoicing address.
  • If you want to use an electronic billing address other than the one in TIEKE to accept unemployment insurance contribution payment forms.
  •  If your business has multiple electronic invoicing addresses, please provide the address that you use to the Employment Fund.
    Individual customers can, instead of electronic invoicing, make an agreement on e-invoicing through their own online banking services.

If you wish to start using electronic invoicing in the future, please contact our customer service. Unfortunately, we cannot send invoices that were previously sent on paper again in electronic format.

Make sure that your invoicing details are up to date. You can update your contact details on our online service. You can access your invoices and decisions on our online service, as well as up-to-date payment details as of 2019.

You may also choose to receive payment forms as e-invoices. To receive e-invoices, you must make an agreement on activation of the e-invoice service with your online banking provider and select the Employment Fund as the sender of the e-invoices. Contact your bank for further information on how to activate the e-invoice service.

Credit note

The Employment Fund will issue a credit note in situations where you or your company have been billed too much and the amount of payment has changed. Credit notes may be issued for unemployment insurance contributions, liability components or employment termination dispute compensations. The detailed reason for the crediting is stated on the credit note.

Example: You have reported in the Incomes Register to have paid a total of 15,000 euros in salaries subject to unemployment insurance contributions between January and March, and received the invoice corresponding to this report in April. In June, you notice that your payroll reports contained errors. After submitting the corrections in the Incomes Register, we will issue you a credit note.

Credit notes for unemployment insurance payments are usually processed quarterly after the end of the following billing period in January, April, July or October.

Example: You are expecting a credit note due to corrections made in June to your payroll report from January to March. You will receive both the invoice for salaries paid from April to June as well as the credit note for January to March in July.
If your case concerns a liability component or a credit note for employment termination dispute compensation, you will receive the credit note after the Fund has processed your case. Credit notes for these payments may be issued at any time during the year.

Credit notes are always primarily used for the invoice containing the excess charge, provided that the invoice is still outstanding. This requires no action from your part and you can automatically deduct the credited amount from the invoice you received. Please note that any collection fees must also be paid as normal debt collection measures continue while your credit note is being processed.

Example: You received an invoice of 300 euros for unemployment insurance contributions from January to March. After finding out that you paid less salaries from January to March than previously thought, you made corrections in the Incomes Register in June. You did not pay the invoice for January to March and in July, you receive both the invoice for salaries paid from April to June as well as a credit note of 30 euros for salaries from January to March. Because the credit note applies to January-March and the original invoice is still outstanding, you must pay the difference of 270 euros. In addition, the invoice may have accrued collection fees if it was not paid until after the due date. We will charge any late payment interest on a separate invoice at a later date.

If you have already paid the invoice which the credit note concerns in full, the credit is automatically deducted from any other outstanding or due invoices for similar payments. This means that if your credit note concerns unemployment insurance contribution, the credit may be deducted from any other due unemployment insurance contributions. In turn, if the credit note concerns liability components, the deduction may be made only for other due liability component. Similarly, in the case of compensation due to an employment termination dispute, the deduction may be applied to other similar payments.

Example: The credit note concerns employer and employee unemployment insurance contribution from January to March, and you have already paid the invoice in question. Because you receive the credit note at the same time with the invoice for unemployment insurance contributions from April to June, the credit is applied to that invoice. In contrast, the Fund may not apply the credit to your liability components, for example, unless you separately request this from the Fund’s customer service. To check how your credit note is used, login to our online customer service or contact our customer service.

If neither of the above examples apply to your situation, your credit note may have been used to pay other outstanding invoices or reimbursed to your account. If you are unsure how your credit note is used or wish to use it in some other way, please contact our customer service to arrange the matter.

As a rule, invoices should be paid in full by the due date. Otherwise, it is possible that debt collection for the invoice continues, causing collection fees and even payment default entries. To avoid these, you should pay any invoices in full by the due date. Our customer service will provide more information on how to proceed with an invoice.

The total sum must be paid using the reference number and bank account stated on the invoice. Do not use the information listed on the credit note to pay invoices. This ensures that your payment is received by the Fund and recorded in the correct account and invoice.

This type of a situation may arise due a number of causes. In these situations, you should immediately contact our customer service to check the status of your invoice and the reason for receiving a collection letter.

Overdue payment

Contact us as soon as possible if you are unable to pay your unemployment insurance contribution by the due date.

Contact us if the matter involves any of the following:

  • Collection letters
  • The term of payment or payment schedule
  • A payment default entry in a credit record
  • A payment that has entered recovery proceedings

Please note that unemployment insurance contributions are directly distrainable. Overdue unemployment insurance contributions may lead to a payment default entry in the credit record.

If you have already received a collection letter and its due date has passed, please contact our customer service by telephone in order to agree on a payment schedule and avoid unnecessary collection measures. We charge a payment plan fee for dividing the payment into instalments; it will be invoiced separately. Currently the payment plan fee is 10 euros.

In our online service, you can request an extended payment period or payment of the invoice in instalments.

You can request for an extension in the Events and messages tab of the online service:

  1. Click Send a message
  2. Select I would like an extension
  3. Please state the invoice, for which you would like to change the due date and whether you wish to move it by 7 or 14 days
  4. To finish, click the Send button under the text field

You can extend the payment period for 7 or 14 days without extra charge. However, the penalty interest must be paid for the extended payment period, too.

You can request for paying the invoice in instalments in the Events and messages tab of the online service:

  1. Click Send a message
  2. Select I would like to arrange a payment plan
  3. Please state the invoice, for which you would like to arrange a payment plan
  4. Select one of the options offered (three fixed instalments to be paid bi-weekly or four fixed instalments to be paid weekly)
  5. To finish, click the Send  button under the text field

We charge a payment plan fee for dividing the payment into instalments; it will be invoiced separately. Currently the payment plan fee is 10 euros. In addition to the payment plan fee, you also need to pay the penalty interest based on the actual payments.

Collection process

The Employment Fund uses two different collection process depending on whether the party that failed to pay the invoice was a private individual or a legal person, that is, whether the debt is collected from a natural person with a personal identity code, or a company or organisation operating under a business ID. Please note that the collection processes have only been described in outline, meaning that in certain cases the collection process may differ from what has been described below.

Invoicing always begins when an invoice with a payment period of 21 calendar days is sent to a private individual. This invoice is called the invoice or the original invoice. The invoice has the due date, by which the invoice must be paid in full to ensure that the collection process will not beging. The invoice is sent by post or electronically, depending on the invoicing information you have stated in the online service of the Employment Fund. If the customer has not notified any invoice address, we will send the invoice to the register address available in the public registers.

If you neglect to pay the entire invoice or a part thereof, we will send a payment reminder. The reminder is sent by post or electronically, depending on the invoicing information you have stated in the online service of the Employment Fund. If the customer has not notified any invoice address, we will send the invoice to the register address available in the public registers. A reminder fee is added to the payment reminder. You can read more about the justification of collection charges in a separate section below.

If you neglect to pay the entire reminder or a part thereof, we will send you a second payment reminder. More collection charges will be added to this reminder in addition to the existing collection charges. This collection letter will be sent to you by post to the postal address you have provided. If the customer has not notified any invoice address, we will send the invoice to the register address available in the public registers.

The Employment Fund will not send any other collection letters to private individuals. Therefore, if the second payment reminder is not paid either, the payment and its costs will be transferred to enforcement authorities for collection after the due date. The enforcement authorities will also add their own expenses to your payment. In such a situation, you must contact the enforcement authorities directly with questions related to paying the invoice.

The Employment Fund’s collection process moves quickly from one stage to another; therefore, please contact the Fund in time if you want to arrange an extended payment period or agree on paying the invoice in instalments. The earlier you contact the Fund, the easier it is to arrange a payment agreement. Please also note that there is no safe payment period after the due date; you always pay at your own risk after the due date.

Invoicing always begins when an invoice with a payment period of 21 calendar days is sent to a company or organisation. Later, this invoice is called the invoice or the original invoice. The invoice has the due date, by which the invoice must be paid in full to ensure that the collection process will not begin. The invoice is sent by post or electronically depending on the invoicing information you have stated in the online service of the Employment Fund or what information is available in the public registers (Tieke, BIS).

If you neglect to pay the invoice in full, we will send a payment reminder. The reminder is sent by post or electronically depending on the invoicing information you have stated in the online service of the Employment Fund or what information is available in the public registers (Tieke, BIS). A reminder fee is added to the payment reminder. You can read more about the justification of collection charges in a separate section below.

If the reminder has not been paid in full by its due date, we will send a demand for payment carrying the threat of draft or ‘tratta’. Collection charges have been added to the reminder. If the payment is not made by the due date of the demand for payment, a delayed payment entry may be added to the credit report of the company or organisation and a draft (‘tratta’) may be issued. A delayed payment entry refers to an entry in the credit record of the company or organisation; more details can be found below.

If the demand for payment carrying the threat of draft or ‘tratta’ or a part thereof is not paid in full, we will send a draft (‘tratta’) to the company or organisation by post. It refers to the final collection letter sent by the Fund to a company or organisation with the new collection charges. At this point, a delayed payment entry has already been added to the credit record of the company or organisation, but if the payment is made in full by the due date of the draft (‘tratta’), no other entries will be added. If the entire receivable or a part thereof is not paid after the due date, the unpaid payment will lead to a protest.

A protest means that information of the unpaid payment can be published in a newspaper, and in addition, a payment default entry will be added to the credit record of the company or organisation. You can find more information about payment default entries below.

After the protest, the receivable is transferred to enforcement authorities for collection. The enforcement authorities will also add their own expenses to the payment. In such a situation, you must contact the enforcement authorities with questions related to paying the invoice.

The Employment Fund’s collection process moves quickly from one stage to another; therefore, please contact the Fund in time if you want to arrange an extended payment period or agree on paying the invoice in instalments. The earlier you contact the Fund, the easier it is to make a payment agreement. Please also note that there is no safe payment period after the due date; you always pay at your own risk after the due date.

Credit record entries

The Employment Fund uses a draft (‘tratta’) in collecting receivables from its corporate customers. You can read more about the collection process in section Collection process – companies and organisations. As a part of the collection process, the Fund adds two kinds of entries in the credit record of its corporate customers: delayed payment entries and payment default entries.

A delayed payment entry can be added if the payment has been delayed for more than seven days. The entry will remain in the company’s credit record for six months, after which it is automatically removed. The delayed payment entry is added after the due date of the payment demand.

After the payment demand, a draft (‘tratta’) is sent to the company; it is the final collection letter sent by the Fund to a company before collection by the enforcement authorities. After its due date, a protest is issued on the draft (‘tratta’), which causes a payment default entry to be added to the credit record of the company or organisation. As a rule, the entry will remain in the company’s credit record for three years. You can contact Suomen Asiakastieto for more information about the duration of the entry. After you have paid the invoice in full, a reference entry stating that the payment has been made will be added to your payment default entry.

Paying the invoice will not remove delayed payment or payment default entries; the entries are removed only after their registration periods mentioned above have ended.

Removing credit record entries

A delayed payment entry is justified, if the payment is only made in full after the due date of the payment demand. A payment default entry is justified, if the payment is made in full on the same day when the protest is issued or only after the protest was issued. The Employment Fund will not remove justified credit record entries from any of its customers.

Penalty interest and its payment

If the original invoice was not paid on its due date at the latest, penalty interest begins to accrue on the payment. Penalty interest is accrued the day following the due date until the payment is made in full. Penalty interest is also accrued on weekends and public holidays.

Penalty interest is not included in the Fund’s collection letters, because we charge penalty interest annually. All penalty interest accrued during the whole year is included to a penalty interest invoice.

If you wish to estimate the amount of penalty interest already before you receive the interest invoice, please use online calculators for the purpose, such as the penalty interest calculator of the Finnish Tax Administration.

The amount of penalty interest is based on section 4(1) of the Finnish Interest Act .

To ensure that your payment will be allocated to the correct invoice, you must use a reference number that is completely correct. If you notice that you have not used a reference number while paying or that the reference number was incorrect, please contact our customer service to check that your payment was allocated to the correct invoice. In this way, you can avoid unnecessary collection measures.

The payment will usually appear in our online service within 1–3 working days.

If you have paid the invoice in full before the date of the collection letter, the collection charges are usually unjustified. Please check the status of the invoice from our customer service if needed in order to avoid unnecessary collection measures.

If you have paid the invoice in full after the date of the collection letter, the collection charges in the collection letter are usually justified and must be paid.

Bankruptcy and restructuring situations

Reporting of wages used as the basis for unemployment insurance contributions in the event of bankruptcy or corporate restructuring.

If the company was declared bankrupt in 2018 or earlier, we ask that you report the wages on the Wage sum report in bankruptcy proceedings form as soon you have the final figures. You can obtain the form from our customer service on separate request.

Wages paid as from January 1.1.2019 will be reported to the Incomes Register.

An authorised agent reports the wages by breaking them down to wages paid before and after the bankruptcy was declared. Any wages paid from paid security must be separated on the Wage sum report in bankruptcy proceedings form to the bankrupt company and the bankruptcy estate.

Before the declaration of bankruptcy

The wages paid by the company before the bankruptcy are reported up to the date on which the company was declared bankrupt. The controlled wages paid from pay security are reported for the time preceding the declaration of bankruptcy. Wages paid before 1 January 2019 are reported on the Wage sum report bankruptcy proceedings form in the respective sections.

Data on wages paid as from 1 January 2019 will be reported to the Incomes Register.

The unemployment insurance contributions based on these wage sums are determined under the company’s business ID.

After the declaration of bankruptcy

If the wages paid by a bankruptcy estate were paid before 1 January 2019, the wages pertaining to the time after the declaration of bankruptcy are reported on the same form in the relevant section.

Data on wages paid as from 1 January 2019 will be reported to the Incomes Register.

The wages paid from pay security pertaining to the time after the declaration of bankruptcy are also entered on the form and in the Incomes Register in the relevant section.

The unemployment insurance contributions based on these wage sums are determined under the bankruptcy estate. These are debts to be paid by the bankruptcy estate.

The unemployment insurance contributions based on these wage sums are determined under the bankruptcy estate. These are debts to be paid by the bankruptcy estate.

 

If the company is undergoing corporate restructuring, we ask that you report the paid wages up to the day prior to the date on which the application for restructuring was filed.

Wages paid before 1 January 2019 should be reported by email to our customer service at vakuutusmaksut@tyollisyysrahasto.fi.

Wages paid after January 1.1.2019 will be reported to the Incomes Register.

The unemployment insurance contributions based on the wages paid after the application was filed are excluded from the restructuring, and must be paid as usual.

Page updated: 18/12/2019