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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 2019

  • The employer's contribution percentage is  0,5 
  • The employee’s contribution percentage is 1,5 
  • The contribution percentage of a part-owner employee is 0,78


Contribution percentages 2018

  • The employer’s contribution percentage is 0.65 and for the part exceeding the payroll limit the percentage is 2.60
  • The employee’s contribution percentage is 1.90.
  • The contribution percentage of a part-owner employee is 0.92
  • 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 2065 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.

Employees

The employer’s unemployment insurance contribution is graded in accordance with the wages paid to the employees. The employer’s unemployment insurance contribution percentage is 0.65% of the payroll amount up to EUR 2,083,500, and 2.60% of the payroll amount for any part exceeding this. The wages paid to part-owners are not taken into consideration in the calculation of the payroll limit. The payroll limit is adjusted annually by the employees’ wage coefficient, in accordance with the Employees Pensions Act. 

The employee unemployment insurance contribution percentage is 1.90%, and the employer deducts it from the employee’s wages upon each payment of wages.

The employer must pay both contributions by the due date, using payment forms provided by TVR.

Part-owners’ contribution percentages

If an employer pays wages to a part-owner, the part-owner’s unemployment insurance contribution must be paid from these. The employer’s unemployment insurance contribution of a part-owner is 0.65% of the payroll amount.

The part-owner’s employee unemployment insurance contribution percentage is 0.92%, and the employer deducts it from wages upon each payment of wages.

Electronic invoicing and e-invoices

Decisions and payment forms concerning unemployment insurance contributions can be accepted electronically via an online invoicing service or as e-invoices.

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 want to receive an electronic invoice to replace a payment form that has already been posted, please contact our customer service team. We do not automatically send electronic invoices to replace payment forms that have previously been posted.
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 payment period or payment plan
  • A payment default entry in a credit record
  •  A payment that has entered recovery proceedings

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

 

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: 23/10/2019