The Finnish Government’s proposal of unemployment insurance contribution percentages for the year 2021 was given to the Parliament of Finland to review on 5 October 2020. The Employment Fund submitted its proposal of next year’s contributions to the Ministry of Social Affairs and Health in August.
According to the proposal, the amount of unemployment insurance contributions would be raised by 0.32 percentage points in total. Employers’ average contribution would be increased by 0.17 percentage points and employees’ contribution by 0.15 percentage points.
This would take the average unemployment insurance contribution for employers to 1.42 per cent and the employee contribution to 1.40 per cent of payroll in 2021. According to the proposal, the lower employer contribution would be 0.50 per cent of payroll (the employer’s total payroll does not exceed EUR 2.1 million per annum) and the higher contribution would be 1.90 per cent (for the portion of payroll exceeding EUR 2.1 million).
Layoff costs have increased significantly as a result of the coronavirus epidemic this year. The State is contributing a sum equal to the basic unemployment allowance towards laid of workers’ daily allowances in 2020. The Employment Fund’s proposal of next year’s unemployment insurance contributions is based on the assumption that the State will also contribute towards laid off workers’ daily allowances in 2021. However, the funds are not included in the latest 2021 State budget proposal. It is still the Employment Fund's premise that the State must contribute towards laid off workers’ daily allowances next year as well.
The proposed amount of unemployment insurance contributions is based on the Employment Fund’s forecast, which was also used to draw up the Fund’s budget for 2021. The forecast takes into account a number of factors, including the sum of benefits that must be financed and the Fund’s other expenditure in the coming year. The Government’s proposal still needs to be approved by the Parliament of Finland. The President will then ratify the bill.
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Changes to unemployment insurance contributions payable for employee dividends, incentive stock options and relocation allowances.