From a sole entrepreneur to an employer

Congratulations – your business has grown to the extent that you can start hiring extra help.

Before hiring employee, it is good to understand the obligations of an employer which are based on laws and collective agreements. We have gathered an extensive information package regarding the role of the employer in the Guide to Entrepreneurship.

The statutory obligations in a nutshell

Take the following insurances for your employees: a pension insurance (TyEL insurance), an unemployment insurance, insurance for occupational accidents and diseases, and a group life insurance.

Report payed waged and health insurance contributions to the Incomes Register. You can authorise your accounting firm to file the reports and to pay the employer contributions on your behalf.

Arrange preventative occupational health care for your contractual employees. Occupational health care is free of charge for your employees. Kela will pay you compensation for the necessary and reasonable costs of arranging occupational health care.

Take into account even matters regarding occupational safety. Different industries have their own safety and health regulations which must be observed. The employees must always be provided with sufficient information about hazards and risks at the work place. Additional information at the website of the Occupational Safety and Health Administration in Finland.

Support in hiring an employee

If you hire an unemployed jobseeker, you are eligible to receive a pay subsidy to cover some of the pay costs. The granting of the pay subsidy is a discretionary support that the Employment and Economic Develpment Office (TE Office) can grant when the jobseeker’s unemployment is caused by the lack of professional competence. The subsidy is compensation for you having to use your own time more than normally to introduce the employee to work.

The amount and duration of the subsidy will depend on the length of the individual’s unemployment period. The pay subsidy can cover up to 50% of the payroll costs and in 2021 the maximum is €1,400 a month. Note that the employment relationship cannot start before a written decision on granting the subsidy has been made.

Read more about the pay subsidy at the website for TE services.