Insurance Salary

In work abroad, earnings that form the basis for the pension are called insurance salary.

Five essential facts:

• Employer's and employee's pension contributions are based on the insurance salary.
• Insurance salary applies to work insured under Finnish employment pension and accident insurance laws for employees sent abroad from Finland, regardless of the country in which the employee works.
• Before the work assignment begins, the employer and employee should define the insurance salary together, and it is advisable to record it in the assignment agreement in euros. The agreement should also detail the contents of the insurance salary. The employer must report the insurance salary in the income register along with the salary declaration.
• The insurance salary cannot be freely negotiated; it must comply with the employment pension law. Generally, the insurance salary should correspond to the salary that would be paid for equivalent work in Finland.
• The purpose of the insurance salary is to ensure the employee receives a pension equivalent to the Finnish level.