Insuring work done abroad
Are you sending an employee to work for you abroad? Or are you hireing an employee from abroad to work in Finland? Do you know what to do as an employer? Elo will provide you with assistance in these situations. Here you will find the most important information about the matters related to insuring work done abroad. If you have any further questions, call our Customer Service at +358 (0)20 694 730.
As an employer, you are obligated to arrange for the pension security of your employees regardless of whether they work in Finland or abroad. This is applicable to both Finnish and foreign employers. In addition to pension security, the obligation often concerns other forms of social security for your employees as well.
Insuring the work done abroad is governed by the legislation of both Finland and the country in which the work is being done, the EU regulations and the social security agreements made by Finland with other countries. The country in which an employee’s pension security and other forms of social security shall be arranged depends on, for example, the target country and the duration of the work assignment abroad.
An employee is sent from Finland to work abroad
When you are sending an employee from Finland to work abroad, you should clarify well in advance which country’s legislation will be applicable and then arrange the pension security for the employee accordingly.
As a rule, employees are insured in the country in which they actually work. Similarly, those working remotely are primarily covered by the social security of the country in which they are engaged in remote work. In these cases, you will pay the social security contributions to the country in which your employees are working and they will be entitled to the social security benefits in accordance with the national legislation of the country in question.
An exception to the rule above applies to those employees who are posted abroad temporarily and who may be covered by Finnish social security while working abroad. In this case, the employee will need an A1 certificate to show that they will remain covered by Finnish social security while abroad.
When sending an employee to work abroad, you will also need to apply for an A1 certificate that demonstrates your employee’s coverage under Finnish social security. The certificate is applied for using the online application service of the Finnish Centre for Pensions. Your employee will need this certificate if they are going to work in an EU/EEA country, Switzerland or a country with which Finland has a social security agreement.
An A1 certificate must always be applied for when an employee is sent to work outside of Finland’s borders. This applies to both long-term postings abroad and, for example, one day of remote working abroad. Previously, the instructions stated that a certificate was only necessary for actual, clear postings, but the Finnish Centre for Pensions changed the requirement at the start of 2023. It is not necessary, however, to apply for a separate certificate for every trip or situation, since the certificate can be granted to cover a period of two years at a time. The increase in labour mobilisation is the reason for the stricter requirements.
Salary for insurance purposes
In employment abroad, the earnings forming the basis of pension are called salary for insurance purposes. The salary for insurance purposes is also the basis for pension contributions. Irrespective of the country of posting, it applies to the work of employees posted abroad from Finland and insured in accordance with the Finnish Employees Pensions Act and Employment Accidents Act.
The employer and the employee must jointly determine the amount of salary for insurance purposes before the start of the secondment. It is advisable to always specify this salary in euros in the secondment agreement. The employer must notify the amount of the salary for insurance purposes to Incomes Register by submitting payroll reports.
The salary for insurance purposes cannot be freely agreed on; it must be in accordance with the Employees Pensions Act. As a rule, the salary for insurance purposes must be equivalent to the wages or salary that would be paid for similar work in Finland. The intention of this is to guarantee the employee a pension corresponding to the Finnish level.
A posted employee is a person who
- is sent by a Finnish employer to work abroad
- was covered by Finnish social security before being posted abroad
- carries out a work assignment abroad on a temporary basis.
Apply for a A1 certificate
You can apply for an A1 certificate if your employee is being sent to work in an EU/EEA country or Switzerland or a country with which Finland has a social security agreement.
Apply for an A1 Certificate
To which country are you sending your employee to work?
The social security agreement countries and the EU countries have similar criteria for a posted employee.
What an employer should do when sending an employee to work abroad
If you send an employee from Finland to work temporarily in an EU/EEA country or Switzerland, you will need to apply for an A1 certificate from the Finnish Centre of Pensions. The certificate proves that the employee remains covered by Finnish social security for the duration of their work abroad.
From the start of 2023, the Finnish Centre for Pensions has instructed employers to apply for the A1 certificate any time an employee is working abroad regardless of the length of the trip.
The EU countries are Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
The EEA countries include Iceland, Liechtenstein and Norway.
More information about insuring the work done in an EU country is available on the website of the Finnish Centre for Pensions
Currently, Finland has social security agreements with Australia, Canada/Québec, Chile, China, India, Israel, Japan, South Korea and the USA.
If you are sending an employee to any of the above countries, you should apply for a social security certificate through the online service of the Finnish Centre for Pensions.
More information about the contents of the social security agreements of Finland is available on the Telp.fi website (in Finnish only).
If you send your employee to work in a country without a bilateral social security agreement with Finland, or a country other than an EU/EEA country or Switzerland, the employee will remain covered by Finnish social security while working for you. Thus, you need to take TyEL insurance from a Finnish pension provider for an employee who is covered by Finnish social security at the start of the employment relationship, regardless of the employee’s citizenship.
In addition, you may also have to insure the employee in accordance with the legislation of the country in which the work is being done. As an employer, it is your duty to find out about the statutory social security contributions applicable in the country in question.
When you hire an employee from abroad to work in Finland
An exception to this rule are those employees who are posted from abroad to Finland and who have a certificate granted for a posted employee from their country of origin. Any employee who is posted to Finland from an EU/EEA country or Switzerland or a social security agreement country and has received a relevant certificate from the country of origin will remain covered by the social security of the country in question while working in Finland. In this case, your employee cannot be insured for pension security in Finland. Also, you must resolve the insuring question for anyone working in several countries at the same time and who may, depending on the situation, be granted a certificate for a posted employee.
More information about insuring employees hired from abroad to work in Finland is available on the website of the Finnish Centre for Pensions
Social security contributions in international situations
Read more from the Finnish Centre for Pensions