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.

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.

A1 certificate

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.

Read more about insuring work done abroad

When you send an employee to work abroad, you should apply for a certificate demonstrating the employee’s right to Finnish social security, known as the A1 certificate, which can be applied for from the Finnish Centre for Pension using an online application form. The certificate is also needed for short business trips abroad.

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

The provision of social security for your employees while working abroad depends mostly on the country to which you are sending them to work. The EU regulations on social security and the social security agreements made between various countries are intended to ensure that a person is only covered by the legislation of one single state at a time.

The social security agreement countries and the EU countries have similar criteria for a posted employee.

When you hire a worker from abroad to work in Finland, you are responsible for arranging their pension and social security. This is also the case when you hire them from abroad to work in Finland. Generally, your worker is insured according to Finnish pension laws if they come directly to work for a Finnish employer and sign a contract with a Finnish employer.

An exception to this rule are workers sent from abroad to Finland, who have received a certificate of a posted worker from their home country. If your worker has been sent to Finland from an EU or EEA country, Switzerland or another agreement country and they have received a certificate from their home country, they remain under the social security of that country during their work in Finland. In this case, your worker cannot be insured for pension in Finland. The insurance of those working in several countries at the same time must also be resolved and they can receive a certificate of a posted worker depending on the situation.

Read more about insuring workers coming to Finland from abroad on the Finnish Centre for Pensions website >

Usually, an entrepreneur's work is insured in the country where they work. This is also the case for entrepreneurs who work remotely - they are covered by the social security of the country where they are working from. If an entrepreneur is working abroad temporarily, they can ask for an exception. They can do this by getting an A1 certificate from the Finnish Centre for Pensions. This certificate allows the entrepreneur to still be covered by Finnish social security and to arrange their pension insurance in Finland.

 

Use the online service of the Finnish Centre for Pensions to find out if you are obliged to pay statutory social insurance contributions in Finland for an employee who comes to work in Finland or is sent to work abroad.

Read more from the Finnish Centre for Pensions

For more information:

Elo's guidelines for receiving pension from abroad
Finnish Centre for Pensions - Insurance while working abroad
Kela - Guidelines for international situations
Telp.fi - (in Finnish only)