1. Social security contributions in 2009, payable to the Finnish Tax Administration

The new rates for 2009 are applicable from 1 April 2009, subjecting all wages paid from that date on. The rate is determined by the actual payroll month (month of payment), and the time period during which the wages were earned, but not yet paid, is not significant. As the social security contribution rates are lowered from 1 April, all payments of wages performed prior to that date are subject to different rates.

Valid rates for payments made from 1 April to 31 December 2009: 

Class 1: 2.0%

• This is the most common category
• This class is applicable to:
  • new companies or
  • companies with less than €50,500 of depreciation for tangible fixed assets in the annual financial statement for 2007, or
  • companies with more than €50,500 of depreciation in 2007, however, said amount constituting less than 10% of the total wages.
• This class is also applicable to the households or nonprofit associations as employers.

Class 2: 4.2%

• Companies with more than €50,500 of depreciation, and said amount constituting 10% to 30% of the total wages.

Class 3: 5.1%

• Companies with more than €50,500 of depreciation, constituting more than 30% of the total wages.
• Companies are expected to work out the appropriate social security tax class on their own and not wait for the Tax Administration to initiate it.

Valid rates for payments made from 1. January to 31 March 2009:

Class 1   2.801%

Class 2   5.001%

Class 3   5.901%

2. Contributions, premiums and payments to be withheld and collected on wage payments in 2009

• Pension insurance contribution, 4.3% (5.4% for age 53 and up)
• Unemployment insurance contribution, 0.20%
• Total of the above 4.5% (5.6% for age 53 and up).

Apply the percentage rates to the employee's gross wages. Then withhold the above amounts in addition to the withholding of tax.

Employees aged 18 to 68 years should pay the pension insurance contribution. Workers aged 17 to 64 years should pay the unemployment insurance contribution.

3. Pension insurance contributions in 2009  

TyEL

• The median level of TyEL pension contribution is 22%
• Share of an employee under 53 years of age: 4.3%
• Share of an employee aged 53 or older: 5.4%.

MEL (legislation pertaining to sailors)

• The total contribution is 22.0%
• Employer´s share 11.0%
• Employee´s share 11.0%.

4. Unemployment insurance contributions in 2009

• Employer´s share:

The percentage is 0.65% for the wages and salaries paid by a company in the amount up to € 1,788 million and  2.7% for the part exceeding € 1,788 million.

• Employee´s share: 0.20%

If the employee is a major shareholder in the employer company at the same time, the percentage is 0.07%

The employer has to pay these amounts jointly with the payment of accident insurance and to withhold and collect the employees´ shares on the wage payments. The payments have to be performed on the pay day, subjecting the employees whose employers are under legal obligation to take out an accident insurance.

A person working for a limited liability company is deemed to be a major shareholder if at least half of the shares or votes are owned or co/owned by him/her and his/her family members. In addition, a manager of a limited company is considered to be a major shareholder if he/she owns at least 15% of the shares, or he/she and his/her family members are the owners or co-owners of at least 30% of the share capital or votes.

5. Group life insurance contribution

Employers are required to pay this contribution jointly with the payment of accident insurance. The insurance company invoices this contribution separately, using the same total base amount of wages for it as for the calculation of the unemployment insurance contribution.

6. Mandatory accident insurance contribution

The amount and rates of this contribution are dependent on the particular sector or industry, the statistical risk for accidents and on the total amount of wages. Different insurance companies offer different rates. As a result, some employers have to pay higher amounts than other employers. If an employer employs a person for more than 12 days per calendar year, this will give rise to the legal obligation to take out an accident insurance policy.