Health insurance contributions in international employment situations

This is an unofficial translation. The official instruction is drafted in Finnish and Swedish.

These instructions concern insurance, the insured party’s health insurance contribution and the employer’s health insurance contribution in international employment situations. Furthermore, these instructions concern health insurance and health insurance contributions for employees arriving in Finland and employees departing from Finland to work abroad.

The health insurance contribution rates have been updated for 2024. In addition, some technical amendments have been made.

1 Introduction 

The Health Insurance Act (1224/2004) and the act on residence-based social security in cross-border situations (Laki asumisperusteisesta sosiaaliturvasta rajat ylittävissä tilanteissa 16/2019) lay down provisions on the insured party’s health insurance contribution and the employer’s health insurance contribution. The health insurance contribution collected from the insured party consists of two elements: a health care contribution of health insurance and a daily allowance contribution of health insurance. The act on employers’ health insurance contributions (Laki työnantajan sairausvakuutusmaksusta 771/2016) requires employers to pay the employer’s health insurance contribution.

In addition, both employees and employers must pay other charges related to social insurance. The rules of calculation for pension insurance and unemployment insurance may be different from those for health insurance.

2 Applicable provisions

The legal rules affecting the health insurance contributions and other social insurance contributions of employees and employers include the provisions of Finland’s legislation, Regulation (EC) No 883/2004 on the coordination of social security systems, including its Implementing Regulation No 987/2009, and international conventions. From the perspective of contributions, it is significant whether an individual’s country of work is located in the EU territory, in the EU/EEA territory, whether it is a signatory country of the international convention on social security, or another country.

When the country of work is in the EU/EEA, all contributions are paid to a single country only. When the country of work is a signatory country of the social security convention, the beneficiary country of each insurance (pension, accident, unemployment and health insurance) depends on what kinds of benefits are involved; as a result, pension insurance and health insurance contributions may be payable to different countries.  When the country of work is other than an EU/EEA country, the internal legal rules of both countries must be followed, and contributions may therefore have to be paid to different countries.

List of EU countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, The Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.

EEA states are Norway, Iceland and Liechtenstein. A specific treaty is in force with Switzerland on the applicability of the EU regulation on the coordination of social security systems.

If it is required that employees’ social security must be arranged as is customary in the foreign country, insurance and employer contributions must be paid to that country under local rules. There are differences between internal legislation, the EU regulation, international conventions, on the one hand, and tax laws and tax treaties on the other, which make for situations where tax is collected in Finland, but the income on which it is collected is not subject to the payment of the insured party’s health insurance contribution, for example. Similarly, it may also be that the health insurance contribution must be paid in Finland but at the same time, the taxing rights for the income are in the other contracting state.

The current rules governing health, pension, unemployment and accident insurance fall in the jurisdiction of the Finnish Centre for Pensions, the Unemployment Insurance Fund and the Social Insurance Institution (Kela). For more information on social insurance, see the guidance issued by these public organisations.

3 Social security regulations of the EU 

If a controversy exists between national legislation and the provisions of EU regulations, the latter will prevail. If an employee starts working abroad and is, under EU rules, covered by Finnish social security, it is required that all the social insurance contributions are paid in Finland for the period when the employee works abroad. Similarly, if the employee is covered by the social security system of the country of work, the contributions must go to that country (if contributions are collected there) and they must not be paid in Finland.

The EU Council Regulation 88/04 on social security came into force on 1 May 2010. It also covers the countries of the European Economic Area and Switzerland. It is possible for an individual to submit a request for having the new regulations and legislation apply to their case.

The social security regulation contains definitions of what EU countries are regarded as the ones where employees moving from one EU country to another are covered, with specific provisions on employees, civil servants, and the self-employed. The regulation also provides specific rules on the EU country whose laws are applicable to people who are outside working life but have moved from country to country.

Some EU Member States have signed a framework agreement on cross-border telework. It will enter into force on 1 July 2023. According to the Agreement, an employee working and teleworking in two different EU countries can be insured, under certain conditions, in the country where the statutory seat of their employer is established (instead of in their own country of residence). Read more about the EU agreement on remote work on the Finnish Centre for Pensions’ website EU agreement on remote work.

3.1 Country of work serving as the general rule 

The country of work has been given central importance in the EU regulation on social security. The reliance on the country of work is the reason why a Finnish resident who starts working in a foreign country for an employer that is not their original Finnish employer (who would have sent them there as a ‘posted employee’) is normally covered by the social security system of the country of work and does not have to pay Finnish health insurance contributions on the basis of the wages earned for the work.

However, if the employee has been posted from Finland to work abroad, they will continue to be covered by the social security system of Finland. ‘Posted employee’ means someone who is sent to a foreign country by their employer on a temporary basis, for a maximum of 24 months, to carry out work for the benefit of the same employer. The work is deemed as being done for the employer who sent the employee on the condition that it is carried out for this employer, and that a connection is maintained between the employee and the employer for the entire period when they work abroad. Similarly, the employee is considered ‘posted’ when they have become hired for the purpose of working in a foreign country. If an employee has been hired locally in the country of work, they cannot be regarded as ‘posted’.

The authorities of the sending country and the country of work may enter into various mutual agreements on exceptions from the rules governing insurance. It may be that a posted employee remains covered, for example, for five years by the social security system of the sending country. The posting employer and employee together should submit a request to obtain the posted employee’s certificate (A1 certificate).

3.2 Work in two or more countries 

People who work in two or more countries or who work for different employers are employees who change from one country to another. Examples of these employees include drivers, installation mechanics, and artists. In the same way as other employees who move from one country to the next, they are also covered by the social security system of only one country at a time. The country where individual employees are actually covered is determined by whether or not they carry out a considerable part of their activity in their country of tax residence.

People who work in two or more EU countries are covered by the social security system of their country of residence if a considerable part of their work is done there. This means that an important quantity (at least 25%) of all work is done there. When the authorities determine the proportions of the work done in various countries, they look into working hours and/or pay.

If a considerable part of an individual’s work is not done in the country of residence, either the legislation of their country or that of the employer’s country must be applied, depending on the nationality of the employer or employers. In practice, the A1 certificate is used for purposes of verifying the country that covers the social security system.

3.2.1 Seafarers 

Seafarers are applicable to the flag rule; i.e. they are subject to the social security system of the country under whose flag the ship they work on sails. If someone is a seafarer on board a ship registered in another EU/EEA country, they are usually covered by that country’s social security, even though they may be a permanent resident of Finland. All seafarers who begin working on board a ship sailing under the flag of another EU/EEA country must inform Kela of their circumstances. 

If the seafarer’s country of residence and the domicile country of the company paying them wages is one country (within the EU/EEA), but the ship where they work sails under the flag of another country, the principle based on the nationality of the ship’s registration is not applicable. In such circumstances, the seafarer is covered by the social security system of their country of residence. The seafarer is in this case is expected to ask the Finnish Centre for Pensions for the A1 certificate proving that Finnish social security is covering them during the period when they work on board the foreign ship.

If a seafarer is regularly working on board ships sailing under two different flags or if a seafarer, besides their seafaring work, also has an employment contract or self-employed operations in Finland or elsewhere, they must contact the Finnish Centre for Pensions.

3.2.2 Airline employees

The flight crew and cabin crew members have a ‘home base’, defined under the provisions of EEC Regulation 3922/91, as the location appointed by the operator for the crew member from where they normally begin and end a duty period or series of duty periods, and where, under normal conditions, the operator is not responsible for the accommodation of the crew member concerned. It is necessary to obtain an A1 certificate for a crew member in circumstances where the home base is located in a country that is not the country where they live.

Under the rules in force at present, the EU/EEA country that covers the social security of crew members of aircraft is the one where their ‘home base’ is located.

3.2.3 Public servants

Persons employed by the Finnish Government or public organisations who are posted to another EU/EEA country continue to be covered by the Finnish social security system, regardless of the length of their employment in the country (A1 certificate).

3.2.4 Brexit

The withdrawal of the UK from the EU has an impact on taking out insurance for work done in a foreign country, including the validity of A1 certificates. The UK’s withdrawal from the EU entered into force on 1 February 2020. As a result of the withdrawal agreement, a transition period started until the end of 2020, during which the application of the provisions of the EU’s social security regulation continued.

3.2.4.1 Work started during the transition period 

An A1 certificate could still be granted to an employee sent to work in the UK during the transition period from 1 February 2020 and 31 December 2020 based on an application, as well as to an employee sent from the UK to work in Finland.

A1 certificates granted before 1 January 2021 remain in force normally until the end of their validity period. If a certificate has been applied and granted for a period continuing after 1 January 2021, it will remain in force until the end of the validity period indicated in the A1 certificate. A certificate can also be applied for retroactively. For an A1 certificate to remain in force after 1 January 2021, the withdrawal agreement must apply to the individual’s situation and the individual must be in a cross-border situation.

3.2.4.2 Work started on or after 1 January 2021 

The EU and the UK have signed a trade and cooperation agreement, which is applicable from 1 January 2021. Based on the agreement, an employee sent from Finland to the UK and an employee sent from the UK to Finland can, under certain conditions, still continue to be covered by the sending country’s social security system for 24 months (provided that an A1 certificate for a posted employee is applied for). Read more about the posted employee’s certificate on the Finnish Centre for Pensions’ website (Brexit and working abroad).

If an employee arriving in Finland from the UK has a valid A1 certificate granted in the UK, no health insurance contributions will be imposed on them in Finland.

4 Social security conventions 

If it is required that employees’ social security must be arranged as is customary in the foreign country, insurance and employer contributions must be paid to that country under local rules.

There are differences between internal legislation, the EU regulation, international conventions, on the one hand, and tax laws and tax treaties on the other, which make for situations where tax is collected in Finland, but the income on which it is collected is not subject to the payment of the health insurance contribution of the insured, for example. Similarly, it may also be that the health insurance contribution must be paid in Finland but at the same time, the taxing rights for the income are in the other contracting state.

Finland has concluded bilateral conventions with the following non-EU, non-EEA countries: Australia, Canada (plus a separate convention with Quebec), Chile, China, India, Israel, South Korea, and the United States. However, not all conventions contain agreements on sickness insurance. For this reason, pension insurance contributions and health insurance contributions may have to be paid to two distinct countries. The insured party’s health insurance and the employer’s health insurance contributions are only included in the conventions made with Israel, Quebec and the United States. When it comes to other contracting countries, the treatment of these contributions is the same as with countries that have no convention with Finland.

Similarly as in the EU, the international conventions on social security also follow the principle that an employee should be covered by the social security system of the country of work. Posted employees may be covered by their sending countries for a certain period. However, the length of such coverage varies among the conventions signed with the countries involved. The conventions also contain specific provisions on civil servants and crew members who travel in their work. For more information on health insurance premiums, contact Kela; for more information on pension insurance, contact the Finnish Centre for Pensions. 

A social security treaty between Finland and Japan  has entered into force on 1 February 2022. Read more on the Finnish Centre for Pensions’ website. The treaty applies to earnings-related pension and unemployment insurance contributions, but not to health insurance contributions. Even if an employee arriving in Finland from Japan has a posted employee’s certificate granted in Japan, health insurance contributions will be imposed on them in Finland in accordance with the Finnish law.

5 An employee arriving in Finland from another country 

5.1 Taking out insurance for the employee, and the employer’s health insurance contribution

Taking out health insurance in Finland for an employee arriving in Finland from another country is based on work or residency in the country.

An employee arriving from another country has health insurance in Finland immediately after entering Finland, if they are paid monthly wages for working in Finland equalling at least the amount of the basic unemployment allowance laid down in the unemployment security act (Työttömyysturvalaki 1290/2002) converted into monthly earnings (EUR 800.02 in 2024). The payments received during the same calendar month are included in the monthly earnings, and the income limit is recipient-specific. If the working conditions are not met, the individual may be covered by health insurance in Finland if they have moved here permanently.

The work done by an employee arriving from another country may temporarily decrease, be suspended or end. If the employee has worked here for at least six months so that the aforementioned condition regarding the amount of wages is met, the employee can afterwards be covered by health insurance in Finland for three months, based on subsequent coverage, even if their wages do not exceed the defined minimum limit during these three months. Because the employee is covered by health insurance in Finland during the validity of the subsequent coverage, health insurance contributions must also be paid for these months.

If the employee requires a residence permit as defined in the Aliens Act (301/2004), the subsequent coverage period may be longer than three months because the subsequent coverage is valid at most until the end of the residence permit’s validity.

The health care contribution of health insurance collected from insured parties in 2024 is 0.51 per cent of earned income taxable in municipal taxation and another payment criterion defined in the Health Insurance Act (Government decree, section 1, subsection 1). The payment rates for 2023 and 2024 are defined in the instructions Social insurance contributions. The daily allowance contribution of health insurance collected from wage earners in 2024 is 1.01 per cent of wage income. However, no daily allowance contribution is collected from wage earners whose total wage and entrepreneurial income is less than EUR 16 499 (Health Insurance Act 18:15.3, and Government decree, section 2, subsection 1). If total wage and entrepreneurial income is EUR 16 499 or higher, the daily allowance contribution will also be collected from the part of income that falls below the limit.

The employer’s health insurance contributions are laid down in the act on employers’ health insurance contributions. If an employee is covered by insurance in Finland in accordance with the Health Insurance Act, the employer must pay the employer’s health insurance contribution to the Finnish Tax Administration. However, a foreign employer is obliged to pay the employer's health insurance contribution only if it has a fixed establishment in Finland for purposes of income taxation and the work within the scope of the insurance is done for the said establishment.

An employee may receive income from several employers, and a single employer may not always be aware of the other employers and the wages they have paid. An employer is not considered to have neglected to collect the employee’s daily allowance contribution if the employer cannot have known that the employee’s annual income is higher than EUR 16 499. Furthermore, an employer is not considered to have neglected to pay the employee’s health care contribution or the employer’s health insurance contribution if the income limit set for health insurance has been exceeded due to wages paid by other employers, and the employer has not been aware of these wages.

The insured party’s health insurance contribution (daily allowance and health care contributions) is included in the withholding rate, or the employer must collect the insured party’s health care contribution in addition to tax at source. When contributions are based on income subject to tax at source, the employer’s health insurance contribution and the insured party’s health insurance contribution are paid based on the amount from which no tax at source has been deducted.

In addition to the health insurance contributions, the earnings-related pension insurance contribution (applicable to individuals of 17–67 years), unemployment insurance contribution (applicable to individuals of 18–64 years) and accident insurance contribution must be paid. Similarly, the employee’s pension and unemployment insurance contributions must possibly be collected from the employee. The employer must pay the above contributions to appropriate insurance companies.

The assessment of insurance contributions may be limited by the EU’s social security regulation 883/2004 and Finland’s social security conventions. The above contributions are not paid if an individual arriving from the EU/EEA area, the UK or Switzerland presents an A1 certificate granted in their country of residence or a similar certificate granted in a signatory country to a social security convention.

A Finnish transport company, a shipping company or airline may also have payment obligations regarding their travelling employees when an individual residing abroad works abroad. When an employee is covered by social security in another country, insurance and contributions must be paid directly in the country in question in accordance with its systems.

The employer’s health insurance contribution is not paid for athletes’ fees.

5.2 Correcting the health insurance contribution 

In some cases, it may first seem that the monthly earnings of an individual sent to work in Finland do not exceed the required limit (EUR 800.02) for insurance in Finland based on employment, and the individual is not insured in Finland based on residency. The employee’s health insurance contribution is not then collected from the wages, nor is the employer’s health insurance contribution paid. However, the situation may change so that the requirement for monthly earnings is met, and the individual is insured based on their work in Finland for the entire working month.

If the employer has not collected the health insurance contribution from the employee from a payment from which it should have been collected, the employer can increase the amount of tax at source collected during the next payment(s) and, in this way, collect the uncollected health insurance contribution (act on the taxation of non-residents income (Laki rajoitetusti verovelvollisen tulon verottamisesta 627/1978), section 8, and act on tax prepayments (Ennakkoperintälaki 1118/1996), section 19). However, the amount of tax at source cannot be increased by more than 10% without the employee’s consent. For employees who are resident taxpayers, the health insurance contribution is included in the withholding rate.

If the situation changes so that an employee becomes covered by health insurance and the employer has not collected the health insurance contribution retroactively, the employee who is a non-resident taxpayer must submit information about their income to the Finnish Tax Administration for assessing tax at source. Income can be reported using form 6220. Only the income from which no health insurance contribution has been collected must be reported as income. However, in the case of an employer’s neglect, any uncollected tax at source/health insurance contribution will be payable by the employer.

For more information on correcting and reporting the employer’s health insurance contribution, see the instructions ‘Reporting data to the Incomes Register: international situations’ (Section 3.6.3).

6 Employees working in a foreign country

6.1 Being covered by the social security system of Finland 

In accordance with the Health Insurance Act, a person who works, is self-employed or lives in Finland in accordance with the act on residence-based social security in situations where limits are exceeded is insured in Finland. Foreigners’ obligations to pay contributions may be relieved under the EU’s social security regulation and social security conventions that Finland has signed with some countries. However, the provisions of tax treaties do not affect the payment of insurance premiums. Being a person ‘who lives/resides in Finland’ within the meaning of the social security law may be a different concept than the ‘residency’ the act on income tax and tax treaties refer to.

Insured parties who take up a temporary residence abroad are Finnish residents as long as the residence abroad lasts for a maximum of six months (the act on residence-based social security in situations where limits are exceeded, section 6). If a Finnish employer sends an individual who lives in Finland to work in a country that is not in the EU/EEA or a signatory country of a convention for longer than six months, the employee will remain a Finnish resident as long as Kela is notified of the matter. This is also the case when a person is sent to work for a parent company or subsidiary.

Similarly, some multilateral conventions on social security may provide that an employee who is posted to a foreign country continues to be covered by the Finnish health insurance system (and be treated as ‘living here’ for social security purposes), though a longer time may elapse.

Persons who are posted to a foreign mission also continue to be covered by Finnish insurance. The same applies to persons who have lived or worked in Finland before their employment began and who are employed abroad by the Finnish government, or is a private servant of such a person. If a Finnish public organisation pays wages to a foreign citizen who works in a foreign country, they may be treated as ‘a person living in Finland’, e.g. because they have an employment contract with such a Finnish public organisation.

The employee going to work abroad is obliged to pay the insured person’s health care contribution and daily allowance contribution, and the employer is obliged to pay the employer's health insurance contribution, if the employees is insured in Finland. If the person works in an EU/EEA country, they are usually insured in the country of work. The principle is not followed, however, if the person is a posted employee. In these situations, the employee may present an A1 certificate issued by Finland to show that they are covered by Finnish social insurance. In such a case, the health insurance contributions are paid to Finland. The A1 certificate covers the EU and EEA countries, Great Britain and Switzerland. In tax assessment, the insured person’s health care contribution and daily allowance contribution are usually imposed on a resident taxpayer who has wage income taxable in Finland.

The insured party’s health insurance contribution is also collected from non-resident employees if deemed to be covered by the social security system of Finland under the Health Insurance Act.

6.2 The insured party’s health insurance contribution

The health insurance contribution collected from the insured party consists of two elements: a health care contribution and a daily allowance contribution. The health care contribution is determined on the basis of income taxed in municipal taxation. The daily allowance contribution is determined on the basis of taxable earned income. If the six-month rule applies to the wages of a resident taxpayer, their wages for insurance purposes will serve as the basis for the health care and daily allowance contributions.

We recommend that employers agree with their employees, prior to the start date of the work in a foreign country, on what the amount of wages for insurance purposes should be in accordance with the Employees Pensions Act (395/2006). This means wages that an employer in Finland would pay for similar work. In addition, wages for insurance purposes serve as the basis for the employee’s pension insurance and unemployment insurance contributions. For more information on the concept of ‘wages for insurance purposes’, contact the Finnish Centre for Pensions or a pension insurance company.

If the requirements for the six-month rule are fulfilled, the employer will pay a minimum withholding tax to the Tax Administration based on the wages for insurance purposes, reflecting the employee’s health insurance contribution and the employer’s health insurance contribution. If wages for insurance purposes are less than EUR 16 499 per year, withholding tax will be paid equalling the amount of the health care contribution only (the Tax Adminisration's decision on withholding methods and amounts). However, the amount of the tax year’s final daily allowance contribution is also affected by the tax year’s other wage income, meaning that the daily allowance contribution may be payable, even if it was not collected in conjunction with the withholding tax.

If no wages for insurance purposes have been agreed, the basis for health care, daily allowance, and employer’s health insurance contributions will be the employee’s wages subject to tax withholding within the meaning of section 77 of the act on income tax and section 13 of the act on tax prepayments.

If the employee is a non-resident taxpayer, the applicable Finnish legal provision is the act on the taxation of non-residents’ income and its provisions on tax at source. In this case, the basis for health care and daily allowance contributions will be the employee’s wages within the meaning of section 4 of the act on the taxation of non-residents' income. If the employee has been posted from Finland to work abroad and has become a non-resident taxpayer, while still being covered by Finnish social security, the basis for the contributions will by way of exception be their wages for insurance purposes.

If the employee is insured in accordance with YEL or MYEL pension scheme (e.g. the employee is a shareholder entrepreneur), the basis for health care and daily allowance contributions will be the agreed annual work income for the YEL/MYEL policies, also when they work in foreign countries. Employees carrying this type of insurance do not therefore have wages for insurance purposes. The payor is not obliged to withhold the minimum amount if the sent employee has confirmed work income under YEL. However, the payor may volunteer to withhold the minimum amount on the basis of work income under YEL.

6.3 The employer’s health insurance contribution 

Under section 4 of the act on employers’ health insurance contributions (Laki työnantajan sairausvakuutusmaksusta 771/2016), employers must pay health insurance contributions if the employee concerned is covered by the Finnish social security system under the Health Insurance Act.

If the six-month rule applies to the wages earned by the employee, the basis for the employer’s health insurance contribution is wages for insurance purposes. If the six-month rule is not applicable, the basis for the employer’s health insurance contribution is wages within the meaning of section 13 of the act on tax prepayments, although other contributions, including the pension insurance contribution, are based on wages for insurance purposes. Wages within the meaning of section 13 of the act on tax prepayments also serve as the basis for the employer’s health insurance contribution if no wages for insurance purposes have been agreed.

Even if a tax treaty prevents Finland from imposing tax on wages, Finland can still impose the health insurance contribution.

If the employee is a non-resident taxpayer, the basis for contributions will be the employee’s wages in accordance with the act on the taxation of non-residents’ income. If the employee has been posted from Finland to work abroad and has become a non-resident taxpayer, while still being covered by Finnish social security, the basis for the contributions will by way of exception be their wages for insurance purposes.

If the employee is insured in accordance with YEL or MYEL pension scheme (e.g. the employee is a shareholder entrepreneur), the employer’s health insurance contribution will be based on the wages subject to withholding in accordance with the act on tax prepayments. This is due to the fact that employees carrying this type of insurance do not have wages for insurance purposes.