Household employers

Household services include repairs, taking care of children, and cleaning the rooms. Households may either pay a business enterprise or a worker on their own payroll to have this work done. Please note that the household must take care of all the usual obligations of an employer if an employment contract is made with someone.

When a household arranges for someone else to provide services, including home repair, day care work, cleaning etc., the household's obligations depend on whether the service provider

  • is a business enterprise or a self-employed trader with a tax-prepayment registration;
  • is a business enterprise or a self-employed trader with no valid registration;
  • is an individual worker who starts working for the household as its employee.

When the contract is made between the household and the service provider, it is important to ascertain whether the worker or workers will be working as employees. If so, it is an employment contract, and any compensation paid is taxed as wages. If they are a business enterprise or a self-employed trader, the household will simply pay for the services provided by the company or individual, and pay the amounts showing on their invoices.

When you buy the services from a provider that is a business, including the self-employed, it is important to find out whether they have a valid registration for prepayment (ennakkoperintärekisteröinti; registrering för förskottskatt).  If they do, you don't have to worry about other things except paying the invoice.

Read more on buying services from a business.

When you sign an employment contract with a worker directly, you must take care of all the usual obligations of an employer including insurance coverage to protect the worker.  If the worker shows a tax card to his employer, he works as an employee – not as a business.  Barring a few minor exceptions, the usual obligations of an employer are no different for a household than for any other employer. The term 'household' refers to private individuals or to estates of deceased persons.

Read more on employing someone to work for you.

Buying services for the household

When a household buys for example domestic cleaning from a business or an independent contractor, it is important to check whether they have a valid registration for tax prepayment. If the service provider has not registered for prepayment, the household is responsible for the employer obligations.

Employing someone to work for a household

The household can have its own employee working for the household. If the household signs an employment contract with a worker directly, the household must take care of all the usual obligations of an employer, including tax withholding and insurance coverage to protect the worker.



Glossary

Go to Glossary to look up important tax concepts and terminology.

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Last Update: 1/2/2017