Working abroad: basic information

An employer sending an employee from Finland to work abroad must determine whether the employee is covered by Finnish social security before the work begins. If the employee is covered by Finnish social security, social insurance contributions are also paid to Finland based on the employee's income. The employer or other payer must report the necessary data to the Incomes Register on an earnings payment report and an employer's separate report.

The employer must also assess whether the so-called six-month rule applies to the wages of the employee working abroad. If the rule applies, the wages are tax-exempt in Finland and no tax is withheld in Finland.

When an employee is posted abroad, wages for insurance purposes are determined for him or her. The employer's and the employee's social insurance contributions are determined based on the wages for insurance purposes. Wages for insurance purposes are calculated wages that would have to be paid, if work corresponding to work performed abroad were to be performed in Finland.

It is not necessary to determine wages for insurance purposes in all situations, such as during short assignments abroad. In such situations, the social insurance contributions are paid based on the actual wages.  

In some situations related to working abroad, the income on which some social insurance contributions are based is different than the income on which taxation is based. In these situations, both the wages for insurance purposes and the actual wages paid must be reported to the Incomes Register so that each authority gets the data it needs.

Resident taxpayer working abroad

If an employer in Finland pays the employee's wages and determines that the six-month rule applies to the wages, and the employee is insured in Finland, the employer reports to the Incomes Register on an earnings payment report the amount of the wages for insurance purposes and the so-called minimal withholding based on the wages for insurance purposes. The minimum withholding, or the employee's health insurance contribution, is reported to the Incomes Register as withholding. The earnings-related pension insurance contribution and unemployment insurance contribution collected from the employee are also reported.

If no wages for insurance purposes have been determined, the actual wages paid to the employee are reported to the Incomes Register.

• If the employer determines that the six-month rule applies and does not withhold tax in Finland, it must submit additional data on the work abroad (international work) to the Incomes Register, i.e., the NT2 data on tax not being withheld and the employer's report on periods of stay in Finland.
• If the employee works in another Nordic country, either NT1 data (tax is withheld in Finland) or NT2 data (tax is not withheld in Finland) must always be reported to the Incomes Register. If the six-month rule applies, the employer must submit an employer's report on periods of stay in Finland in addition to the NT2 data.     

If a Finnish company sends an employee insured in Finland to work abroad, and the wages are paid by a foreign group company, for example, the Finnish company must still pay the employer's health insurance contribution and other social insurance contributions to Finland on behalf of the foreign company. The withholding (so-called minimal withholding) of the employee's health insurance contribution does not accrue, because the wages are paid by a foreign company.

The Finnish company must also report to the Incomes Register the wages for insurance purposes or actual wages paid if the six-month rule is not applied to the wages, and on the earnings-related pension insurance and unemployment insurance contributions collected from the employee.

See more detailed instructions and examples of data to be submitted to the Incomes Register in different international situations:

• Work abroad and data to be submitted to the Incomes Register when the payer is Finnish 
• guide Reporting data to the Incomes Register: international situations.

Non-resident taxpayer working abroad

The wages paid to a non-resident taxpayer and other payments are reported to the Incomes Register in the same way as payments made to a resident taxpayer. An entry must be included on the earnings payment report, indicating that the income earner is a non-resident taxpayer.

Private-sector wages paid to a non-resident taxpayer for work abroad are not taxed in Finland. If the wages are paid by a public sector payer, they can usually be taxed in Finland. When the wages are taxable in Finland, tax at source or withholding tax can be collected from the wages. Tax can be withheld only if the employee has a non-resident taxpayer's tax card.

If a non-resident taxpayer working abroad is insured in Finland, the employer's and employee's health insurance contributions and other social insurance contributions must be paid to Finland from the wages. The employer must report the data to the Incomes Register. It does not matter whether or not the wages are taxed in Finland.

If wages for insurance purposes have been determined for the employee, data on both the wages for insurance purposes and the actual wages paid must be reported to the Incomes Register. If the wages are subject to tax at source, the employee's health insurance contribution is collected and reported to the Incomes Register in addition to the tax at source. If the wages are subject to withholding, the employee's health insurance contribution is included in the withheld amount. The employee's earnings-related pension insurance and unemployment insurance contributions are also reported to the Incomes Register.

If a non-resident taxpayer working abroad is not insured in Finland, the social insurance contributions will not be paid in Finland. However, an employer in Finland must report the actual wages paid to the Incomes Register, whether or not it is taxable.