Finnish Social Security
Finland has one of the world’s most advanced and comprehensive welfare systems in the world. The Finnish social security system reflects the traditional Nordic belief, which means that the state can intervene benevolently on the citizens’ behalf. Core to the system are welfare (ex. family aid, child-care services, services for the disabled), social insurance (ex. pensions, workers’ compensation, sickness & unemployment benefits), and a comprehensive health system.
The Finnish social security is divided into residence-based social security and employment-based, earnings-related social security,
- Residence-based social security is financed by tax. It is administered by Kela, which is the Social Insurance Institution of Finland.
- Earnings-based social security is financed by contributions to private insurance companies and pension funds. These are administered by the Finnish Centre for Pensions.
Eligibility for most social security is based on permanent residence, therefore the benefits can be claimed only by those who live in Finland.
Kela is a Social Insurance Institution of Finland. Its website provides helpful details about all aspects of residence-based social security and it is fully available in Finnish, English & Swedish.
In general, with regard to Finnish social security there are several contributions covered by employer and employee. Permanent residents of Finland have to pay health insurance contributions, medical care fee (1.19%) and daily allowance contribution (0.82%). The health insurance contribution of the insured (ca 2 %) that the insured individual has to pay is based on the net taxable earned income assessed for the purposes of municipal tax).
Mandatory employment insurance contribution is paid by both, the employer and the worker (ca 5-6 % of gross income). Unemployment insurance contribution is paid by both as well – the employer and the worker (ca 1 % of gross income).
Accident insurance contribution is paid by the employer. Group life insurance contribution is paid by the employer. The employer’s social security contribution is paid by the employer.
No social security contributions will usually be charged of an individual arriving in Finland to start work in Finland if he or she carries the E101/A1 Certificate.