Asiakasnäkymä
Pay subsidy (for employer clients)
Service implementation:
Life situation and service category:
Service language:
Charges:
Service accessibility
Who is the service for?
Target groups among private clients:
A pay subsidy for improving professional skills may be granted to a person who:
- is 15–24 years old
- is over the age of 50
- has not completed the matriculation examination, a qualification as defined in the Act on Vocational Education and Training, or a comparable foreign upper secondary qualification
- is an immigrant for whom an integration plan or multi-sectoral integration plan as defined in the Act on the Promotion of Immigrant Integration has been or can be drawn up
- has not been gainfully employed in the previous six months.
Pay subsidy may also be granted:
- for hiring a person with reduced work ability
- for hiring a long-term unemployed person aged 60 or older
- for apprenticeship training for the entire duration of the training.
Pay subsidy requirements related to the employer:
Pay subsidy may be granted to wellbeing services counties, joint municipal authorities for wellbeing, the City of Helsinki for its differentiated social and healthcare activities and rescue services activities, as well as other corporations and employers, but not central government agencies or institutions. Municipalities and joint municipal authorities may only be granted a pay subsidy for hiring a person with reduced work ability or a long-term unemployed person aged 60 or older, with the exception of the City of Helsinki with regard to its differentiated social and healthcare activities and rescue services activities. No pay subsidy is granted to the City of Kerava or the municipality of Sipoo. Pay subsidy may be granted to natural persons only for the purpose of economic activity. The employer must have a business ID.
Participant’s municipality of residence:
Age:
How can I participate in the service?
You can apply for pay subsidy online.
Apply for pay subsidy in good time before starting pay-subsidised work. You must not start the pay-subsidised work until the decision on the subsidy is made.
Go to tyomarkkinatori.fi/en. Select ‘E-services – Employer and entrepreneur’ at the bottom of the page and log in to the service. The identification process is based on Suomi.fi identification and Suomi.fi authorisations. The login uses strong personal identification (banking credentials, mobile certificate or ID card). Applications are forwarded to the General Grant System (YA), where they are processed and a decision is issued.
The purpose of pay-subsidised work is to promote the employment of an unemployed jobseeker on the open labour market by improving their professional skills.
Pay-subsidised work also promotes the chances of finding employment and entering the workforce for those with reduced work ability and the long-term unemployed aged 60 or older.
When granting pay subsidy, the employment authority may set conditions for the subsidy that are necessary for the jobseeker and the realisation of the purpose of the subsidy.
Pay subsidy is not granted if:
- the employer has discharged employees for production-related or economic reasons during the 12 months preceding the employer’s application for pay subsidy and, since then, the employer has not hired employees to the degree that the number of employees employed by the employer at the time of pay subsidy being granted is at least as high as the number of employees employed by the employer at the time of discharge
- the subsidy would distort competition between operators that offer the same products or services
- the employer has materially neglected their obligation to pay wages, salaries, taxes or statutory fees, unless the employment authority considers granting pay subsidy to be appropriate for specific reasons related to the person being hired with the pay subsidy
- the employer has previously been granted pay subsidy or employment subsidy for ages 55 and above to cover the salary costs arising from employing the same person and it has been less than three years since the discontinuation of the subsidy.
Pay subsidy requirements related to the employment relationship
Pay subsidy is not granted if the employment relationship for which the subsidy is intended starts before the decision is made to grant the subsidy.
Pay subsidy may be granted if the employer commits to paying at least a salary or wages in accordance with the applicable collective agreement or, if no such collective agreement exists, a normal and reasonable salary or wages for the job in question. However, pay subsidy cannot be granted if the salary or wages of the person being hired with pay subsidy would be determined solely based on work performance.
Palkkatukityön arvioidaan parantavan henkilön ammatillista osaamista ja hänen mahdollisuuksiaan työllistyä avoimille Pay-subsidised work is deemed to improve the professional skills and chances of the person in question to find employment on the open labour market. The employer receives the subsidy for salary costs when hiring an unemployed person.
How is the service organised?
Once the employer has made the decision to recruit and found a suitable candidate, the employer can submit an application for pay subsidy electronically on the tyomarkkinatori.fi/en website by logging in to ‘E-services – Employer and entrepreneur’. The employment authority processes applications and grants the subsidy. Applications are processed in the order in which they arrive. Once the pay subsidy application has been processed and the subsidy has been granted, the employer receives a notification about this and the employment relationship may be commenced.
The employer pays a salary or wages as usual and then applies to the employment authority afterwards for payment of the pay subsidy.
Salary costs covered with pay subsidy
Salary costs covered with pay subsidy refer to the salary or wages subject to withholding tax that are payable to the employee based on their working time or the completion of a contract.
However, salary costs do not cover:
- holiday bonus or holiday compensation or comparable compensation; if holiday pay is paid in the form of holiday bonus in accordance with the collective agreement applicable to the employment relationship, a portion of the holiday bonus equivalent to an annual holiday taken during the pay-subsidised work period may, at the employer’s request, be included in salary costs
- compensation payable for additional work or overtime or monetary compensation for time saved in a working time account
- salary for the period for which the employer has the right to receive daily allowance under the Health Insurance Act, rehabilitation allowance under the Act on the Social Insurance Institution of Finland’s Rehabilitation Benefits and Rehabilitation Allowance Benefits, compensation under the Workers’ Compensation Act, or communicable disease allowance as specified in the Communicable Diseases Act in accordance with the Health Insurance Act for the salary costs of the person hired with the subsidy
- the portion of the salary that is determined in accordance with the work performance of the person hired with the subsidy or in accordance with the employer’s performance
- compensation for costs or employee benefits.
Amount and duration of the pay subsidy
The amount of pay subsidy granted based on professional skills is 50% of the salary costs arising from the person hired with the subsidy, and the duration is five months if the unemployment has lasted less than 12 months. The maximum duration of pay subsidy is 10 months if the person hired with the subsidy was unemployed for at least 12 months during the 14 months immediately preceding the granting of the pay subsidy. However, pay subsidy may be granted for no longer than the duration of the employment relationship.
Pay subsidy for hiring a person with reduced work ability
Person with reduced work ability refers to a person who has a long-term disability or illness that substantially hinders them from finding employment on the open labour market. The person in question must have a medical certificate issued by a doctor regarding this disability or illness.
The amount of pay subsidy granted for hiring a person with reduced work ability is 70% of the salary costs arising from the person hired with the subsidy, and the duration is 10 months, but no longer than the duration of the employment relationship.
The pay subsidy period may be extended by up to 24 months at a time.
The conditions for extending the pay subsidy are that:
- a medical certificate issued during the pay subsidy period regarding the work ability and functional capacity of the person hired with the subsidy is delivered to the employment authority, unless it is clearly unnecessary
- the employer has implemented the reasonable adjustments recommended by occupational health services
- the employment authority deems that the productivity of the person hired with the subsidy in their work role has declined materially and permanently due to their disability or illness despite the adjustments made
- the application to extend the pay subsidy is submitted to the employment authority before the end of the granted pay subsidy period.
100% pay subsidy
May be granted to associations, foundations or registered religious communities for purposes other than economic activity. The amount of pay subsidy granted is 100% of the salary costs arising from the person hired with the subsidy, multiplied by a factor of 1.23, if the person in question was unemployed for at least 24 months during the 28 months immediately preceding the granting of the pay subsidy. The salary costs cover salary costs that are equivalent to no more than 65% of the regular maximum working hours for the industry in question. Pay subsidy is granted for up to 10 months from the start of the employment contract but for no longer than the duration of the employment relationship.
Pay subsidy for hiring a long-term unemployed person aged 60 or older
Pay subsidy may be granted for up to 24 months from the start of the employment relationship but for no longer than the duration of the employment relationship if the jobseeker:
- is aged 60 or older at the time of the pay subsidy being granted; and
- was unemployed for at least 12 months during the 14 months immediately preceding the granting of the pay subsidy. The pay subsidy period may be extended by up to 24 months at a time, provided that the conditions concerning the employer and the employment relationship are met and the application to extend the pay subsidy is submitted to the employment authority before the end of the previous pay subsidy period.
Pay subsidy for apprenticeship training
The duration of pay subsidy granted for apprenticeship training must be planned during the granting process so that it covers the entire period deemed appropriate by the employment authority. Notwithstanding the above, however, the pay subsidy period may be extended if the duration of apprenticeship training in accordance with a personal plan for the development of skills is changed during the training. The application to extend the pay subsidy must be submitted to the employment authority before the end of the granted pay subsidy period.
Impact of other financial support on pay subsidy
The pay subsidy may, in combination with other financial support granted for the salary costs of the person hired with the subsidy and training compensation paid based on an apprenticeship, amount to no more than the salary costs incurred by the employer for the person hired with the subsidy. However, 100% pay subsidy may, in combination with other financial support granted for the salary costs of the person hired with the subsidy and for the employer’s contributions, amount to no more than the salary costs multiplied by a factor of 1.23.
Maximum amount of pay subsidy and barriers to payment
50% pay subsidy: up to €1,260/month
- improvement of professional skills, apprenticeship training, and long-term unemployed persons aged 60 or older
70% pay subsidy: up to €1,770/month
- persons with reduced work ability
100% pay subsidy / up to 65% of full working hours, salary costs multiplied by a factor of 1.23: up to €2,020/month
- improvement of professional skills, and the person hired having been unemployed for 24 months out of 28 months
Pay subsidy is not paid if:
the recipient of the subsidy does not comply with the conditions set in the pay subsidy decision
the pay subsidy conditions concerning the employer or the employment relationship are not met at the time of the granting of the subsidy or when the subsidy is paid
pay subsidy has been granted in error, in excess or without justification.
Reassignment of the person hired with the subsidy
The recipient of pay subsidy may reassign the person hired with the subsidy to work under another employer (user company) in accordance with the Employment Contracts Act if the employment authority has given permission for the reassignment. The conditions for such a reassignment are that:
- the user company meets the pay subsidy conditions concerning the employer
- the employment authority deems the work responsibilities assigned at the user company to fulfil the intended purpose of the pay subsidy
- the user company pays fair compensation for the employee.
In the application, the employer must include, as an appendix, an assurance from the user company that the conditions are met. During the reassignment process, the maximum amount of pay subsidy is the amount that could be granted to the user company were it to apply for pay subsidy, but no more than the amount granted to the employer company.
Temporary interruption
If the performance of the pay-subsidised work and the payment of salaries and wages is interrupted for at least one month during the pay subsidy period, the employment authority will pause payment of the pay subsidy. Once the employment relationship resumes after the interruption, the employment authority makes the decision to extend the pay subsidy period by the duration of the interruption, but for no longer than was left of the pay subsidy period when the interruption started.
An extension is granted until 12 months have passed since the start of the period. This 12-month maximum period is not applied if the pay subsidy is granted for an apprenticeship, based on reduced work ability, in the form of 100% pay subsidy or for hiring a long-term unemployed person aged 60 or older.