Pay subsidy is granted for employing unemployed persons
Pay subsidy is a discretionary subsidy aimed at promoting the employment of unemployed job-seekers. An employer hiring an unemployed job-seeker may receive financial assistance in the form of pay subsidy that covers 30, 40 or 50% of the payroll costs.
The purpose of the subsidy is to compensate for the employee’s lower productivity. The pay subsidy is also a compensation for the fact that the employer uses more time for guiding the employee.
Which employers are eligible for pay subsidy?
All employers, except for central government agencies, are eligible for pay subsidy. Pay subsidy may not distort competition or lead to dismissals or lay-offs of other employees or prompt the employer to convert employment relationships into part-time contracts. The employment relationship may only start after the decision on granting the subsidy has been made. A pay subsidy can only be granted to an employer that undertakes to pay the wages and salaries
- laid down in collective agreements,
- has managed its statutory obligations,
- and observes the re-employment obligation laid down in the Employment Contracts Act.
How can an employer apply for pay subsidy?
Pay subsidy applications should be submitted to Employment and Economic Development Offices (TE Offices) using the pay subsidy online service or the form that can be printed out online (the application form is in Finnish). Submitting the application online helps to speed up the application process. Applications are normally processed within two weeks.
Further information: Kirsi Hyttinen, kirsi.hyttinen(at)tem.fi