Agreement with India means savings for companies

Starting this August, it will no longer be necessary for Finnish companies to pay the 24 per cent pension contribution for every Finnish employee posted to India. The social security agreement between Finland and India eliminates the need for double pension insurance. 

The social security agreement is useful for Finnish employees being posted to India and their employers.

“Up until now, they have had to pay earnings-related pension contributions to Finland as well as India. The new agreement removes the need for double insurance. From the beginning of August, a company operating in Finland may apply to the Finnish Centre for Pensions for a certificate of posted employee when posting an employee to India, and then the pension contributions will be paid only to Finland”, explains lawyer Matias Kainu from the Finnish Centre for Pensions.

The employee also benefits

In India, the employer’s share in the employee pension contribution is 12 per cent of the monthly wage. The employee also pays contribution at a rate of 12 per cent of the wage. Now this contribution of 24 per cent in total is removed.  This is a significant cost reduction, also since contributions paid into the Indian earnings-related pension schemes have not yielded any returns.

“India has not previously paid any earnings-related pension accumulated there to Finland. Now that will also change”, Kainu points out.

In Finland the employee’s earnings-related pension contribution is 5.55 per cent of the wage for those under 53 years of age, and 7.05 per cent for employees who are 53 and over. The average pension contribution of the employer is 17.75 per cent of the wage sum.

Over a hundred Finnish companies active in India

There are currently 120 Finnish companies operating in India. Among the biggest ones are Finnair, Fortum, Nokia, Outokumpu, UPM and Wärtsilä. Additionally, approximately 100 Finnish companies do business with Indian companies.

Including the EU and EEA and in addition to India, Finland has social security agreements with Australia, Chile, Israel, Canada (separately with Quebec), and the USA.

You may apply for the certificate of posted employee online or by printing the application form.

Additional information:

Lawyer Matias Kainu, Tel 029 411 2180, matias.kainu(at)