The pay subsidy may be granted to

  • companies
  • other communities, such as associations, foundations, congregations and registered religious communities
  • municipalities and joint municipal authorities
  • households

The employer must commit to paying a wage in accordance with an applicable collective agreement or, if no applicable collective agreement exists, a prevalent and reasonable wage for the job in question.

No pay subsidies are available for central government offices or agencies. This type of employers can, however, be granted an appropriation for job creation in order to hire an unemployed jobseeker.

A pay subsidy is income subject to a tax for all employers with the exception of private households.

A pay subsidy may not be granted to an employer in the following circumstances:

  • If the salary of the person hired with the subsidy is solely based on the outcome of their work: for example, the wage consists of a selling commission that includes no basic salary
  • If the work supported by a pay subsidy results in, or could result in, the employer terminating and laying off other employees or changing their contracts to part-time employment.
  • If the subsidy distorts competition compared to others offering the same products or services.
  • If the employer has substantially neglected the duty to pay salaries, tax payments or statutory charges.
  • If the employment relationship for which the subsidy is intended started before the decision on granting the subsidy was made. With the exception of granting a new subsidy period when the new period begins immediately after the previous period ends. The observation period is twelve months from the end of the notice period.
  • An ongoing employment relationship is not an obstacle when an employee hired with subsidy is transferred to the employment of another employer in connection with transfer of business or a similar situation.
  • If the employer conducting business practices is a company in trouble referred to by the General Block Exemption Regulations of EU State Aid or if the European Commission has issued a negative Recovery Order against the employer, which declares the subsidy as illegal or unsuitable for the internal market.
  • Pay subsidy may not impair the position of the employer’s other employees. 
  • It is possible to receive a pay subsidy in spite of termination or temporary layoffs if, the employer has, before submitting a pay subsidy application, offered work to employees who have been terminated or temporarily laid off for financial or production-related reasons.

The employer must commit to paying a wage in accordance with an applicable collective agreement or, if no applicable collective agreement exists, a prevalent and reasonable wage for the job in question.

A pay subsidy may be granted:

  • For open-ended or fixed-term employment and for apprenticeship training.
  • It is also available for part-time employment if the granter of the subsidy feels that it is appropriate and that it promotes the possibilities of the jobseeker to find employment. This may be justifiable, for example, in case of a person with partial working ability finding employment. Pay subsidy will no longer be granted for hiring job alternation leave substitutes.
  • Pay subsidy may also be granted for prospective subsidised employees whose disability or illness decreases their productivity in the offered assignment significantly and permanently, or in a continuous manner.

When reporting a vacancy to the TE Office, include information whether you are also willing to hire a person needing more support at the beginning of their employment relationship than what the average employee would receive. 

Upon agreement, the TE Office may also offer work for persons whose recruitment may make the employer eligible for a pay subsidy.

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