Employment Fund is an important part of the Finnish social security system. With our services we secure livelihood in different kinds of situations where employment has ended. We collect unemployment insurance contributions which are used e.g. to fund unemployment security from periods of unemployment and temporary lay-off as well as pensions accruing during the earnings-related daily allowance period. We also finance pay security and transition security intended for dismissed employees aged 55 and over. Our clients are all employers and employees aged 18-64 in Finland.
At the end of 2025, 124 people worked for Employment Fund. We provide guidance and advice to our clients in matters related to unemployment insurance contributions and our other services, and we participate in the development of legislation in our sector.
Employment Fund is an organisation managed by labour market parties. Employment Fund started operating on 1 January 2019 when the Unemployment Insurance Fund and the Education Fund merged. Our operations are supervised by the Financial Supervisory Authority. We belong to the administrative branch of the Ministry of Social Affairs and Health.
Employment Fund collects unemployment insurance contributions from both employers and employees. The employer pays Employment Fund its and the employee's share of the unemployment insurance contribution four times a year. The level of unemployment insurance contributions is determined annually by law.
In recent years, the focus of our customer services has shifted to e-services. We were among the first to introduce use of the Incomes Register in 2019, as a result of which the invoicing automation rate for unemployment insurance contributions has increased to 99%. Our services use the Incomes Register and other public administration data interfaces to provide us with up-to-date information about our clients, without any additional effort on the part of the customer. Our goal is to continuously develop the usability of our e-service and to optimise our customer experience. The total customer satisfaction score (CSAT) indicating the percentage of satisfied and highly satisfied customers of all customers stood at 89% for 2025.
Employment Fund uses unemployment insurance contributions to finance most of the earnings-related unemployment security paid by unemployment funds, with the exception of the share that the funds collect with membership fees (approximately 5%). We also manage the payment of the basic component of the earnings-related unemployment allowance to the funds. The financing of the basic component is the responsibility of the state and municipalities. For the earnings‑related unemployment security paid during a layoff, we also finance the basic component.
We pay the share of basic unemployment insurance contributions corresponding to the share of employees who are not members of unemployment funds to Kela annually. Approximately 85% of employees belong to unemployment funds.
We use unemployment insurance contributions to finance earnings-related pensions accumulated during the daily allowance period and the adult education allowance period. We pay the shares to the Finnish Centre for Pensions and the State Pension Fund.
Employees may receive pay security paid by the Ministry of Economic Affairs and Employment if they have pay claims due to the employer's insolvency. Funding for this benefit, too, comes entirely from unemployment insurance contributions and we pay it to the Ministry of Economic Affairs and Employment annually.
An employer may be obliged to pay the liability component if they have dismissed or laid off an elderly employee and the employee has been unemployed or laid off for a long period. Liability component payments are used to finance unemployment benefit expenses incurred by terminations and layoffs.
| The additional days of unemployment security will be abolished. The right to continued unemployment allowance is replaced by the right to receive the transition security package and the employer's obligation to pay the transition security contribution. |
The employer may be obliged to pay a transition security contribution if the employer has dismissed an employee aged 55 or over for production-related or financial reasons and the employee had been employed by the employer in question for at least five years. The transition security contributions are used to finance the employee’s transition security package.
Transition security contributions have been collected since 2023. The transition security contribution may be payable if the employee is terminated on or after 1 January 2023.
An employer who has terminated an employee’s employment relationship in violation of the provisions of the Employment Contracts Act is liable to pay compensation to the employee. A deduction from the compensation must be paid to Employment Fund if the unemployment fund has paid the employee earnings-related daily unemployment allowance after the termination of employment. The deduction is also made from compensation paid for groundless lay-offs.
We work as experts in the reconciliation of the compensation paid in disputes concerning termination of employment and the unemployment allowances received by the employee.
Employment Fund has a business cycle buffer to ensure liquidity and to balance out changes in unemployment insurance contributions caused by predictable economic fluctuations. The buffer is formed as the difference between the Fund’s assets and liabilities.
The main purpose of the business cycle buffer is to secure the Fund’s liquidity and enable a stable development of unemployment insurance contributions. This buffer, also referred to as the EMU buffer, has been used several times over the past 20 years to cover unexpectedly increased unemployment security expenses and to mitigate pressure to raise unemployment insurance contributions.
Employment Fund’s business cycle buffer and its other assets shall be invested in a profitable and secure manner, taking into account the Fund's liquidity. A particular challenge related to investing the business cycle buffer, is that the investment assets acquired during an upturn must be liquidated during a downturn. A high return requirement cannot be imposed on the Fund's investment assets at the expense of risk.
Employment Fund has the right to borrow to meet its obligations under the Act on the Financing of Unemployment Benefits. Employment Fund's bond is listed on the Nasdaq Helsinki Oy stock exchange ("Nasdaq Helsinki"), which is why the Fund is obliged to report on its stock exchange activities.
For more information on the finances of Employment Fund, visit the Investors web page >>
All employers and employees aged 18–64 in Finland pay unemployment insurance contributions. But why?
By watching the video on the right, you will learn more about how Employment Fund finances unemployment security with unemployment insurance contributions and ensures the sufficiency of funds with its business cycle buffer.
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