International assignments and other types of working abroad
International assignment process
When the international assignment becomes relevant the employee should discuss both with his/her supervisor and the department Financial Services the purpose of the international assignment and the compensation and costs of it. The employee contacts his/her department’s HR coordinator or HR Manager in order to start preparations for the International Assignment contract.
The preparations for the international assignment process should be started as early as possible, as the process and acquiring the necessary official documents for the assignment may take several months.
Department HR prepares the International Assignment contract between the Employee and Aalto University. The contract defines the conditions for the International assignments.
International Assignment Policy (see the attachment) defines the principles for the Aalto University employee's work abroad. The purpose of the International Assignment policy is to support the assignment process and handling of the issues related to assignments in a correct, equal and timely manner.
International Assignment process is conducted by the department HR in Workday. Although department HR is responsible for the Workday process, the Employee is asked to deliver certain mandatory documents to HR and filling in certain data in Workday by themselves.
The official International Assignment contract is for now a paper document. The Contract needs to be signed and International Assignment insurance needs to be taken before International Assignment begins. Without assignment insurance employee cannot leave the country!
If Ministry of Foreign Affairs recommends avoiding non-essential travel or all travel to the destination county, Aalto-university requires making a risk assessment and obtaining permission from the dean / service director. More information from Travel Services.
- check-list for the international assignment
- Travel Service's instructions for expence plan in NEO
Things to consider
All work abroad (over 30 days) is considered as International Assignment in Aalto. Business trips under 1 month do not require International Assignment contract. Plese see instructions for Business trips under 30 days in Travel Services pages.
Assignment insurance must always be taken for periods over 30 days working abroad.
In principle remote work abroad is not allowed at Aalto University until further notice according to PMT's decision 28th Jan, 2021.
Basic guideline is that working at Aalto University as a new employee needs to be started in Finland.
Employee or supervisor cannot make an exception in this guideline. Any exceptions need to be agreed with HR manager, Dean and Provost.
More information on the work abroad, please contact your home department/unit HR coordinator.
Taxation, social security and work permits on International assignment
The employee's entitlement to the Finnish social security and taxation during the assignment should be solved early enough. The laws and regulations of both Finland and the target country, as well as situation of the employee leaving for an International assignment (e.g. other tasks, family, etc. ) can have an effect on both social security and taxation. The employee is responsible for applying the necessary work and other permits for the target country, and taking them to the unit HR.
Employee pays taxes according to the taxation practices of the target country, if the working period abroad is over 183 days in either successive 12 months or in a calendar year, depending on the country where the work is done.
This so-called 6 month rule applies only when:
- Work-related stay in a foreign country lasts a minimum of 6 months and
- Tax agreement between Finland and other country does not prevent taxing of wages in the country where the work is done and
- Employee does not reside in Finland more than 6 days/month in average
Aalto University´s Payroll makes the decision of the taxation. After receiving the International Assignment agreement and so called A1 certification (indicating that social security will be kept in Finland during the working abroad period) Aalto's Payroll (HR) contacts the employee to provide guidance with taxation issues. In case the 6-month rule applies, employee must contact the tax officials of the destination country about taxation practices.
If the employee’s taxation is transferred to the destination country, but the person remains entitled to the Finnish social security, the payroll office withholds from the salary only the health insurance contribution 2,04% (2021).
- keeps a record of his/her stay in Finland: the number of so-called Suomi days may cause changes in taxation.
- fills in the Finnish tax return form as usual
- provides to the Finnish Tax administration information on income earned abroad as well as paid taxes, even if that income was not taxed in Finland (see form Details on income from foreign sources)
Employer (Payroll office)
- responsible for mandatory employer reporting to the Finnish tax administration and reports to the tax administration the income paid during the assignment, even if the taxation was removed to the destination country.
NOTE! According to the Finnish tax authorities, due to tax agreements, the 6 month rule does not apply to university employees on an international assignment in Greece. The right to tax remains in Finland.
More information at www.vero.fi.
An Aalto University Employee must have a certificate of the entitlement to the Finnish social security (A1 certificate) on the International assignment. The certificate states that an employee is entitled to the Finnish social security during the assignment, and the Aalto payroll withholds the social security contributions to Finland.
- EU/EEA country, Switzerland, Great Britain and following countries with which Finland has a social security agreement (USA, Australia, Canada, Israel, Quebec, Chile)
- India, China (countries have social security agreement with Finland)
Home department of the Employee must apply for an A1 certificate from the Finnish Centre for the Pensions (Eläketurvakeskus) either online or by filling in the form ETK 2132 (Fi) / ETK 2146 (Eng) In addition Home department and employee must fill in the Kela forms Y38 or Y38T.
- South Korea (country has social security agreement with Finland)
Duration of the stay max 6 months: Home department of the Employee must apply for an A1 certificate from the Finnish Centre for the Pensions (Eläketurvakeskus) either online or by filling in the form ETK 2132 (Fi) / ETK 2146 (Eng)
Duration of the stay more than 6 months: Home department and employee must fill in the Kela forms Y38 or Y38T
If an Employee works in a country other than mentioned above:
Employee must inform Kela (Social Insurance Institution of Finland) if a stay abroad is less than a year by using Kela online service or filling in Kela form Y38. In the form Y38 the Employee reports also the family members who move abroad if the Employer (home department) applies the Finnish Centre for the Pensions (Eläketurvakeskus) A1 certificate for the Employee.
The Finnish Centre for Pensions sends two copies of the A1 certificate to the contact person who has filled in the application. One copy is for the Employee and one for the Aalto payroll.
The application form and further information: www.elaketurvakeskus.fi .
Further information on Kela and forms: Kela
Grant recipients are considered as self-employed and arrangements are made independently. More information on Mela pages.
In a case where a department/unit has hired a person who lives permanently abroad and is not entitled to the Finnish social security (a German living in Germany and working for Aalto, for example, or a Finnish citizen living permanently abroad), Aalto University must register as an employer in that country. The department/unit which has hired the employee is then responsible for the employer costs (social security, pension, unemployment insurance etc.) and registration fees in the destination country and the accounting fees of the costs.
More information on international assignments can be obtained from department's HR coordinator.
Comments concerning this page and instructions/policy regarding international assignments are welcomed by [email protected]