Are you an employer, agency, or contractor operating in the Finnish market? Are you going to become self-employed to set up your own business in Finland? Using an umbrella company is a simple way to get paid on time and remain tax compliant.
How Does an Umbrella Company Work?
When you decide to join an umbrella company, it becomes your employer, and the umbrella company invoices the agency or end client. And the agency or any client pays the money directly to the umbrella company. The umbrella company will then deduct taxes before paying you your wage. It pays you directly into your personal bank account for the time worked.
Umbrella companies are just regular companies that are already set up. They have the right tax registrations in place, they are insured, they have a bank account open, and they are ready to start straight away.
Umbrella companies are popular with professional contractors who either don’t want or don’t need their own personal limited company. You can pop it under the umbrella company whenever you need it and pop back out again when you don’t just like you’d use a normal umbrella.
So, here are core services of umbrella companies:
- Administering payroll services for employees;
- Invoicing services;
- Withholding payroll taxes and making essential deductions;
- Providing employee benefits such as holiday pay, sick pay, maternity, and paternity pay.
There are no setup charges and it’s so easy to join our umbrella company in Finland. For more details visit Swapp Agency.
The Benefits of Using an Umbrella Company
A lot of people probably are concerned about taxes in Finland. According to Statista, general government tax revenue in Finland reached 42 percent of GDP in 2020. Hopefully, by now you’ve received the good news of your new contract, an agreed rate of pay, and a start date with the client.
So, an umbrella company offers payroll services for a self-employed person who is contracting with a client. It is an alternative to setting up a separate private limited company. In other words, an umbrella company typically employs contractors that work on a number of different fixed-term contracts and is responsible amongst other things for deducting taxes.
What are the actual benefits of joining an umbrella company?
An umbrella company will calculate, deduct, and pay your tax. In addition, an umbrella company can offer you the same benefits as permanent employment such as sick pay, holiday pay, but with the added benefit of making you a tax saving on any expenses that you incur.
Also, the whole time that you’re employed by that umbrella company, even if you switch between roles, you count as having one continuous employer. So, from a lending perspective, it may potentially help you borrow, because you’re employed by one person the whole time even if you work at different contract roles.
When shopping around for an umbrella company, you’ll also see a lot of soft benefits. These include things like discounts on online retailers, cashback at petrol stations, etc.
Umbrella Company Versus Limited Company
Let’s break down the differences to consider when deciding whether to use an umbrella company or set up a limited company.
1. Do you need to choose a company name?
When contracting via an umbrella company, there is no requirement to select a company name. But you must do so if contracting via a personal limited company.
2. What kind of bank account do you need?
Selecting an umbrella company, payment can be made to a personal account. However, a business bank account is mandatory for a limited company.
3. Do you need to be VAT registered?
All umbrella companies are already VAT registered. Depending on your firm turnover, contracting via a personal limited company may require VAT registration.
How to Pick the Best Umbrella Company in Finland
Contractors and freelancers always require some kind of help related to their finances and contract attacks. But most of the time this costs money and only ends up being time-consuming. If this is the case with you, you can easily avoid tax problems by joining an umbrella company.
There’s a huge variety of umbrella firms with different specialties and benefits. What to consider when choosing an umbrella company in Finland?
To make sure you join the best umbrella company in Finland, you should consider the following:
1. Do they offer same-day payments? It’s your money, so you should get it on the same day you get paid.
2. Are they going to charge you to join or leave them? In short, they shouldn’t.
3. What are the weekly or monthly fees? Make sure you check for any hidden costs.
4. Can they work with your agency? Agencies only work with certain umbrella companies. Make sure the umbrella company is going to work with your agency.
Why Swapp Agency
One of the main reasons you might use Swapp Agency over another umbrella provider is the fact that we allow salary sacrifice into your own private pension. This is the most tax-efficient way to pay into your own private pension.
With Swapp Agency, you can concentrate on doing all the things you love in your spare time. Your contract and closer looking after all the paperwork will become a smart alternative to employment. Swapp Agency gives you access to independent financial advisors, who specialize in helping contractors and freelancers with mortgages, insurances, and pensions.
Using an umbrella company is the fastest and easiest way to get paid in Finland. Swapp Agency offers payroll services in Finland helping both employers and individuals to comply with Finnish legislation. Using our umbrella company, you can be sure that we will take care of administering the benefits due to the employees, like payment for treatment of sicknesses, holiday pay, and severance pay.
If you have any questions about tax in Finland, we offer certified accountants and advisors who provide you with tax-efficient advice that helps to keep your tax bill minimum. To get in touch, visit Swapp Agency today.