Higher bonuses for employees.No extra cost to the employer.

Paying performance bonuses through a personnel fund is an attractive alternative for Finnish employers. Finland's tax legislation lets companies deliver significantly higher net value to employees without increasing company cost. Allshares handles the setup and ongoing administration, from establishing the fund to reporting on it.

A cash bonus loses most of its value on the way to the employee.

Finnish employers pay performance bonuses as salary, where tax and social costs take their share before anything reaches the person who earned it. Paying more means costing more. Most companies accept the trade because the alternative is a legal structure they have no machinery to run.

What is a personnel fund?

A personnel fund is a legally regulated fund owned by a company's employees, a structure unique to Finnish legislation. Bonuses that would otherwise be paid as salary go into the fund instead, where they are invested and can grow.

Funded bonuses are invested on a gross basis, so returns are generated on the tax portion too, and tax is paid only on withdrawal. With 20% of withdrawals tax-free, the net bonus can be 40–50% higher than the same amount paid in cash, at no additional cost to the employer.