How to hire and pay EMPLOYEES IN

Finland

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Before hiring

EMPLOYEES IN
Finland

Before hiring employees in Finland, there are a few important things you’ll need to know. Firstly, fixed-term employment in Finland can’t be terminated. If an employee is performing poorly, employers must give employees a warning as well as an opportunity to improve before being terminated.

In addition to income tax in Finland, employees are also subject to municipal income tax, which varies between 16.5% and 23.5% depending on the employee’s municipality. Some employees may also pay church tax.

We know this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in Finland below.

At a Glance

CURRENCY

EUR

OFFICIAL LANGUAGE

FINNISH, SWEDISH

PAYROLL FREQUENCY

MONTHLY

PUBLIC HOLIDAYS

15

(based on region;
see here
)

EMPLOYER TAXES

~22%

of gross salary

13th / 14th SALARY

Not legally required, but an annual holiday bonus is common in most collective agreements. Usually, the bonus is 50% of an employee’s gross pay for the annual holiday.

Good to know

  • Collective bargaining agreements are very common in Finland, and approximately 80% of workers are members of a trade union. Collective bargaining is used across industries to provide better terms for employees than what the statutory requirements provide.
  • The regular working hours for white-collar employees specified in collective agreements are typically seven and a half hours a day and 37.5 hours per week.
  • Vacation is typically taken between May 2nd and September 30th—four weeks in the summer and one week in the winter.

Employment in

Finland

Working hours and overtime

In Finland, employees typically work eight hours a day, 40 hours a week—unless otherwise provided by collective agreement. However, the regular working hours for white-collar employees specified in collective agreements are typically seven and a half hours a day and 37.5 hours per week.

Regular business hours are typically 8:00am to 4:00pm or 9:00am to 5:00pm, from Monday to Friday.

Employment contracts
Probationary period

The probationary period in Finland is six months. 

Pensions
Notice period

The notice period in Finland depends on the duration of employment.

For dismissals:

  • Up to one year employment: 14 days notice
  • One year to four years of employment: One month notice
  • Four years to eight years: Two months notice
  • Eight years to 12 years: Four months notice 
  • More than 12 years: Six months notice

For resignations:

  • Up to 5 years of employment: 14 days’ notice
  • More than 5 years of employment: One month's notice
IP protection and non-compete agreements

Non-compete agreements in Finland must only be used for reasonable grounds. Compensation is not required for a non-compete agreement that lasts up to six months, but is required for agreements lasting longer. 

Employment cost calculator

Holidays

01 Jan

New Year's Day

25 Jun

Midsummer's Eve

06 Jan

Epiphany

26 Jun

Midsummer Day

02 Apr

Good Friday

06 Nov

All Saints' Day

04 Apr

Easter Sunday

06 Dec

Independence Day

05 Apr

Easter Monday

24 Dec

Christmas Eve

01 May

May Day

25 Dec

Christmas Day

13 May

Ascension Day

26 Dec

2nd Day of Christmas

23 May

Whit Sunday

01 Jan

New Year's Day

06 Jan

Epiphany

02 Apr

Good Friday

04 Apr

Easter Sunday

05 Apr

Easter Monday

01 May

May Day

13 May

Ascension Day

23 May

Whit Sunday

25 Jun

Midsummer's Eve

26 Jun

Midsummer Day

06 Nov

All Saints' Day

06 Dec

Independence Day

24 Dec

Christmas Eve

25 Dec

Christmas Day

Employer tax

An employer can expect to contribute about 22% in social contributions which includes health insurance, pension insurance, unemployment insurance, accident insurance premium, and, if agreed in the collective labour agreement, group life insurance. 

Individual tax

Employees in Finland are taxed from 0% to 31.25% depending on their income bracket. Social contributions are between 9.58% and 11.08%. 

Employees are also subject to municipal income tax, which varies between 16.5% and 23.5% depending on the municipality. Employees may also pay church tax.

Termination of employment

Fixed-term employment in Finland cannot be terminated. Employers must give a warning to an employee performing poorly, as well as an opportunity to improve before being terminated.

Vacation days that remain unused at the end of an employment relationship are compensated for the employee.

There is no statutory severance pay unless the employee’s termination is unjustified, or the employer has decided voluntarily to provide it.

Start hiring employees in

Finland

Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.

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wherever they work in the world.

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