Understanding Employment Norms in Finland: A Comprehensive Guide
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Hiring in Finland? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Finland.

Employment Norms in Finland

Finland is a Nordic country situated in northern Europe. It is well-known for its high standard of living, vibrant technology industry, and unique culture. The country's friendly social norms add to its appeal as a great destination for business expansion. EOR services help potential employers navigate through the legal system to ensure legal compliance and help with employee management.

General Information:

  • The official currency of Finland is Euro (EUR)
  • Helsinki is the capital city of Finland
  • The official languages of Finland are Finnish and Swedish. Legal documents can be drafted in either Finnish or Swedish to be considered legally valid
  • As of 2021, the GDP of Finland was reported to be 236.2 billion USD.
The Ministry of Economic Affairs and Employment of Finland handles labor legislation in Finland. Employers and employees are required to follow these norms while drafting agreements.
Finland map

Table of Contents

  • Agreements
  • Onboarding Process
  • Visa
  • Minimum Wage
  • Payroll Cycle
  • Annual Bonus
  • Health Benefits
  • Working Hours and Overtime
  • Leaves
  • Social Security
  • Taxes for Employers
  • Taxes for Employees
  • Probation
  • Termination
  • Severance Pay
  • Employees or Contractors
  • Final Words


  • The agreement or the contract of employment states the nature of work, period of work (present or fixed-term), salary, working hours, notice period, termination grounds, holiday pay, etc.
  • The agreements can be of two types -
    • Present: Most agreements are of this type. This states the employee works until dismissed by the employer or until the employee resigns. This is for a permanent job.
    • Fixed-term: This contract states the time period until the contract is valid. This can only be made for valid reasons. The Acts and collective agreements in Finland decide when these types of contracts can be used.
  • Employees can form agreements individually or through unions.
  • The employer must also send a copy of the collective agreements to the Ministry of Social Affairs and Health within one month of the signing of the agreement.
  • The official language is Swedish or Finnish of Finland, and the legal documents and agreements should be in the same language. The documents can also be translated into the language understood by the employees.
Onboarding Process

Onboarding Process

There is no fixed onboarding process in Finland. However, some common practices are mentioned below.
  • The Master Services Agreement (MSA) must be signed for the process to begin.
  • The employee must be given a copy of the written agreement.
  • The new employee must be enrolled with the relevant organizations for purposes such as social security, taxes, etc.


Business Visa

  • A single-entry a Schengen visa is required to travel to Finland for business purposes. The visa may be a single-entry, double-entry or, multiple-entry (valid for 5 years) visa with a maximum validity of 90 days in 180 days.
  • The individual would be required to submit travel insurance documents, an official invitation letter, airplane tickets, and a hotel reservation confirmation.
  • A personal interview may be requested to determine the purpose of the visit.

Work Visa

  • To work in Finland, a residence permit is required for certain jobs which would grant the holder the right to work in Finland upon fulfilling certain other criteria. The details of this should be checked with the Finnish Immigration Service.
  • The employer is required to fill and sign certain forms for the residence permit application. This information must be submitted by the employer via the Enter Finland service. However, the employer cannot fill in the form on behalf of the employee.

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Minimum Wage

Minimum Wage

Finland does not have any mandatory minimum wage. Collective bargaining agreements usually determine the minimum wage.
Payroll Cycle

Payroll Cycle

The payroll cycle in Finland is typically monthly. It can also be paid bi-monthly if decided at the time of agreement.
Annual Bonus

Annual Bonus

There is no mandatory annual bonus in Finland. Employees can receive additional pay (annually) as a bonus before the holidays. This must be decided upon in the collective agreements. Although this is not a mandatory requirement, it is a common practice.
Health Benefits

Health Benefits

Health benefits are covered under the social security institution, Kela, in Finland. The employee must be enrolled in the social security scheme to avail of these benefits.
Health benefits cover -
  • Maternity benefits
  • Sickness fund
  • Sickness fund
Working Hours and Overtime

Working Hours and Overtime

  • Work hours: A typical work week in Finland consists of 37.5 hours a week with 7.5 hours per day. If employers want they can change this to 40 hours per week and 8 hours per day. Employees work from Monday to Friday.
  • Break: A break of at least one hour is mandatory for a work day of more than 6 hours.
  • Overtime: Overtime pay is not mandatory in Finland. If the overtime is mutually agreed upon in the agreement, the employer must pay the employee as per the Working Hours Act. The employer must pay 150% of the hourly wage for the first 2 hours and 200% for the following hours.


Sick Leave

Employees are eligible for 300 days of sick leave. If an employee has worked for a month, then the employer pays 100% of the salary and 50% if they have worked for less than a month for an initial 9 days. After the ninth-day employees receive 40 to 60% of their salary from Kela (social security provider).

Parental leaves

  • This leave can be taken by either of the parents with only one being allotted the leave at a time. The parental leave can be for a maximum of 158 days. This leave is also covered by Social Insurance (Kela).

Maternity leaves

  • Female employees are entitled to 105 days of maternity leave. This paid leave should be taken 30 days before the birth of the child and the remaining 75 days can be taken after the birth of the child. Kela, which is social insurance pays 29.05 EUR per day during this period

Paternity leaves

  • Employees can take a maximum of 54 days of paternity leave. The father can take the leave along with the mother at the same time for 18 days only. The paternity leave can only be taken before the child reaches the age of 2. Kela (Social security) pays the paternity allowance, of 29.05EUR per day.

Annual leaves

  • Employees can take paid off for 24 to 30 days if agreed at the time of employment contract.

Other leaves

  • Education leave: Those employees who have spent one year working with an employer can take unpaid education leaves of two years which can be extended to five years. Employees who have worked for less than three months can take only five days off.
  • Hospitalization leave: Employees who are parents are allowed to take leave of four days if their child is ill. Compensation for the same can be decided by collective bargaining.

Public Holidays (for the Calendar year 2023)

  • New Year's Day (1st January)
  • Epiphany (6th January)
  • Good Friday (7th April)
  • Easter Sunday (9th April)
  • Easter Monday (10th April)
  • May Day (1st May)
  • Ascension Day (18th May)
  • Pentecost (28th May)
  • Midsummer Day (23rd June)
  • All Saints' Day (4th November)
  • Independence Day (6th December)
  • Christmas Day (25th December)
  • Second Day of Christmas (26th December)

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Social Security

Social Security

Kela is the Social Security Institution of Finland. It covers a lot of different aspects with some of the common ones being -
  • Healthcare
  • Unemployment
  • Pension
  • Survivor benefits
  • Disability
Employees and employers are required to make certain contributions towards social security to be eligible for social security insurance.
Taxes for Employers

Taxes for Employers

The following is the tax breakdown for employers in Finland
  • Health insurance: 1.53%
  • Pension insurance: 16.95%
  • Unemployment insurance: 0.05%
  • Accident insurance: 0.70 (applicable and dependent on risk factors)
  • Group life insurance: 0.06 (if agreed upon during the bargaining process)
  • Corporate income tax: 20%

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Taxes for Employees

Taxes for Employees

  • Pension insurance: 7.15%
  • Health insurance: 0.68%
  • 1.86%: above EUR 14,766
  • Unemployment insurance: 1.4%

Income Tax

  • Up to EUR 18,600 - 0%
  • EUR 18,600 to EUR 27,900 - 6%
  • EUR 27,900 to EUR 45,900- 17.25%
  • EUR 45,900 to EUR 80,500 - 21.25%
  • More than EUR 80,500 - 31.25%


The probation period in Finland can range from one to six months.

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Termination rules in Finland are complex. The termination must take place only upon the agreement of both parties. It is dependent on the agreements as well as the reason for termination.
The notice period ranges from 2 weeks to not more than 6 months. The notice period is -
  • 2 weeks for up to one year of work
  • 1 month for one to four years of work
  • 2 months for four to eight years of work
  • 4 months for eight to twelve years of work
  • 6 months for more than twelve years of work
Severance Pay

Severance Pay

There is no mandatory severance pay in Finland. However, it can be mutually agreed upon during the employee agreements. Also, employers should pay for any outstanding vacation pay.
Employees or Contractors

Employees or Contractors

  • In Finland, independent contractors are not considered employees.
  • Employees are those who are on a payroll and are registered with the relevant authorities for that particular employer. Employees are entitled to certain benefits. The employer is required to withhold and file taxes on the employee's behalf.
  • Independent contractors do not share the same benefits. They are hired for a fixed amount of work and paid a previously agreed-upon price.
  • Misclassification of the two would lead to heavy penalties for the employer.
Final Words

Final Words

Finland has a robust and fair employment system that prioritizes the welfare of its employees along with a comprehensive social security system. Finland is also a member state of the European Union making it a lucrative destination for business expansion. EOR services ensure proper and hassle-free employee management letting businesses focus on their goals.

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