Employment contracts in Finland may be in written, oral, or electronic form. It must include the employer’s and employee’s identities, the date employment will begin, the employee’s responsibilities, salary, work hours, annual leave, notice period for terminating the contract, and probation period. An employment contract is valid indefinitely unless there is a specific fixed term with a fair reason.

There is no statutory minimum wage in Finland, however, most employees are covered by collective agreements specifying minimum pay rates.

Common Benefits

Mobile allowance – approx. 20-50 Euro/month

Internet allowance -20-50 Euro/month

Fitness and wellness allowance – approx. 40 Euro/month

Car allowance – 600-900 Euro/month

Housing allowance – between 1500 – 3000 Euro/month

Meal vouchers

Working hours between 37.5-40 per week depending on the position and CBA.

Overtime

All working hours of more than the standard working hours per week are to be paid as overtime and are regulated by the employment contract/collective agreements etc. It must also be mutually agreed upon before the commencement of any overtime working hours.

In general, maximum overtime limits must not exceed 138 hours over four months and 250 hours annually.

Overtime hours are paid at 150.00% of the regular salary rate of pay for the first two hours and 200.00% for any subsequent hours. Any overtime work required on a weekend/rest day/Sunday is compensated at 200.00% of the regular salary rate of pay.

Employers are required to pay sick leave, though the duration of sick leave depends on the CBA in place. For the majority of CBA, it is 4 weeks of pay for under 3 years of employment. Over 3 years – up to 5 years. This should be reviewed case by case according to the applicable CBA. If the employee is sick for more than ten days and is eligible, their salary payment will reduce by 50.00% as a sickness payment allowance (sairauspäiväraha) from KELA.

Maternity Leave

Maternity leave in Finland is referred to as family leave and incorporates maternity leave, paternity leave, parental leave, and childcare leave. Generally, family leave is unpaid, but this is stipulated within the employment contract/collective agreement.Specific elements of family leave have an allowance paid for by Kela, e.g., parental and home care allowances.A pregnant employee is entitled to 105 days of maternity leave. Working is allowed during maternity leave if it can occur without endangering the safety of the mother, fetus, or child. However, the mother cannot work while on maternity leave two weeks before the due date and two weeks after giving birth.

Paternity Leave

In Finland, paternity leave can last up to 54 days. Fathers can choose to stay at home for up to 18 days at the same time as the child’s mother and then decide when to take the remaining 36 days. Fathers can use their paternity leave after maternity and parental leave. However, whenever the leave is taken, the employer must take the paternity leave before the child reaches two years old.New reforms are expected in summer 2022.

Parental Leave

Parental leave is 158 days. Both parents can take full-time parental leave for a maximum of two leave periods, with a minimum length of leave of 12 working days. Parental leave may be taken part-time, with each of the parents agreeing with their employer to shorten their working hours and reduce their pay accordingly for at least two months.

Annual leave is calculated from April 1 to March 31 and vacation is typically taken between May 2 -September 30. Employees earn two vacation days per month or 2.5 days per month for continuous employment of up to one year of employment; after that, the entitlement is four weeks’ leave per year. Upon completing 15 years of service, the annual leave entitlement increases to 3 days per month.

The annual holiday is earned and taken on working days. Saturday is also considered a working day even if the employee did not work on Saturdays ( i.e. a full week of vacation is equal to the use of 6 days of the annual leave entitlement). At least two weeks of the annual holiday must be taken as an uninterrupted period, however, the employer and the employee may agree on taking the holiday outside the holiday seasons and they may also convert part of the holiday into shorter working hours.

The rules concerning the calculation of the holiday pay depend on the pay system and holiday accrual rules applying to the employee. The holiday pay must be paid before the start of the holiday. However, for a holiday not exceeding six days, the holiday pay may be paid on the employee’s normal payday.

Depending on the Collective Agreement/Employment Contract terms, an employee may be allowed additional leave types, following the approval of the employer, for the following leave types:

Childcare leave: employees are entitled to take unpaid childcare leave for the full-time care of a child under the age of 3 or the care of an adoptive child for two years after adoption. The employer must take the leave before the child enters the school.

Public holidays that fall on the weekend are usually lost.

Date Day Holiday
1 Jan 2024 - MondayNew - Year’s Day
6 Jan 2024 - Saturday - Epiphany
29 Mar 2024 - Friday - Good Friday
31 Mar 2024 - Sunday - Easter Sunday
1 Apr 2024 - Monday - Easter Monday
1 May 2024 - Wednesday - May Day
9 May 2024 - Thursday - Ascension Day
19 May 2024 - Sunday - Whit Sunday
21 Jun 2024 - Friday - Midsummer’s Eve
22 Jun 2024 - Saturday - Midsummer Day
2 Nov 2024 - Saturday - All Saints’ Day
6 Dec 2024 - Friday - Independence Day
24 Dec 2024 - Tuesday - Christmas Eve
25 Dec 2024 - Wednesday - Christmas Day
26 Dec 24 - Thursday - 2nd Day of Christmas

Finland has universal healthcare.

The termination process varies according to how the employment agreement and collective agreement are in place and is based on the type of contract and reason for termination.

With effect from January 1, 2023, non-compete compensation clauses mean that employers will be obliged to pay compensation to any resigning employees or employees dismissed for cause, for the period of the noncompetition restriction after the employment.

Notice Period

The period of notice is determined following the Employment Contracts Act, which stipulates that the employer and the employee may agree on the periods of notice no longer than six months. Collective agreements may contain provisions on periods of notice. Suppose the periods of notice laid down in the collective agreement differ from the statutory periods of notice. In that case, the employer and the employee must observe the periods of notice laid down in the collective agreement.

The amount of notice is dependent on the length of service and reason for termination. If the employer terminates the contract, the notice period is as follows:

• Up to one year employment – 14 days’ notice

• One to four years of employment – one month’s notice

• Four to eight years of employment – two months’ notice

• Eight to 12 years of employment – four months’ notice

• Over 12 years of employment – six months’ notice

If the employee terminates the contract, the notice period is as follows:

• Up to 5 years of employment – 14 days’ notice

• More than five years of employment – 1-month notice

Severance Pay

There is no statutory severance pay in Finland, although severance may be agreed upon in the employment contract. 

Probation Period

Employer Payroll Contributions
25.55% - Pension Insurance- TyEL contribution (varies by company and contract type)
1.53% - Health Insurance
0.52% - Unemployment Insurance (2.06% For the part of the salary amount that exceeds 2,251,000 EUR per year)
Based on salary and job risk - Accident insurance premium
Varies by industry and company - Group life insurance premium (if it is so agreed in the collective labor agreement )

27.60% to 29.14% - Total Employment Cost

Employee Payroll Contributions
7.15% (8.65% of the employee is between 53-62) Pension Insurance (average)
1.96% (inclusive of daily allowance – which is zero for earnings below €15,703 annually, and medical care contribution) - Health Insurance
4.36%-10.86% - Municipal Tax
1.00%-2.20% - Church Tax
1.50% - Unemployment Insurance

15.97% to 23.67% - Total Employee Cost

Employee Income Tax
12.64% - Up to 19,900 EUR
19.00% - 19,900 – 29,700 EUR
30.25% - 29,700 – 49,000 EUR
34.00% - 49,000 – 85,800 EUR
44.00% - Over 85,800 EUR

Payroll Cycle

In Finland, the payroll frequency is monthly, typically paid on the last day of the month.

13th Salary

13th-month salary payments are customary in Finland and are usually paid before the employee’s holiday.

Citizens of the Nordic countries (Sweden, Norway, Denmark, and Iceland) may freely enter Finland and reside without a residence permit. They can also take up paid employment without a residence permit for an employed person.

EU citizens and citizens of Iceland, Liechtenstein, Norway, and Switzerland have the right to enter, reside, study, seek work, or practice a profession in Finland for three months without a residence permit. If the stay lasts longer, they must register their right to reside in Finland at a police department.

Persons from outside EU Area require a work permit and residence permit. Several categories depend on job grade and status. Highly skilled professionals with a job offer in Finland must apply for a specialist permit. Persons residing outside the European Economic Area (EEA) may also need a permit from the National Board of Patents and Registration to serve in a managerial position or carry out other responsibilities in a business.

When an EU citizen visits another member state on business they are required to prove where they pay their social security contributions. An A1 certificate issued by the employee’s home country is used to verify this. The regulations don’t set a threshold for when an A1 is required, and the guidelines issued previously by the EU have stated ‘the obligation covers any economic activity, even if only of short duration”. Finland had previously advised that an A1 certificate would be required from the first day of an outbound or inbound trip but has since updated its guidance advising that a certificate is not required for short trips unless the destination country requires it.

The standard rate of VAT in Finland is 24.00%.