<img alt="" src="https://secure.intelligentcloudforesight.com/779425.png" style="display:none;">
Skip to content

Hiring in Finland

Hiring employees compliantly in Finland means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Finland so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Finland; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Need assistance hiring in Finland? Contact us about our International EOR  Service

Labor Laws in Finland

Employment laws in Finland are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on Finland employment laws and Finland policies here.

Employee Probation Period

  • Probationary period is 4 months
  • Maximum 6 months (in case of work related training)

Annual Leave in Finland

  • An employee is entitled to two and a half (2,5) weekdays of leave per each full holiday credit month if the employment relationship has lasted for at least one year by the end of the holiday credit year. 
  • If the duration of the employment relationship has been less than one year, the employee is entitled to two (2) weekdays of leave per each holiday credit month. 
  • Hence, the maximum length of statutory annual leave is either 24 or 30 days per year. 
  • It is noteworthy that Saturdays qualify as weekdays even if the employee does not work on Saturdays, so in practice the usual 30 days would equal to five (5) weeks of holiday. 


New call-to-action

Holidays in Finland

Finland celebrates eleven national public holidays as well as additional public holidays that vary by state:

New Year’s Day  
Easter Monday  
Labor Monday  
Ascension Day  
Midsummer Day  
All Saints’ Day  
Independence Day (non-Christian holiday)  
Christmas Day  
Stephen’s Day  


Onboard employees in days, anywhere in the world

Maternity Leave Finland

  • Under the current system in Finland, maternity leave is 4.2 months.
  • Another 6 months' parental leave can be shared.

Paternity Leave Finland

  • Fathers can, after the birth of the child, take paternity leave for a maximum of 54 work days.
  • Of this, the father can be at home at the same time as the mother for a maximum of 18 work days, i.e. approximately 3 weeks.

Sick Leave in Finland

  • The entitlement to sickness allowance commences nine working days after the illness begins (not counting the day of onset).
  • The employer generally pays the employee's wages during this waiting period.
  • Kela will pay sickness allowance for a maximum of one year (300 working days).

Work Hours in Finland

  • The standard workweek in Finland is 40 hours, and the work day cannot exceed 8 hours. 
  • Regular working hours may be arranged as an average of 40 hours over a period, not exceeding 1 year. 
  • Collective bargaining agreements typically provide for shorter hours of work.

Overtime in Finland

  • If work time limits are passed, compensation of overtime is compulsory.
    • Overtime is paid at an increased rate of 50% for the first two hours of overtime, and an increase of 100% for any hours beyond that.
    • An agreement may be made to exchange the overtime wages for extended time off in lieu.
    • It should be noted that an employee is entitled to refuse to work overtime and overtime work must be separately agreed between employee and employer on each occasion.

Termination of Employment in Finland

  • An employment contract valid until further notice can be terminated by the employer by giving notice to the employee. Unless otherwise provided in the applicable collective agreement, the parties to an employment relationship can agree on the notice period in the employment contract. The maximum length of the notice period to be observed by the employer is six months and the shortest 14 days. In addition, the notice period applicable for the employer must not be shorter than the one applicable for the employee.
  • An employer must have relevant and substantial reasons for giving an employee notice.
  • The grounds for terminating an employment contract are divided into two categories:
    • Individual grounds that relate to the conduct and performance of an individual employee.
    • Collective grounds that relate to financial and production-related reasons or to the company's restructuring.
    • The termination procedure depends on the grounds for dismissal. For a termination on collective grounds, the procedure to be followed is determined by the:
      • Size of the employer
      • Number of employees being dismissed.

Notice Period in Finland

  • The maximum length of the notice period to be observed by the employer is six months and the shortest 14 days.
  • If the period of notice is not agreed or set out by a collective agreement, the employer must apply the following statutory notice periods based on the employee's length of service:
    • Up to one year's employment: 14 days.
    • One to four years' employment: one month.
    • Four to eight years' employment: two months.
    • Eight to 12 years' employment: four months.
    • Over 12 years' employment: six months.

Severance in Finland

  • There is no statutory obligation to pay severance.

Finland Salary and Wages

Start your Global Expansion

13th/14 Month Salary in Finland

  • Yes 
  • There is no statutory requirement to pay the 13th or 14th month salary.
  • However, it is customary for holiday bonuses to be paid.
  • When they are paid they are generally 50% of the holiday pay.
New call-to-action

Income Tax in Finland

  • Finland taxes residents on their worldwide income.
  • Earned income received by residents is taxed at progressive tax rates for national tax purposes and at a flat tax rate for municipal (and church and social security) tax purposes.
  • Finland operates a dual income tax system for individuals, under which income is divided into earned income and capital income.
  • Earned income is subject is to national income tax, municipal income tax, church tax, public broadcasting tax, and social security contributions.
  • National tax rates for 2023 applicable to earned income are as follows:

Taxable income

Tax on column 1 (EUR)

Tax on excess (%)


Not Over

0 19,900 0 12.64
19,900 29,700 2,515 19
29,700 49,000 4,377 30.25
49,000 85,800 10,215 34
85,800   22,727 44
Tap the world's talent pool

Social Security in Finland

  • The social security contributions are imposed on employers, employees and self-employed individuals.


  • Employees’ pension insurance contribution is 7.15% for employees of age 17 to 52 years or 63 to 67 years and 8.65% for employees of age 53 to 62 years.
  • Employee’s Sickness Insurance Contribution is 1.96%. It consists of two parts: The Medicare contribution of 0.60% and the Daily allowance contribution of 1.36%. The daily allowance premium is not collected if the total amount of salary is less than EUR 15,703.
  • The Employee’s Unemployment Insurance contribution is 1.50%.


  • The employer’s part of the Employment Pension Insurance contributions may vary from employer to employer. The average percentage is 17.39 %.
  • The Employer's Unemployment Insurance contribution is graded according to the total compensation paid by the employer during a tax year. The contribution rate is 0.52% up to EUR 2,251,500.00 of total compensation paid and 2.06% on the exceeding compensation amount.
  • The average Statutory Accident Insurance rate is on average 0.57 % of the wage total. The average Statutory Group Life premium is 0.06 % of the wage sum.
  • The Employer’s Sickness Insurance Contribution rate is 1.53 %.
Social Security Contributions




Pension Insurance 17.39% 7.15% to 8.65%
Unemployment Insurance 0.52% to 2.06% 1.5%
Statutory Accident Insurance 0.57% -
Statutory Group Life Premium 0.06% -
Sickness Insurance 1.53% 1.96%

Immigration in Finland

  • If you plan to work or be an entrepreneur in Finland, you will usually need a residence permit. If you work without a residence permit, you may be punished by a fine.
  • If you are applying for a residence permit on the basis of employment, the residence permit application you should use depends on the kind of work you do or the kind of business you own. If you have completed a degree in Finland and you have a valid residence permit for studies, you may apply for a residence permit for seeking work.
  • If you have already been granted a residence permit on other grounds, it may include a right to work. If your residence permit includes the right to work, you will usually not need a separate permit for work. Look at your residence permit decision to find out whether you have the right to work. 
  • If you are a citizen of an EU Member State, Iceland, Liechtenstein, Norway or Switzerland, you do not need a residence permit for Finland.
  • If you apply for a residence permit in order to work in Finland, you must get an appropriate salary for your work. This salary must be enough to support you for the entire time your residence permit is valid.
  • If your residence permit is based on work, it may only give you the right to work for a certain employer or in a certain field of work. 
  • If you have been granted a residence permit for a certain field of work, you are usually permitted to change jobs freely if your residence permit has not expired and your new job is in the same field.
  •  If you have been granted a residence permit for a specific task, you are free to perform this task in the service of another employer.
  • If your residence permit only allows you to work for a certain employer or if you wish to change your field of work, you need to apply for a new residence permit.
  • If you have been granted a residence permit for work, your family may usually apply for a residence permit on the basis of family ties.
  • Some of the main work permits are outlined below.
Need assistance hiring in Finland? Contact us about our International EOR  Service
Type of Visa Documentation Validity Eligibility
Residence permit application for persons employed as a specialist
  • Valid passport
  • A signed employment contract or binding job offer
  • Passport photo
  • Color copies of the passport page containing personal data and of all passport pages that contain notes
  • Form MP_1
  • Certificate concerning the principal terms and conditions of employment
  • Consultancy agreement
  • Certificate of fringe benefits from the employer/client
  • Commission agreement with a Finnish client (must be included if the employer is a foreign company that has no office in Finland)
  • Job description
  • Certificate of a higher education degree
1 year (can be extended)
  • A specialist is a person who comes to Finland to work with expert tasks that require special expertise (highly skilled worker). 
  • You are also required to have a higher education degree.
  • If you apply for a residence permit as a specialist, your gross income must be at least EUR 3,000 per month.
Residence permit application for an employed person (TTOL)
  • Valid passport
  • A signed employment contract or binding job offer
  • Passport photo
  • Color copies of the passport page containing personal data and of all passport pages that contain notes
  • Form MP_1
  • Appendix to worker’s residence permit application (TEM 0.54), filled in by the employer
  • Certificate of paid taxes or certificate of tax debts (no more than 3 months old)
  • Certificates from the insurance company on employer’s statutory insurance premiums
  • Report on the number of employees in the company (also the share of full-time and part-time employees)
  • Report on recruitment of labor force from the Finnish labour market and the labour market within the EU/EEA.
  • Tuberculosis certificate
  • A certificate confirmed by an accountant of salaries paid to you each month during the validity of your previous permit and a certificate of other possible benefits or compensation you have received
1 year (can be extended)
  • You have signed a contract of employment or accepted a binding job offer. 
  • A residence permit for an employed person is connected with labor market testing, which means that the employer must establish if there is available labor force within a reasonable time in Finland or within the EU/EEA for the work in question.
Residence permit application for an entrepreneur
  • Valid passport
  • A signed employment contract or binding job offer
  • Passport photo
  • Color copies of the passport page containing personal data and of all passport pages that contain notes
  • Form MP_1
  • Trade register extract or explanation why the company has not been entered in the Trade Register
  • Description of the business idea of the company
  • Document concerning business premises
  • Report on the number of employees
  • Certificates on professional qualifications
  • Document concerning assets and other income
  • If the company is already in business:
  • The latest financial statements, if the company has been in business so long that it has financial statements
  • The latest updated accounts
  • If the company is not yet in business:
  • Calculation of profitability (estimate of the company’s revenue and costs for the next two years)
  • Copies of agreements signed with customers and partners, if such exist
1 year (can be extended) You are an entrepreneur if you are
  • a private entrepreneur who has a so called individually-owned business 
  • a partner in a general partnership
  • a general partner in a limited partnership (not a silent partner)
  • a member of a cooperative who has an unlimited liability for refinancing. The unlimited obligation to contribute has to be registered in the trade register.
  • a shareholder in a managerial position in a limited-liability company
Residence permit application for person applying EU Blue Card
  • Valid passport
  • A signed employment contract or binding job offer
  • Passport photo
  • Color copies of the passport page containing personal data and of all passport pages that contain notes
  • Form MP_1
  • Employment contract or a binding job offer, stating your duties and salary.
  • Evidence that you have completed a higher education degree
2 years
  • You must have a signed employment contract or a binding job offer and your work will last at least a year. 
  • Also you must have a higher education degree.
  • Your gross income must be at least EUR 4,852 per month.
  • The tasks must require special professional qualifications or expertise.
Onboard employees in days, anywhere in the world

Value Added Tax (VAT) in Finland

  • The general VAT rate is 24%. 
  • A reduced rate of 14% is applied to food and animal feed. 
  • The reduced VAT rate of 14% also applies to restaurant and catering services. 
  • A reduced VAT rate of 10% is applied to certain goods and services (e.g. books, subscriptions of newspapers and magazines lasting one month or longer, accommodation, passenger transport).
  • A zero rate applies in certain instances (e.g. intra-Community supplies of goods and exports of goods). Additionally, certain services (e.g. financial services, insurance services, and certain educational services) are exempted from VAT.


General VAT Rate

Group 1083


Reduced Rate Group 1083



Zero Rate Group 1083 7%
New call-to-action

Mandatory Benefits in Finland

  • These are mandatory benefits as prescribed by law
  • These include annual leave, public holidays, maternity leave, paternity leave, sick leave, notice period, severance pay
  • Statutory benefits also include social security benefits such as health insurance, unemployment insurance and pension insurance.
Tap the world's talent pool

Mandatory Benefits overview

  • Annual Leave

  • Public Holidays

  • Maternity Leave

  • Paternity Leave

  • Sick Leave

  • Notice period

  • Severance Pay

  • Social Security Benefits (e.g. health insurance, unemployment insurance, pension insurance)

Payments And Invoicing 

  • The tax year in Finland is the calendar year. 
  • Married persons are taxed separately on all types of income. 
  • Pre-filled tax returns are sent to all individuals in April of the year following the tax year. 
  • The individuals must review the pre-filled tax return and submit any corrections to the tax authorities within the specified time limit.
  • The final tax should be assessed at the latest by the end of October.
  • An employer must withhold tax from an employee’s salary for national, municipal and church tax purposes.

Payroll Accrual in Finland

Country Accruals Additional Information

Unemployment income limit 2,125,500
Employer health insurance 1.34%
pension insurance 14.35%
Unemployment insurance 0.45%
Accident insurance premium 0.80%
Maternity 105days
Christmas Bonus 8.33%
Vacations 9.86%
Compulsory social security contributions payable by the employer in 2020, according to the paid salaries, are as follows:  
Employer’s health insurance contribution 1.34% (no cap).
Employer’s pension insurance contribution 14.35% (on average, no cap). A temporary act allows a decrease of the employer’s
statutory pension insurance contribution between May 1 and December 31, 2020 by 2.6 per cent points due to COVID-19.
Employer’s unemployment insurance contribution 0.45% for the first EUR 2,125,500 of gross salaries and 1.7% for the portion of
the gross salaries exceeding EUR 2,125,500 (no cap). Employer’s unemployment insurance contribution applies to employees of
age 17 to 64.
Group life insurance premium 0.07% (on average, no cap).
Accident insurance premium 0.8% (on average, no cap).
Dont lose your competitive advantage

Payroll Accruals Additional Information

    Employment Accruals
Annual Leave The maximum length of statutory annual leave is either 24 or 30 days per year. This equals 6.57% (24/365 days) of annual income
Maternity Leave Under the current system in Finland, maternity leave is 4.2 months. This equals 35% (4.2/12 months) of annual income
Paternity Leave Under the current system in Finland, fathers are given 2.2 months leave until the child turns two. This equals 18.33% (2.2/12 months) of annual income
Overtime Overtime is paid at an increased rate of 50% for the first two hours of overtime, and an increase of 100% for any hours beyond that. Depends on the number of overtime hours worked
Social Security For employers, social security contributions are levied as a percentage of uncapped gross wages and salaries (excluding certain items, such as most employee stock option and share award benefits).
The employer is required to withhold 7.15% of an employee’s gross salary for pension insurance contributions (8.65% for employees aged 53 to 62) and 1.25% for unemployment insurance contributions.
A health insurance contribution of 0.68% is payable on the employee’s gross salary.
If an employee’s annual earned income is at least EUR 14,574, a health insurance premium of 1.18% also is payable by the employee, which is included in the individual’s personal tax withholding.
This equals 10.26% of annual income

Accrued Benefits in Finland

Christmas Bonus % 0%
Christmas Bonus Over Vacations % 0%
Severance per Year%

No statutory requirement

Vacations %

The maximum length of statutory annual leave is either 30 days per year (8.24% of annual salary)

Notice %

Employees are entitled to 14 days of notice period for one year of service or more (3.84%)

Christmas Bonus Over Notifications % 0%
Vacations Plus % 0%

Total percentage of Salary (yearly)

The total employment accruals as a percentage of salary per anum are equal to 12.36%


Why use Global Expansion to hire in Finland

Establishing a branch office or subsidiary in Finland can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Finland labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Finland law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Finland. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Finland Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.


New call-to-action

Ready to hire anywhere in the world?

Grow your team the right way with
Global Expansion.

Request a Proposal