Hire Employees in Finland

Your own entity is normally an Oy. Registration is simple, but the entity commits you to the co-operation obligations that make Finnish restructuring materially more procedural than elsewhere in the Nordics.

An Employer of Record inverts the sequence: the Finnish entity signs the contract, arranges TyEL pension insurance before the employee starts, reports earnings to the Incomes Register within five days of each payment and applies the työehtosopimus, while you direct the day-to-day work.

Finland has no statutory minimum wage. Pay floors come from the applicable collective agreement, and coverage is around 90%, so identifying it precedes any offer.

Finland's employer cost is around 19.5%, dominated by TyEL occupational pension at an average 17.10% employer share. The total TyEL contribution fell to 24.40% from 24.85%, which is a rare downward move and one that guidance written before the change misses.

On top sit the health insurance contribution at 1.91%, unemployment insurance at 0.31% rising to 1.23% above a payroll of €2,509,500, and accident insurance averaging around 0.51% but rated by activity.

There is no statutory minimum wage in Finland. Pay floors come from the applicable työehtosopimus, and coverage is around 90%. The agreement also commonly provides lomaraha, a holiday bonus typically worth 50% of holiday pay, which is not statutory but is close to universal and materially affects the annual figure.

The feature that most distinguishes Finland is the change negotiation obligation. Before restructuring, redundancies or significant changes to terms, an employer above the size threshold must conduct formal co-operation negotiations. Skipping them can cost up to €35,000 per employee in compensation, independently of whether the underlying decision was sound.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a small Finnish entity somewhere between 15 and 20 employees. Model both before committing, see EOR vs Entity for the full comparison, and plan any later migration so employees keep seniority.

Employer cost is around 19.5%, dominated by TyEL occupational pension at an average 17.10% employer share. The TyEL basic contribution fell to 24.85% for 2026 from 25.28% in 2025, a rare downward move. Note that the separate 24.40% figure sometimes quoted is the average total contribution after client bonuses and company-specific components, not the previous year’s basic rate; the two are easily conflated. A second change matters more for payroll configuration: the age tiers on the employee’s TyEL contribution were abolished for 2026, replaced by a flat 7.30% for everyone, so any system still applying 7.15% under 53 and 8.65% from 53 to 62 is running 2025 rules.

On top sit the health insurance contribution at 1.91%, unemployment insurance at 0.31% rising to 1.23% above a payroll of €2,509,500, and accident insurance averaging around 0.51% but rated by activity.

Lomaraha is the addition most often omitted. A holiday bonus typically worth 50% of holiday pay, it is not statutory but comes from the collective agreement and is close to universal, so it belongs in the annual figure rather than treated as discretionary.

Four representative profiles, costed with the 2026 contribution rates above. Salaries are illustrative market midpoints, not GX operating data, use them to see how the on-cost percentage behaves as pay rises, not as a salary benchmark for a specific role. For real market data on your roles, ask for a costing.

Watch the on-cost percentage rather than the absolute figure. 1 of the charges here are capped and 10 are not, so the effective employer rate falls as salary rises, but it flattens rather than disappearing. The senior rows below show where it settles.

Four representative profiles costed on 2026 statutory rates. Salaries are illustrative market midpoints, not GX operating data.

Payroll runs monthly in euros. Earnings must be reported to the Incomes Register within five calendar days of each payment, which is faster than most European reporting and needs automating from the first payroll rather than handled manually.

Tax is withheld against the employee’s tax card, which specifies a personal withholding rate and an income ceiling. Where earnings exceed the ceiling a higher additional rate applies, so a mid-year rise without a revised card produces over-withholding the employee will query.

Holiday pay accrues at two or two and a half days per month depending on length of service, and unused holiday is paid out on termination.

Thresholds and ceilings are uprated periodically, so a figure correct in January may not hold later in the year. Where a row below is flagged, published sources disagreed and the conflict is recorded rather than resolved.

Thresholds move on a local cycle that does not always fall in January, so a figure correct at the start of the year may not hold through it. Where a row below carries a flag, published sources disagreed and the conflict is recorded rather than resolved, there are 2 such rows on this page.

The sections that follow set out contracts and probation, working time, leave, termination and immigration in that order. Where an entitlement comes from a collective agreement rather than statute it is marked as such, because that distinction determines whether it is negotiable.

Written particulars are required. The applicable työehtosopimus determines pay, working time and much else, and it binds employers in the sector whether or not they are members of the signatory association.

Probation may run up to six months, and where the employee has been absent for more than thirty days it may be extended by a corresponding period, but only if the employer notifies the extension before the original period ends.

Fixed-term contracts require a justified reason. Successive fixed terms without one indicate a permanent need and convert the relationship to indefinite.

Eight hours a day and 40 a week under the Working Hours Act, with most collective agreements setting 37.5. Overtime is paid at 150% for the first two hours a day and 200% thereafter, and at 200% for weekly overtime. The Working Hours Act of 2020 also gives many employees a statutory right to flexible working.

Overtime is where payroll disputes usually start. Record hours from day one even where the role is salaried and the expectation is that overtime will not arise, reconstructing records after a complaint is far harder than keeping them.

Overtime is where payroll disputes usually begin, and the burden of proving hours worked generally sits with the employer. Record hours from the first day even for salaried roles where overtime is not expected, reconstructing a record after a complaint is considerably harder than keeping one.

Public holidays sit on top of the annual leave entitlement. Where a holiday falls at a weekend, practice varies, some markets move it, some grant a substitute day and some do neither, so check the position before assuming a day in lieu.

The 15 dates below are the statutory position. Employers in many markets grant more by policy or collective agreement, and sector agreements sometimes add local or patronal days that do not appear in a national list.

Finland observes 15 paid public holidays in 2026. Dates that fall at a weekend and any substitution rules are set out below; entitlement is separate from annual leave.

Maternity and parental leave: 40 working days maternity, then 320 parental days shared. Kela pays the allowance; many collective agreements require the employer to top up to full pay for a period. Reserved parental days: 160 of the 320 are reserved to each parent. Up to 63 days may be transferred to the other parent. Sick leave: From day 1. The employer pays full salary for a period set by the collective agreement, commonly 1 to 3 months; Kela pays thereafter. Care of a sick child: Up to 4 days. Paid under most collective agreements.

Study leave: Up to 2 years over a five-year period. Unpaid; job protected.

Dismissal requires proper and weighty grounds. For reasons relating to the employee, that means a documented record of the problem, a warning, and an opportunity to correct, a single incident rarely suffices unless it is serious enough to justify immediate cancellation.

For production and financial reasons, the employer must also show that the work has diminished and that no other work is reasonably available, including retraining the employee for a different role.

Change negotiations must precede the decision, not follow it. Where the employer falls within the co-operation act thresholds, failing to negotiate exposes it to compensation of up to €35,000 per employee, a penalty that applies even where the redundancy itself was justified.

Notice runs from fourteen days for under a year of service to six months beyond twelve years. There is no general statutory severance payment; the notice period and any negotiated package are the cost.

EU, EEA and Swiss nationals need no permit. A third-country national needs a residence permit for an employed person, which involves a partial labour market assessment by the employment authorities in most cases.

Allow two to four months. Specialist and start-up entrepreneur routes bypass the labour market assessment, and Finland has expanded fast-track processing for certified employers and specialist roles to a two-week target where the criteria are met.

The terms offered must match the applicable collective agreement, which the authority checks rather than accepting the contract at face value.

A cross-border hire may not attract local contributions at all. Under EU Regulations 883/2004 and 987/2009 a worker moving within the EEA is subject to one state’s social security system at a time. A posted worker stays in the home system for up to 24 months under Article 12, and someone working across two or more states follows a single state determined by a 25% activity test under Article 13. Where a valid A1 portable document is held, the host state cannot charge contributions. The certificate is declaratory rather than constitutive, the right legislation applies either way, but without it a host state can assess retroactively with penalties, and enforcement is aggressive in France, Belgium and Austria. Residual local charges are not always nil, so confirm the specific position rather than assuming zero.

Change negotiations must precede the decision, not follow it. Where the employer falls within the co-operation act thresholds, failing to negotiate before restructuring, redundancies or significant changes to terms exposes it to compensation of up to €35,000 per employee, a penalty that applies even where the underlying decision was entirely justified.

Dismissal for reasons relating to the employee requires proper and weighty grounds, meaning a documented record, a warning and an opportunity to correct. For production and financial reasons the employer must also show the work has diminished and no other work is reasonably available, including after retraining.

Practical controls: identify the työehtosopimus before making an offer, arrange TyEL before the start date, automate Incomes Register reporting to the five-day deadline, and run change negotiations before taking any restructuring decision.

Work backwards from the start date. For an EU national, a week or two is realistic. A non-EU hire needs a residence permit for an employed person, adding two to four months, with a labour market assessment in most cases.

Confirm before making an offer: which työehtosopimus applies and what pay floor it sets, since Finland has no statutory minimum wage; whether lomaraha is provided under that agreement, since it is close to universal and affects the annual figure; and the employer's payroll size, which determines the unemployment insurance rate step.

Earnings must be reported to the Incomes Register within five calendar days of each payment, which is faster than most European reporting and needs automating from the first payroll. TyEL insurance must be arranged with a pension provider before the employee starts.