Finland
Knowledge Base
Frequently asked question, important data and information on EOR.
General information
There is no statutory minimum wage in Finland. Instead, the minimum wages are determined by collective agreements negotiated between employers and employee unions in each industry.
Labor Law
Laws that regulate Labor Relationship
The main laws that regulate labor relationships in Finland are the Employment Contracts Act, the Annual Holidays Act, the Working Hours Act, the Occupational Safety and Health Act, and the Act on Co-operation within Undertakings. These laws provide guidance on topics such as minimum wage, working hours, annual leave, termination of employment, and health and safety regulations.
Onboarding guide
Requirements for a labor contract
At least the following matters are generally recorded in the contract of employment:
• The parties to the contract of employment
• The date of commencement of work
• Whether the contract is valid for the present or fixed-term
• Probationary period and its duration
• Place of work
• Duties
• Remuneration and its method of payment
• Working hours
• Annual holidays and holiday pay
• Period of notice
• Mention of the collective agreement that the contract of employment observes
• Insurance institution
Pre-hire Medical exam
Pre-hire medical exams are not required in Finland.
Types of contracts
• Fixed-term
• Open-ended contract
• Zero-hour contract
• Trial period contract
Probation Period
A probationary period can be agreed upon at the beginning of the contract of employment. The probationary period cannot exceed six months. In fixed-term employment, the probationary period cannot exceed half of the employment contract duration. During this period, the employee can assess whether the work is suitable for them, and the employer can assess whether the employee is suitable for the task.
Are offer letters mandatory in the country?
Offer letters are not mandatory, but it is recommended to provide one to document the terms of the employment offer.
Are digital signatures in labor contracts valid?
Yes, digital signatures are valid in labor contracts in Finland.
Mandatory onboarding documents
• Copy of Passport
• ID
• Work permit (if relevant)
• Bank statement – proof of bank account.
• EE tax card
Statutory benefits
Annual Bonus
There is no statutory 13th-month salary bonus in Finland.
Additional bonus
Statutory bonuses are not common in Finland, but employers may provide discretionary bonuses based on their own policies.
Leaves (medical, maternity, paternity, etc.)
The leaves that apply to employees in Finland include:
• Annual leave (see annual leave section),
• Sick leave: If your employment has continued for more than a month before you fall ill, you will receive full salary for at least the day you fell ill and for nine days after the day you fell ill. If you are unable to return to work after these ten days, you can apply for sickness allowance (sairauspäiväraha) from Kela, if you are covered by the Finnish social security.
• Pregnancy leave: The pregnancy leave lasts for 40 working days. It usually begins 30 weekdays before the child’s due date. Pregnancy leave must be started at least 14 weekdays before the due date.
• Parental leave: Both parents are entitled to parental leave. Only one parent at a time can take parental leave. Parents can, however, take 18 working days of parental leave or pregnancy and parental leave at the same time. The parental leave lasts for 320 working days, i.e. approximately 14 months. If the child has two parents, both of them are entitled to 160 working days’ leave. The parent may give up a maximum of 63 parental leave days to the child’s other parent. The person to whom the days are turned over is entitled to parental leave for those days. A single parent can use all the 320 working days.
• Child care leave: If you are an employee, you have the right to four child care leave periods at the most. One child care leave period must last for at least a month. An employer and employee may also agree on more or shorter periods of child care leave periods between themselves.
Annual Leave (days per year)
The earning of annual holiday will be in accordance with either the 14-day rule or the 35-hour rule, depending on the employee’s agreed working hours. Both rules are based on the principle of full holiday credit months.
• The 14-day rule applies to employees whose contract states that they work at least 14 days every month. The number of working days, not the number of working hours, is the determining factor. Working days of one hour and eight hours are of equal value here.
• The 35-hour rule applies to employees who, in accordance with their contract, work a minimum of 35 hours during at least one month but do not come under the 14-day rule.
How do vacation days expire?
Annual leave must be used by the end of the vacation accrual period, which is typically the calendar year following the year in which the leave is earned.
Official Holidays
The official holidays for 2023 in Finland are:
• New Year’s Day: January 1
• Epiphany: January 6
• Good Friday: April 7
• Second Easter Day: April 10
• May Day: May 1
• Ascension Day: May 18
• Midsummer’s Eve: June 23
• Midsummer’s Day: June 24
• All Saints’ Day: November 4
• Independence Day: December 6
• Christmas Eve: December 24
• Christmas Day: December 25
• Second Day of Christmas: December 26
Working on holidays and Sundays
Employees may work on public holidays and Sundays, but they are entitled to additional pay or time off in lieu. The exact amount of extra pay varies depending on the collective agreement or employment contract.
Number of Working hours
The statutory working hours per week in Finland are 40 hours, with a maximum of 8 hours per day.
Overtime
The overtime policy in Finland is governed by collective agreements or employment contracts. Overtime pay is typically 50% higher than the regular hourly rate. The legal limit for overtime is 138 hours per four-month period, or an average of 35 hours per week.
Social Security (what does it cover)
Social security in Finland covers healthcare, sickness benefits, unemployment benefits, pension benefits, and family benefits.
Payroll
Salary payment currency
Euro (EUR).
Can salary be paid in a different currency other than the local currency?
Yes, salaries can be paid in a different currency other than the local currency with the consent of the employee.
Payment frequency
Wages and salaries may be paid on an hourly, weekly or monthly basis. In some sectors, work is done on piecework pay, on the basis of results.
VAT percentage
The Value Added Tax (VAT) in Finland is currently 24%. There are reduced VAT rates of 10% and 14% for certain goods and services.
Income Tax
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. The National tax rates for 2023 varies from 12.64% to 44%. For more information see https://taxsummaries.pwc.com/finland/individual/taxes-on-personal-income
Tax Payer Identification Number
In Finland, the Taxpayer Identification Number is known as the “henkilötunnus” or “personal identity code.”
Offboarding
Voluntary resignation
In Finland, employees have the right to resign from their job voluntarily. There is no requirement for the employee to provide a reason for their resignation. The notice period for voluntary resignation is typically determined by the employment contract or collective bargaining agreement.
Contract termination
A labor contract in Finland can be terminated in several ways, including:
Mutual agreement between the employer and employee
Termination by the employer with just cause
Resignation by the employee
Termination by the employer due to redundancy or other business-related reasons
Justified Dismissal
Justified dismissal in Finland is referred to as “irtisanominen.” An employer may terminate an employment contract with just cause. The reason can be one of the following:
• the employee has seriously neglected work-related obligations
• the employee’s situation has changed so that the employee is no longer able to cope with the work duties
• the employer’s situation has changed so that the employer is no longer able to offer the work done by the employee and it is not possible to reassign or retrain the employee.
The employer must provide written notice of the termination and the reasons for it.
Unjustified Dismissal
If an employer terminates an employee’s contract without just cause, the employee may be entitled to compensation. The amount of compensation depends on the employee’s length of service and the reason for the termination. For example, an employee with less than 12 years of service may be entitled to up to 24 months’ salary as compensation for an unjustified dismissal.
In Finland, employers are required to pay severance pay to employees if their employment is terminated due to redundancy or other business-related reasons. The amount of severance pay depends on the employee’s length of service, salary, and the reason for the termination.
Minimum Notice Period
The minimum notice period in Finland depends on the length of the employee’s service. The notice period ranges from 14 days to 6 months.
• If the employment relationship has lasted for less than one year, the notice period is 14 days.
• If the employment relationship has lasted for more than one year but less than four years, the notice period is one month.
• If the employment relationship has lasted for more than four years but less than eight years, the notice period is two months.
• If the employment relationship has lasted for more than eight years, the notice period is six months.
• During the probation period, the notice period is 14 days.
Immigration
Visa process
If a foreign national wishes to work in Finland, they must obtain a residence permit for an employed person. To apply for a permit online through the Enter Finland service. After applying, the employee must visit the closest Finnish diplomatic mission to prove his/her identity, and present original copies of the application appendices. The employee must visit a Finnish diplomatic mission within three months of submitting the application online. The application cannot be processed until the employee have visited the Finnish diplomatic mission. Is needed to make an appointment in advance to visit a Finnish diplomatic mission.
Visa documents
The mandatory documents to obtain a work visa in Finland include a valid passport, proof of employment, a medical certificate, proof of financial resources, and a criminal background check. The applicant must also provide proof of health insurance coverage.
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