Boundless Logo
Country Guide

Finland

JUMP TO SECTION
Finland

Warning: Undefined variable $post in /home/stagingwebsite.boundlesshq.com/public_html/wp-content/plugins/oxygen/component-framework/components/classes/code-block.class.php(133) : eval()'d code on line 2

Warning: Attempt to read property "ID" on null in /home/stagingwebsite.boundlesshq.com/public_html/wp-content/plugins/oxygen/component-framework/components/classes/code-block.class.php(133) : eval()'d code on line 2
  • Finland
  • Taxes
  • Benefits
  • Employment cost calculator
  • Employee rights
  • Employment conditions
  • Remote work
  • Hours of work
  • Payment
  • Leave
  • End of employment
  • Independent contracting
  • Local Employment Solution

    • Hiring in Finland at a glance

    CURRENCY
    EUR
    WORKING HOURS
    40
    PUBLIC/BANK HOLIDAYS
    12
    CAPITAL
    Helsinki
    LANGUAGE
    Finnish and Swedish
    REMOTE WORKERS
    42% as of 2021
    MINIMUM HOURLY SALARY
    No legal minimum
    TAX YEAR
    January 1st - December 31st
    DATE FORMAT
    Day/Month/Year
    MISCLASSIFICATION PENALTIES
    A number of penalties apply
    FUN FACT

    Employer tax: 

    27.69% - 29.39%

    Health Insurance: 1.16%

    Pension insurance: 25.12% on average

    Accident insurance: 0.7%

    Unemployment insurance: 0.5% - 2.05%

    Employee tax: 

    10.05% - 43.98%

    Pension insurance: 7.15% - 8.65% determined by age group

    Unemployment insurance 1.5%

    Municipality tax 4.36% - 10.86%

    Church tax 1% - 2.1%

    Income tax:

    Income tax rates

    OverNot overTax on Column 1Tax on Excess (%)
    019900012.64
    1990029700251519
    2970049000437730.25
    49000850001021534
    85800
    		2272744

    Finland Employment Cost Calculator

    Use our handy calculator to understand what are all the employment costs you have to consider in Finland.

    Provide us with some extra details and we will send you a full breakdown of the salary costs.

    Employer of Record in Finland

    Read more
    While an Employer of Record is the most typical way for legally employing a worker in a different country where the company doesn't have an entity, in Finland we directly employ your worker. Doing this, we take care of all Finland compliance aspects of employment, including payroll, taxes, statutory benefits, employment contracts and more.

    the employer of Record is responsible for:

    Ensuring their employment is compliant with local employment laws
    Processing local payroll
    Filing employment related taxes and returns
    Issuing payslips to the employee
    Distributing salary payments

    How employment in Finland works

    COMPANY

    Maintains a direct relationship with the employee, allocates them work tasks, and manages their performance.

    BOUNDLESS

    Takes care of payroll, taxes, benefits, ensuring the employee and the company are compliant with all legal regulations.

    EMPLOYEE

    Signs an employment contract with Boundless and fulfils all of their obligations as a worker for the company.

    Statutory Benefits in Finland

    Read more

    Medical Coverage

    Employers are obliged to provide occupational health care for all their employees regardless of the terms and duration of the employment relationship.

    Pension

    The employer must arrange and pay the pension provision for their employees if they are between 17 and 67 years old. 

    Accident insurance

    Employers must take accident insurance for their employees against accidents at work and occupational diseases.

    Common Non-mandatory Benefits in Finland

    Read more
    Accommodation
    Company car
    Phone
    Meals
    Sports and culture benefits
    Bonuses
    Stock options
    Supplementary health insurance 
    Learning & development

    Employee Rights and Protections in Finland

    Read more
    Employment agreement
    Remote work
    Health & Safety
    Payslip
    Right to equal treatment based on gender
    Overtime pay
    Whistleblower protection
    Privacy protection

    Paid time off: 24-30 days + bank holidays

    Paternity leave: In Finland all leaves connected to having children fall under the umbrella of Family Leave. The total parental allowance is 320 days, which is expected to be equally split between both parents. 

    Sick leave: 1 year

    Parental leave: 320 days split equally between both parents

    Maternity leave: In Finland all leaves connected to having children fall under the umbrella of Family Leave. The total parental allowance is 320 days, which is expected to be equally split between both parent. The pregnant parent is entitled to 40 extra days on top of that.

    Probationary period

    Read more
    According to the Employment Contracts Act, the employee and the employer can agree on a probationary period of up to six months. The only exception that allows a longer length is if the employer provides a special work-related training that lasts more than six continuous months.

    Payment Frequency

    Salaries must be paid on the last day of each pay period — a payday — unless otherwise agreed in the employment/collective agreement. That typically happens to be the last day of the month.

    End of Employment

    Read more
    An indefinitely valid employment agreement can be terminated with a notice to terminate. The notice periods are specified in the regulation or in the applicable collective agreement, and the employment agreement must be observed. The employer may not terminate an employment relationship without a proper and weighty reason. The proper and weighty reason can be related to the employee’s person or financial and production-related grounds.

    The employment agreement cannot be terminated on financial and production-related grounds if the employee can be placed in or trained for other duties. If the employer has terminated an employment agreement contrary to the termination grounds, it must be ordered to pay compensation for the unjustified termination of the employment agreement.

    Employees dismissed from their jobs may receive basic unemployment allowance from KELA or earnings-related unemployment allowance from an unemployment fund. The grounds for receiving basic or earnings-related allowance are otherwise the same, but the unemployed person needs to be a member of an unemployment fund to receive the allowance.

    Frequently Asked Questions

    What are my options if I want to hire a worker in Finland?

    While there are generally four ways of employing people across borders, not all are legal or sensible. Here is an overview of each way to employ a worker in Finland, outlining the potential cons.

     

    HQ country employment & payroll

    While the person is in Finland, they are employed and payrolled directly by the company’s HQ entity.
    Cons: This may appear attractive, but it generally isn't legal in the long term. HQ payroll won't be possible if the person is not a tax resident in the HQ country.

     

    Independent contractor agreements

    People are locally registered as sole traders or limited liability company owners in Finland and invoice for their work. There is no direct employment relationship.
    Cons: In Finland, this is not a compliant or legal way to engage full-time workers who work solely for your company. There will be challenges in attracting and retaining talent.

     

    Direct local employer setup

    The company sets up as a fully-compliant local employer. This often involves setting up a local entity and local tax registration.
    Cons: Expensive, time-consuming, high-level of complexity. Unknowns around how obligations and costs will evolve over time. There will be a need to stay on top of changes in regulations.

     

    Employment through a local entity established by an Employer of Record for the purposes of employment

    Employment is handled by a platform that specialises in employing people on behalf of customer companies. The Employer of Record helps to hire and pay employees.
    Cons: The ongoing costs may be higher than direct employment. Some education is needed to inform employees about how the employment relationship will work.

    How long does it take to set up a company in Finland?

    Setting up a local company in Finland is relatively straightforward. However, the difficult part comes after the initial setup when payroll needs to be calculated and run every month, taxes filed, benefits extended, change of rules and regulations followed. Here is an overview of everything you will find yourself needing to do.

    Can I employ people as independent contractors in Finland?

    While many employers practice employing remote workers as independent contractors, it's a bad practice. If an individual is giving their full and undivided attention to your company in Finland, treating them as an independent contractor is a likely breach of Finnish employment laws and of those in your country. 
     
    Your company could be liable for fines on owed holiday pay, sick pay, social welfare payments, paternity benefit, maternity benefit, or other legal measures. That is because the individuals you are working with do not receive the benefit of local employment laws and protections that are often afforded to people working full-time hours. In Finland there are a number of penalties that are in place for missclassifying employees for contractors.
     

    What does HR compliance mean in Finland, and why does it matter?

    When you hire employees in Finland, you have certain obligations as an employer. HR compliance is about ensuring your policies and procedures respect all applicable laws and regulations regarding employment and work practices. Complying with local employment law in Finland is fundamental for the correct running of your business - not only because these laws are in place to protect employees and guarantee their rights are safeguarded, but to minimise your risk of liabilities as an employer. Being compliant means respecting and following all local labour laws, sick leave and illness benefits, annual leave, minimum wage, tax credits, working hours regulations.

    How much does it cost to employ someone in Finland?

    As with every other country, there are certain costs associated with employing a worker in Finland that come on top of the gross salary you are offering. In Finland those taxes include health insurance, pension insurance, accident insurance and unemployment insurance. To view the exact percentages and amounts given the salary you are planning to offer, you can use our handy calculator tool.

    What does Employer of Record mean in Finland?

    While an Employer of Record is the most typical way for legally employing a worker in a different country where the company doesn't have an entity, in Finland, the model doesn't exist. Instead, an Employer of Record directly employs a worker through a company specifically established for that purpose. The employee then provides their services to the client company. We are responsible for:
    • informing you about any pre-employment requirements
    • ensuring their employment is compliant with Finnish employment law
    • informing you about the length of the maternity leave, paternity leave, public holidays, illness benefits, medical benefits
    • providing a locally compliant employment contract
    • processing local payroll
    • filing employment-related tax returns
    • issuing payslips to the employee
    • distributing salary payments
    • payments to the local tax authorities
    Customers that work with Boundless in Finland are responsible for:
    • sourcing and recruiting their own workers
    • managing the employee’s day-to-day work load
    • contributing to the personal / professional development of the employee through their work
    • following any guidance we give on employment and HR best practices or legal obligations in Finland, such as the employment contract, public holidays, annual leave, sick leave, maternity and paternity benefits, probationary periods, overtime pay, statutory redundancy payments, liability insurance and many others
    • ensuring that payroll bills relating to their team are paid to Boundless before the cut-off point in each pay cycle

    Who is responsible for filing and paying employees' taxes and social insurance contributions in Finland if employing through an Employer of Record?

    Boundless as the Employer of Record Finland that has established an entity specifically for the purposes of employing on behalf of customers, files all pertinent taxes and contributions as they relate to the compliant employment of an individual in Finland.

    How does Boundless as a company employing workers in Finland ensure HR compliance?

    We carefully choose employment lawyers or advisories to partner with in each country we operate in, including Finland. They ensure the Ireland employment contracts, and any other relevant documents required for new employees comply with the local jurisdiction. We have thorough discussions on specific norms such as payroll services, social protection, data protection, notice period or work-from-home regulations. Whenever a potentially sensitive issue arises in Finland, our internal team contacts the relevant firm to ensure all steps are taken to resolve it promptly.

    What are the legal responsibilities of a company when they use an employing company such as Boundless in Finland?

    The company remains responsible and informs employees of the day-to-day management of the people and teams that are employed through Boundless, including any disciplinary or performance issues.
     
    Boundless ensures compliance with Finnish-specific procedures, practices and labour laws while employing people and teams on behalf of the company.

    Do employees get all their rights and benefits when employed through a separate employing entity in Finland?

    Any new employee that is locally employed through an Employer of Record that has set up a company specifically for the purposes of employing on behalf of customers, gets full employment rights and benefits as specified in Finnish employment law. They get a locally compliant employment contract, statutory maternity leave, annual leave, illness benefits, any relevant tax credit, and many more. 

    What taxes do I need to pay in Finland?

    In Finland, both employers and employees have to pay taxes. For employers these include X, Y, Z and for employees they include A, B, C, D, E. To get a clear overview with both employee and employer taxes, use our salary breakdown calculator, submitting any additional data needed and get a downloadable pdf like this one.

    Choose Boundless as your employment partner in Finland
    Talk to us
    © 2020 - 2024 Boundless Technologies Limited.
    LinkedIn iconX (Twitter) iconEmail icon
    The Greenway, 112-114 St. Stephen's Green, Dublin, Ireland.