Employment Law

Finnish Employment Contract

When recruiting in Finland, you need to provide all employees with a formal employment contract. These contracts should include all relevant details of the work arrangement, such as wages/salaries, parental leave and severance provisions. It should be written in Finnish and reference the local Euro currency.

Working with our Finnish PEO, Remoly's team of local experts can provide assistance in drafting strong employment contracts that comply with local regulations.

Fixed Term

Indefinite

Finnish Working Hours

Working hours limits in Finland are 40 hours per week and 8 hours per day, but may be lower depending on how the specific contract is negotiated. In addition to this, the employer must be paid. Overtime pay for the first two hours is calculated at 150% of the normal wage, and for hours beyond the two hours is calculated at 200% of the normal wage. Additionally, employees can refuse to work overtime at any time.

Vacation in Finland

Employees in Finland are entitled to five weeks (25 days) of paid leave. This leave accrues over time, with employees typically receiving 2.5 days of leave for a month's work. In some cases, a CBA means that the number of vacation days may be significantly increased.

Finnish Sick Leave

Employers in Finland must pay employees who are absent from work due to illness. The amount of insurance depends on the number of years of service. Employers must pay up to nine days of fully paid sick leave to employees who work for more than a month. For employees who have worked for less than one month, the employer only needs to pay half of the normal salary.

Parental Leave in Finland

Parents in Finland have access to paid parental leave. Maternity leave is 105 days, paternity leave is 54 days, and there is a further 158 days of allowances that can be shared between parents. Wages during parental leave are paid by the government, not the employer.

In 2021, the law will change to give parents of either gender equal rights to parental leave.

Taxes in Finland

Finland's personal income tax system is gradually adjusted from 0% to 31.25%. There is also local council tax, which ranges from 16.5% to 23.5% depending on location. Members of some religious groups also must pay a church tax of 1% to 2.2%, depending on the parish.

The corporate income tax rate is 20%.

Health Insurance in finland

Finland has a high-quality public healthcare system, so employers are not required to offer private health insurance as part of their benefits package.

Dismissal and Redundancy in Finland

The length of notice period required to terminate a contract in Finland depends on the period of employment. For employers with less than five years of employment, 14 days' notice must be given. For employees over five years, the mandatory notice period is one month.

The notice period may also vary depending on the specific role, industry and CBAs the company may have in place.

For companies expanding overseas for the first time, dealing with employee layoffs and dealing with severance packages can be complicated. Remoly's Finnish PEOs can reduce risks for foreign companies and provide guidance during the process.

Salary and Benefits

Finnish Compensation Law

There is no legally mandated minimum wage in Finland, which depends on negotiations and collective labor agreements for specific positions and industries. It is therefore important for any employer to familiarize themselves with the latest regulations appropriate to their circumstances.

Welfare Management in Finland

Setting up a benefits system for Finnish employees can be difficult and complex if you are not familiar with the country and its labor laws. If you want to handle the setup independently, it may take several weeks and may delay your scaling process.

Remoly offers an alternative to simplify PEO and benefits administration in Finland. Our outsourcing services will cover your benefits setup and administration, helping you focus on faster, more successful expansion.