Guide to employment, payroll and benefits in

Finland

Rivermate offers complete payroll, benefits and compliance services for

Finland

01. Overview

Last updated: 

August 19, 2021

Currency
Euro
Capital
Helsinki
Ease of doing business
80.2
Language
Finnish
Population
5540720
GDP growth
2.63%

02. Grow your team in

Finland

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Finland

, particularly if you don't have established local relationships. You can hire employees in

Finland

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Finland is a Nordic country in Northern Europe, officially known as the Republic of Finland. It is bordered on the west by Sweden, on the east by Russia, and on the north by Norway, and is characterized on the west by the Gulf of Bothnia and on the south by the Gulf of Finland of the Baltic Sea, which runs through Estonia. Finland has a population of 5.5 million people and a land area of 338,455 square kilometers. Helsinki is the capital and largest city of Finland. The Finns' native language, Finnish, is one of only a few Finnic languages spoken around the world. The climate varies according to latitude, ranging from the warm continental climate in the south to the cold boreal climate in the north. Finland was first settled around 9000 BC, after the Last Glacial Period, and is predominantly a boreal forest biome with over 180,000 lakes. Several distinct ceramic types and cultures emerged during the Stone Age. In Fennoscandia and the Baltic region, the Bronze and Iron Ages were marked by extensive interaction with other cultures. As a result of the Northern Crusades, Finland eventually became an integral part of Sweden starting in the late 13th century. Finland was annexed by Russia as the independent Grand Duchy of Finland in 1809 as a result of the Finnish War, during which time Finnish art flourished and the notion of independence started to take root. Finland was the first European country to offer universal suffrage in 1906, and the first country in the world to allow all adult people to run for public office. Nicholas II, Russia's last Tsar, attempted to russify Finland and end its political sovereignty, but Finland declared independence from Russia after the 1917 Russian Revolution. The Finnish Civil War shattered the fledgling state in 1918. Finland fought the Soviet Union in the Winter War and the Continuation War, as well as Nazi Germany in the Lapland War, during World War II. Finland lost parts of its territories as a result of the wars, but it retained its independence. Until the 1950s, Finland was largely an agrarian region. Following WWII, the nation quickly industrialized and advanced its economy, while also establishing a large welfare state based on the Nordic model, resulting in widespread prosperity and a high per capita income. Finland became a member of the United Nations in 1955 and declared its neutrality. Finland joined the Organization for Economic Cooperation and Development (OECD) in 1969, the NATO Partnership for Peace in 1994, the European Union in 1995, the Euro-Atlantic Partnership Council in 1997, and the Eurozone in 1999. Finland ranks first in many national performance indicators, including education, economic competitiveness, civil liberties, quality of life, and human growth. Finland was ranked first in the World Human Capital and Press Freedom Indexes in 2015, as well as the world's most stable nation in the Fragile States Index from 2011 to 2016, and second in the Global Gender Gap Report.

04. Public holidays

05. Types of leave

Paid time off

The time from April 1st to March 31st of the following year is used to measure annual leave. Usually, vacation is taken between May 2 and September 30. (4 weeks in the summer and 1 week in the winter).Employees who have worked for more than a year are entitled to two holiday days per month or 2.5 vacation days per month. Employees who have worked for the company for at least 15 years are entitled to three vacation days every month.

Public holidays

Finland recognizes ten public holidays.

Sick days

Employees who have worked for at least a month are entitled to complete sick leave for a period of nine working days. Within the nine days, the employee must have a doctor's medical certificate.

Maternity leave

Pregnant workers have the option of starting maternity leave up to 50 days before the planned due date. The employee earns insurance for 105 working days after maternity leave starts (Monday-Saturday, excluding holidays).At least two months before taking maternity leave, the employee must contact the boss and register for maternity pay.

Paternity leave

Paternity leave is granted to fathers for a total of 54 days, with a limit of 18 days to be taken concurrently with the mother. The remaining days must be split into several cycles.

Parental leave

Both parents are entitled to 158 days of paid maternity leave, which begins when the child is approximately 9 months old and expires when the child is approximately 9 months old. Since the leave cannot be taken by both parents at the same time, parents must agree on when they will take it.

Other leave

06. Employment termination

Termination process

Employers must offer reasonable justification for terminating an employee. Before terminating an employee for poor performance, the employer must get a warning and an opportunity to improve.


Before terminating employment, an employee must offer written notice to the employer and adhere to the notice period.


Employment on a fixed-term basis cannot be terminated.

Notice period

When the employer initiates the termination, there is a notice period. There will be a 14-day notice period for up to one year of employment. There will be a one-month notice period for employees who have worked for one to four years. There will be a two-month notice period for employees who have worked for four to eight years. There will be a four-month notice period for employees who have worked for eight to twelve years. There will be a six-month notice period for employees who have worked for more than 12 years. If the employee is the one who initiates the termination, the notice period will be different. There will be a 14-day notice period for employees who have worked for one to five years. A one-month notice period is required for employees who have worked for more than five years.

Severance pay

There is no statutory provision for severance pay unless the employee's termination is arbitrary or the company chooses to grant it voluntarily.

Probation period

The probation period in Finland usually lasts for six months.

07. Working hours

General

The standard workweek is 40 hours with eight hours per day, and white collar employees work 37.5 hours per week. Regular working hours may be set at an average of 40 hours per week for a period of up to one year. Typically, collective bargaining agreements provide for reduced work hours. However, over a four-month period, the workweek cannot exceed 48 hours.

Overtime

Each overtime period requires the employee's consent. Overtime hours are limited to 138 hours per four-month period and 250 hours per year. If necessary, an additional 80 hours of overtime may be agreed upon. Overtime can be exchanged for vacation time, and employees have the option of refusing overtime.


Overtime increases pay by 150 percent for the first two hours and 200 percent for the remaining hours. Weekly overtime is compensated at 150 percent of the regular rate of pay. Sunday work is compensated at a rate of 200 percent.


Overtime pay varies according to collective bargaining agreements.

08. Minimum wage

General

Compensation laws in Finland do not mandate a minimum wage, but collective agreements may specify minimum salary requirements for specific industries.


Employee bonuses are not required by law, but they are common. A collective bargaining agreement, for example, may include a provision for a holiday bonus of approximately 50% of the pay for that annual holiday. Employers have the option of paying this bonus to employees before or after the holiday.

09. Employee benefits

General

Due to the high quality of health care provided for the public sector, the private health care system only provides about 3-4 percent of care. Supplemental insurance coverage is not required.

Employees in Finland are covered by employment-based benefits insurance. These would include an earnings-related pension, vocational rehabilitation, workplace injury compensation, and occupational illnesses. The earnings-related pensions are administered by the Finnish Centre for Pensions, ETK. Employers are required by law to provide employees with occupational health care services.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Finland

to hire a team takes time, money, and effort. The labor law in

Finland

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Finland

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Finland

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Finland

via our Employer of Record / PEO solution.

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