Ready to add Finnish talent to your team? Loads of other businesses like yours are hoping to do the same. Whether you’re looking to fill difficult job positions, expand your organization’s operational bandwidth, or expand your brand to new territories, Finnish talent can get you there. Finns are very well-educated in the fields of technology and engineering, and they make a fantastic addition to teams in need of reliable problem-solvers.

If this sounds like what you’re looking for, Finnish talent just may be the way to go. But before you jump into the recruiting and hiring processes, be sure to look into the employee benefits in Finland. Doing so will ensure compliance with legal rules and regulations, keeping you and your business out of legal trouble. Plus, Finns tend to be knowledgeable when it comes to the benefits they’re due; they’ll skip over employers with light benefit packages. 

In this employee benefits guide, we’ll share critical information on employee benefits in Finland. We’ll hone in specifically on the mandatory and supplementary benefits required of employers. That way, you can reel in the right candidates and put yourself in line to attain and maintain compliance with legal precedents.

Labor Laws in Finland

In Finland, numerous labor acts govern the relationship between employees and employers. So, if you were looking for a single act to reference for employee benefits, it doesn’t exist. Instead, you’ll want to look at the following to get a full understanding of what’s expected of you as an employer of Finns:

  • Annual Holidays Act – Outlines regulations pertaining to paid annual leave, vacation day minimums, and more.
  • Working Time Act – Provisions about working hours, periods of rest, overtime hours and payments, and more.
  • Employment Contracts Act – The legal framework on employment contracts and how to lawfully create, modify, and terminate them.
  • Collective Agreements Act – Covers collective labor-related agreements (which are drafted between trade unions and employers) on employee rights like wages and working conditions.
  • Wage Guarantee Act – A protective law that helps to guarantee a fair wage for workers in Finland.

It can be helpful to speak with an international lawyer or HR professional with experience in global recruiting for specialized advice pertinent to your company.

Mandatory Employee Benefits in Finland

What you’ll find as you explore Finnish labor law is that employer regulations can be on the stricter side. And if you don’t offer the right benefits and fall out of compliance, you could find yourself in a world of trouble. You can prevent that from happening by becoming educated on the mandatory employee benefits in Finland, which we cover below:

Social Security Insurance

The Finnish social security system helps to support workers in the areas of pension, unemployment, accident, sickness, and life insurance. Both the employer and employee contribute to most of these schemes.

Social Insurance Type Employer Contribution
Pension Insurance 17.38% of the employee’s salary
Unemployment Insurance 0.20% of the employee’s salary (and 0.80% on exceeding compensation)
Accident Insurance 0.54% of the employee’s salary
Sickness Insurance 1.87% of the employee’s salary
Life Insurance 0.06% of the employee’s salary

Pension Insurance

According to Finnish law, employers have to sign their employees up for pension insurance to cover costs incurred in old age, during periods of disability, and more. It’s also on the employer to withhold pension insurance contributions on behalf of the employee and submit them to the pension provider. On average, the employer should be prepared to contribute 17.38% of the employee’s salary. 

Note: Self-employed workers are responsible for submitting their own pension contributions.

Unemployment Insurance

Unemployment insurance kicks in to soften the financial blow of being terminated or otherwise separated from work. Alongside pension insurance, employers are required to enroll and handle contribution payments for their employees’ unemployment insurance. As of the time of this writing, the contribution rate for unemployment insurance is 0.20% of the employee’s compensation throughout the year and 0.80% on the exceeding compensation amount.

Accident Insurance

Should an employee be involved in a work-related incident (sickness, injury, etc.), they should be able to draw from accident insurance benefits. The employer contributes 0.54% of the employee’s salary on average.

Sickness Insurance

When an employee falls ill and cannot work, their sickness insurance comes into play, providing monetary assistance to help them recover. Employers help to fund this plan by contributing 1.87% of the employee’s salary.

Life Insurance

Life insurance is a statutory benefit for employees in Finland. It covers an employee’s loved ones’ financial security in the event that the worker dies. Employers contribute 0.06% to fund this benefit. The employee contributes to social security as well.

Read this resource for more information on worker social security contributions.

Health Insurance

The Finnish Health Insurance Act states that employers have to remit health insurance contributions for workers between the ages of 16 and 67 if they are covered by social security. 

Minimum Wage

Although there’s no universal minimum wage in Finland, employers should know that they’re expected to reference collective agreements to determine how little they can legally pay a Finnish worker. You’ll find that the minimum wage (per collective agreements) tends to vary widely based on the job type and the industry.

Working Hours and Overtime

In general, the maximum working hours for Finnish workers are set at 8 hours per day or 40 hours per week. But there are exceptions to this rule, as working hours may also be based on collective and contractual agreements. It depends on the worker’s job position and industry. 

Maternity and Paternity Benefits

Maternity leave in Finland is relatively generous. Workers get a total of 105 working days of leave, which starts 8 weeks before the baby’s birth. While on leave, the worker can apply for a maternity grant through Kela (the social insurance institution). There’s a set number of requirements a worker must meet prior to receiving payment. 

Paternity leave benefits are lumped together with parental leave. Under parental leave, the mother and father of a child can take a combined 320-day leave (160 working days for each parent). The leave days don’t have to be consecutive, and one of the parents can give the other up to 63 of their leave days.

Learn more about parental leave by reading this Kela resource. 

Annual Paid Vacation

Per the Annual Holiday Act, once a Finnish employee reaches their one-year work anniversary, they are entitled to paid vacation equal to 2.5 days per month. This works out to 25 days every year. 

Those who haven’t yet reached a year of employment get 2 days off per month for annual paid vacation. 

There are many nuances and special circumstances. We recommend reading about them here.

Sick Leave Benefits

When your Finnish employees fall ill, they should be able to take up to 60 working days of leave, provided they submit a medical certificate.

The leave can be lengthened if the worker submits (1) a statement from a medical practitioner confirming that they’re incapacitated or (2) medical certificate B. Sick leave is capped at 300 working days. 

Supplementary Employee Benefits in Finland

Many employers in Finland offer supplementary benefits in addition to the above mandatory benefits. Some do it as a show of appreciation to workers, while others do it to make their open positions more attractive to candidates. Here are a few options to consider:

  • Vouchers that employees can use for meals.
  • A company car to use for work-related (or personal) transportation.
  • Bonuses based on seniority or work performance.
  • Flexibility in working hours or work location.
  • Childcare support via on-site daycare or stipends for outside childcare.
  • Memberships workers can use at local gyms and yoga studios.
  • Private health insurance with extensive benefits for medical, dental, and vision services.
  • Larger contributions to social security insurance accounts than mandated by law.

You are free to choose which supplementary benefits to include in your benefits packages. We recommend researching the people of Finland to find out what makes them tick and which benefits they may find most valuable. The time you’d spend on this step would be worth it because it’s so important to choose benefits that prospective employees will truly connect with.

So, there you have it – the basics of employee benefits in Finland. We hope you found all the information you were looking for in this employee benefits guide, and we wish you the best in your hiring endeavors.