Hiring in Finland? You’re tapping into a highly educated, innovative workforce backed by strong labor protections and a balanced work culture. This guide covers everything you need to know, from employment laws and working customs to how an Employer of Record (EOR) can simplify the process.

How to Hire Employees in Finland

Hiring in Finland is straightforward if you know your options. Whether you’re building a local presence or expanding remotely, there are three main ways to bring Finnish talent onto your team:

Setting Up a Local Entity

This route gives you full control but comes with paperwork, legal costs, and time. It’s best for companies planning long-term operations in Finland.

Working with an Employer of Record (EOR)

Want to hire without the hassle of setting up a company? An EOR handles payroll, contracts, compliance, and taxes, letting you onboard quickly while staying legally sound.

Learn more about Employer of Record services

Hiring Independent Contractors

Ideal for short-term or project-based work. Just be cautious, as misclassifying a contractor as an employee can lead to penalties under Finnish labor laws.

Learn about hiring contractors in Finland

Finland Employer of Record vs Legal Entity in Finland

When expanding into Finland, companies have the option of forming a legal corporation or using an EOR service provider. You should choose an option based on your company’s business objectives, resource availability, and desired level of control.

Creating a legal entity in Finland, such as a limited liability corporation (Osakeyhtiö, Oy), requires several steps. First, the firm must register with the Finnish Trade Register, which involves filing the Articles of Association. This contains essential details such as the company’s name, registered office, and business sector. Once this is completed, companies must register for taxation, which includes corporate tax, VAT, and employer contributions for the employees they hire. Legal entities give companies operational control, allowing them to manage people, make decisions, and execute business strategies on a local level. However, they have significant setup costs, administrative procedures, and lasting compliance responsibilities.

An EOR is an alternative for companies looking for a faster, easier way to enter the Finnish market. An EOR serves as the legal employer, handling all local HR and legal compliance on behalf of the company. This includes managing employment contracts, payroll, tax compliance, and benefits that comply with Finnish labor legislation. The EOR performs various compliance and administrative responsibilities, allowing the company to focus on its main business activities without dealing with the difficulties of forming a full legal entity. While this option simplifies entry and reduces compliance risks, it limits a company’s control over its local operations. However, since the EOR is the formal employer, there may be limitations on how the company handles day-to-day employee relations or enforces certain rules.

Hire in Finland

World-class engineering talent governed by sector-wide collective agreements, TyEL pension insurance, and Finnish employment contract law.

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Using an Employer of Record in Finland

An EOR acts as the official employer on paper, handling everything behind the scenes: contracts, payroll, taxes, benefits, and compliance with Finland’s labor laws. Meanwhile, you stay in charge of the day-to-day work, like managing tasks, performance, and team culture.

It’s a clean, low-risk way to expand into Finland without needing to register a business, hire a local legal team, or navigate endless red tape.

An EOR is especially useful if you:

  • Need to hire employees quickly without setting up a Finnish legal entity
  • Want to test the Finnish market before committing long-term
  • Have one or two team members based in Finland
  • Need help navigating Finnish employment contracts, benefits, and tax rules
  • Want to ensure full compliance with local labor laws without becoming an expert yourself

Whether you’re onboarding one person or building out a whole function, an EOR makes it fast, flexible, and fully compliant.

Things to Know About Finland

  • Finland stands out globally for its commitment to lifelong learning. The country consistently ranks among the top for adult education participation, reflecting a culture that values continuous skill-building. Finnish professionals are especially strong in information processing and problem-solving, making them well-equipped for modern, tech-driven roles.
  • It’s no surprise Finland is often ranked the happiest country on Earth. With generous social support systems, strong civil freedoms, and a high standard of living, employees in Finland enjoy a work-life balance that’s hard to match. For employers, this means happier, healthier, and more engaged team members.
  • There’s a deep respect for innovation woven into Finnish culture. From embracing science and technology to investing in knowledge-based industries, Finland fosters a future-focused mindset. Add to that a workforce known for reliability and strong work ethic, and you’ve got a recipe for success, especially when building a remote team.

How Much Does an Employer of Record Cost in Finland?

The cost of using an Employer of Record in Finland depends on the services needed, the number of employees to be managed, the scope of activities, and the time frame of the partnership.

EOR providers in Finland often charge either a flat monthly fee (varying from €600 to €2500) or a percentage of each employee’s monthly income (generally between 12% and 20%). Onboarding fees are also common, however they might vary. To obtain an accurate estimate, request a customized quote directly from the EOR provider.

Employment and Labor Laws in Finland

If you’re planning to hire in Finland, understanding the local labor laws is essential. From contracts and onboarding to working hours and overtime, Finnish employment regulations are designed to protect workers while keeping business practices clear and fair. Staying compliant means smoother operations, fewer surprises, and happier employees.

Employment Contract Requirements

In Finland, employment contracts can be verbal, electronic, or written, but written agreements are highly recommended. A clear, documented contract helps both employer and employee understand their rights and responsibilities from day one.

Here’s what every solid Finnish employment contract should include:

  • Names and details of both the employer and employee
  • Start date and, if applicable, the end date for fixed-term roles
  • Work location(s)
  • Job title and key responsibilities
  • Salary and benefits
  • Standard working hours
  • Vacation and leave entitlements
  • Notice period for termination
  • Length of probation, if applicable
  • Relevant collective bargaining agreements
  • Terms for any international assignments

Onboarding Process

Hiring in Finland can move quickly if you’ve got the right setup. Once all the required documents are submitted and any necessary local registrations are complete, employees can often be onboarded in just 1–2 business days.

For international hires, a Right to Work check may add a few more days, especially if follow-up documents are needed.

Be aware: payroll cut-off dates, like the 10th of each month, can influence official start dates, so timing is key.

Working Hours

A standard full-time workweek in Finland typically ranges from 37.5 to 40 hours, depending on the role and any applicable collective agreements. Flexible schedules are becoming more common, but employers must still follow national working time rules.

Overtime

Overtime is allowed, but only with the employee’s consent each time it’s required. Weekly working hours should not exceed 48 hours, including any overtime.

Here’s how overtime pay breaks down:

Overtime ConditionPay Rate
First 2 overtime hours in a day150% of regular pay
Additional overtime hours on the same day200% of regular pay

Fairness and transparency are key, both in asking for extra hours and compensating for them.

Probation Period

Probationary periods are common in Finnish employment contracts, giving both parties time to assess fit. These trial periods can last up to six months, but not longer. During this time, either side can end the contract with a shorter notice period, making it a safe way to ease into a working relationship.

How an Employer of Record Helps You Hire in Finland

Expanding into Finland is an exciting move, but let’s be real… the legal landscape can be tricky. From labor laws to payroll rules, one wrong step can lead to fines, misclassification issues, or a full-blown compliance mess.

That’s where an Employer of Record (EOR) becomes your safety net.

An EOR acts as the official employer on paper, taking over the heavy lifting – things like employment contracts, tax filings, local benefits, and legal compliance – so you don’t have to. You still run the show when it comes to managing your people and driving results, but the EOR handles the bureaucracy behind the scenes.

It’s a smart, low-risk way to hire in Finland without setting up a local entity or learning the ins and outs of Finnish labor code overnight. Whether you’re hiring one remote employee or assembling an entire department, an EOR lets you scale on your terms, without the paperwork pile-up, legal guesswork, or stretching your internal resources too thin.

Payroll and Employment Taxes in Finland

Handling payroll in Finland means staying aligned with a few key norms. Some are official, while others are cultural. Here’s what you need to know to keep things smooth and compliant.

Fiscal Year

Finland’s fiscal year follows the calendar year (1 January – 31 December). Employer tax returns must be filed monthly via the Incomes Register (tulorekisteri). Year-end filings and adjustments are due by the end of February following the fiscal year.

Payroll Cycle

Employees are typically paid once per month, with the payment date specified in the employment contract or collective agreement. Common pay dates include the 15th or last business day of the month. Employers must provide itemised payslips showing gross pay, deductions, and net pay.

Minimum Wage

Finland has no statutory national minimum wage. Instead, minimum pay levels are set through sector-specific collective bargaining agreements (in Finnish: yleissitova työehtosopimus), which cover approximately 90% of the workforce. Where a binding collective agreement applies to an industry, employers must observe its minimum pay thresholds — these are not optional.

For sectors without a collective agreement, employers and employees can agree on wages freely, though Finnish law still requires that pay be reasonable and in line with what others doing comparable work receive. Before setting salaries, employers should confirm which collective agreement, if any, governs their industry.

Employer Tax Contributions

Employer payroll contributions in Finland typically add around 20–22% on top of gross salary, though the exact figure depends on the sector, job risk classification, and applicable collective agreements.
Contribution Type Employer Rate (2025) Notes
Health Insurance (TyEL) 1.87% Increases to 1.91% in 2026
Pension Insurance (TyEL) 17.38% (average) Varies by company size and industry; decreases to 17.10% in 2026
Unemployment Insurance 0.20% up to €2,455,000 payroll; 0.80% beyond Increases to 0.31%/1.23% in 2026 with new threshold of €2,509,500
Accident Insurance Varies by job risk Paid to private insurer; invoice sent directly by insurance company
Group Life Insurance Varies by collective agreement Collected together with accident insurance where applicable

Employee Payroll Contributions

Total employee deductions typically range from approximately 9.65% to 11.15% in 2025 depending on age and income level, rising slightly in 2026 as contribution rates are adjusted.

Contribution TypeEmployee Rate (2025)Notes
Pension Insurance (TyEL)7.15% (under 53 or over 62); 8.65% (ages 53–62)Both rates change to 7.30% in 2026
Health Insurance1.06% (healthcare contribution) + 0.84% (daily allowance)Daily allowance contribution is 0% for income below €16,862; increases to 1.10% + 0.88% in 2026
Unemployment Insurance0.59%Increases to 0.89% in 2026

Individual Income Tax Contributions

Finland uses a progressive national income tax system on earned income, with municipal tax, church tax, and a health insurance contribution applied on top. Employers withhold tax at source based on each employee’s personal tax card issued by the Finnish Tax Administration (Verohallinto). The tax year runs from 1 January to 31 December.
Annual Taxable Income (EUR) Tax at Lower Limit (EUR) Rate on Excess
0 – 22,000 0.00 12.64%
22,001 – 32,600 2,780.80 19.00%
32,601 – 40,100 4,794.80 30.25%
40,101 – 52,100 7,063.55 33.25%
52,101 – 150,000 11,053.55 37.50%
Above 150,000 48,943.68 44.25%

In addition to national tax, employees pay a flat municipal tax ranging from 5% to 11% depending on their municipality, church tax of 1%–2% for registered members, and a health insurance contribution of 1%–2%. Combined, these additional charges bring the total tax burden to between 8% and 15% on top of the national rate.

Non-resident individuals are taxed at a flat 35% on Finnish-sourced wages, with a deduction of €17 per day applied before the rate is calculated. Capital income — such as investment returns — is taxed separately at 30%, rising to 34% on amounts exceeding €30,000.

Pension System

Finland’s pension system is built on the Earnings-Related Pension Scheme (TyEL), which is mandatory for most employees. The employer arranges and pays the insurance, with a portion deducted from the employee’s salary. Beyond retirement, TyEL also covers disability and survivors’ benefits, making it a core part of Finland’s social protection framework. The Finnish Centre for Pensions (ETK) serves as the central body overseeing the statutory earnings-related pension system and is the authoritative source for pension guidance and data.

The retirement age in Finland varies by birth year and has been gradually rising. For those born in 1960, the retirement age is 64 years and 6 months; for 1961, it’s 64 years and 9 months. Those born in 1962 or later have a target retirement age of 65. For birth years from 1965 onward, the retirement age will be tied to life expectancy as of 2030, meaning it may continue to rise as longevity increases. Employees can also choose to draw a partial pension (25% or 50%) from age 61, though early withdrawal comes with a permanent monthly reduction.

Bonus Payments

While not legally required, it’s common practice in Finland to offer a 13th-month salary, especially around the holidays. Often paid just before an employee’s vacation, this bonus is seen as a goodwill gesture and an expected part of compensation in many sectors.

How an EOR Helps You Run Payroll in Finland

In Finland, payroll isn’t just about cutting a check; it’s about accuracy, timeliness, and staying on the right side of tax and labor laws. Employees expect clarity and consistency, and any slip-ups can quickly erode trust.

That’s where an Employer of Record (EOR) becomes your payroll powerhouse. By managing every detail behind the scenes, an EOR ensures your team in Finland gets paid correctly, on time, and in full compliance with local regulations every single month.

Here’s how an EOR simplifies payroll in Finland:

  • On-Time, Local Payments: Salaries are processed promptly and delivered in euros, with no hiccups or currency issues.
  • Compliant Payslips & Reporting: Employees receive clear, legally compliant payslips and documentation that meet Finnish standards.
  • Accurate Tax Withholding & Contributions: From income tax to social security and pension payments, all mandatory deductions are calculated and submitted correctly.
  • Bonus & Benefit Integration: Any changes to compensation, such as holiday bonuses or benefit adjustments, are factored in automatically.
  • Peace of Mind for Everyone: Employees feel secure and you avoid compliance risks. Everyone wins.

With an EOR running your payroll in Finland, you can focus on growing your team without worrying about spreadsheets, tax codes, or missed deadlines.

Work Permits and Visas in Finland

If you’re hiring talent from outside the EU or EEA, you’ll need to navigate Finland’s work permit and visa process. Fortunately, Finland offers a well-structured, streamlined system, especially for skilled professionals.

  • Residence Permit for an Employed Person (TTOL): For workers with a confirmed job offer in Finland. This permit is tied to a specific role and employer.
  • Specialist Permit: For highly skilled professionals, particularly in IT, engineering, and finance. Processing times are faster, usually around two weeks.
  • EU Blue Card: A residence permit for non-EU citizens with high qualifications and a job offer that meets salary thresholds.
  • Startup Permit: For non-EU entrepreneurs looking to build innovative businesses in Finland.
  • Seasonal Work Permits: For short-term jobs in agriculture, tourism, or similar industries.

You’ll need to issue a formal job offer, ensure the salary meets applicable legal thresholds, and submit the required documents to the Finnish Immigration Service (Migri).

Processing times vary — standard permits typically take 1 to 4 months, while specialist fast-track permits are processed in approximately 2 weeks. Finland also offers a D-visa option that allows the employee to enter the country before their residence permit is finalised, which can help avoid delays in start dates. Since 2024, Finland has been issuing digital residence permits.

An Employer of Record can manage the entire process, from documentation to compliance, so your international hires can get started without unnecessary delays.

Time Off and Leave in Finland

In Finland, time off is encouraged and protected by law. The country places a strong emphasis on work-life balance, and employee leave policies reflect that cultural value.

Mandatory Leave Entitlements

Employees in Finland accrue annual leave based on their length of employment. During the first year, leave accrues at 2 days per qualifying month, up to 24 days. From the second year onward, this increases to 2.5 days per qualifying month, up to 30 days.

It’s worth noting that under Finnish law, Saturdays count as leave days. The leave accrual year runs from 1 April to 31 March, with leave typically taken during the following summer holiday season.

Public Holidays

Finland observes 13 public holidays, including Christmas, Easter, Midsummer, and Independence Day. If a public holiday falls on a weekday, employees usually get the day off with pay.

  • New Year’s Day (1 January)
  • Epiphany (6 January)
  • Good Friday (March/April, day varies)
  • Easter (March/April, day varies)
  • Pentecost (day varies)
  • Easter Monday (March/April, day varies)
  • Vappu / May Day (1 May)
  • Ascension Day (April–June, Thursday, 40 days after Easter)
  • Midsummer Eve (June, day varies)
  • Midsummer Day (June, day varies)
  • All Saints Day (day varies)
  • Independence Day (6 December)
  • Christmas Day (25 December)
  • Boxing Day (26 December)

Sick Leave

Employees receive sick pay from the first day of illness. The employer pays for the first 10 working days (1+9 waiting day model). After this, Kela (the Social Insurance Institution) pays sickness allowance for up to approximately 300 working days.

A medical certificate is typically required from day 1 or 2, depending on the employer’s policy.

Maternity Leave

In Finland, maternity leave – called pregnancy leave – lasts for 40 working days and typically begins 14 to 30 working days before the due date. During this time, the birthing parent receives a pregnancy allowance based on their income. After this period, they transition into parental leave, where each parent is entitled to 160 working days of paid leave, with the option to transfer up to 63 days to the other parent.

If the work environment poses health risks that can’t be adjusted, the employee may also qualify for special maternity leave. These policies highlight Finland’s strong support for families and commitment to work-life balance.

Parental Leave

Finland overhauled its parental leave system on 1 August 2022, replacing the previous maternity and paternity leave structure with a gender-neutral parental allowance model. Each parent is now entitled to 160 working days of paid parental leave per child, totalling 320 days per family. The allowance is paid by Kela, Finland’s Social Insurance Institution, and is based on the parent’s annual income.

Parents have considerable flexibility in how they use their days — leave can be taken in periods or individual days, and doesn’t need to be used consecutively. The only requirement is that all days are used before the child turns two. Up to 63 days can also be transferred to the other parent, allowing families to arrange leave in a way that suits them. In single-parent families, the full 320 days are available to one parent, with up to 126 days transferable to another caregiver.

For employers, it’s worth noting that parental allowance is paid directly by Kela rather than by the employer — though many employers choose to top up the benefit as part of their employment terms.

Using an Employer of Record to Administer Benefits in Finland

In Finland, employee benefits are a legal obligation. Overlooking even one detail can lead to penalties and quickly damage your credibility as an employer. That’s why many international companies rely on an Employer of Record (EOR) to get it right from day one.

An EOR takes full responsibility for administering statutory benefits, including health insurance, pensions, paid leave, and more. They ensure everything is properly set up during onboarding, adjusted if an employee’s role or status changes, and kept fully compliant with Finnish regulations.

But it’s not just about ticking legal boxes. A well-run benefits program shows your team you care. An EOR also handles employee communication, so your team always knows what they’re entitled to and how to use it. No confusion. No gaps.

In short, with an EOR managing your benefits in Finland, you don’t just stay compliant; you give your employees a sense of security and support that strengthens trust and retention.

Terminations and Severance in Finland

Ending an employment relationship in Finland must be handled with care, fairness, and strict adherence to labor laws. Unlike some countries, Finland doesn’t support at-will termination; there must always be a valid reason.

Termination Process

Employers can terminate employment for “proper and weighty reason” (asiallinen ja painava syy) under the Employment Contracts Act. Summary dismissal for “extremely weighty reason” (erittain painava syy) is reserved for cases of serious misconduct. The threshold for termination is higher than in many other countries.

Notice Periods

Notice periods in Finland vary based on the length of employment and whether the termination is initiated by the employer or the employee:

Employee-initiated resignation

Length of Employment Notice Period
Less than 5 years 14 days
5 years or more 1 month

Employer-initiated termination

Length of EmploymentNotice Period
Less than 1 year14 days
1–4 years1 month
4–8 years2 months
8–12 years4 months
Over 12 years6 months

Severance Pay

There is no statutory severance pay in Finland. However, employees are entitled to full pay and benefits throughout the notice period. Additional severance may be negotiated in employment contracts or collective agreements.

Employers are also expected to assist with re-employment efforts in redundancy cases, especially for long-term employees.

Expand into Finland Easily with Remote People’s Employer of Record in Finland

Hiring in Finland opens the door to a highly educated, tech-savvy workforce and a work culture that values fairness, balance, and innovation. But navigating the legal landscape, payroll requirements, and employee benefits can be complex, especially if you’re new to the region.

That’s where an Employer of Record can make all the difference. With the right EOR partner, you can hire confidently, stay compliant, and offer a world-class employee experience, without setting up a local entity or getting buried in bureaucracy.

Whether you’re building a remote team or testing the Finnish market, we’re here to help you grow smarter. Let’s make your hiring journey in Finland seamless, compliant, and built to last.

Frequently Asked Questions

If your industry is covered by a binding collective agreement (yleissitova työehtosopimus), the minimum pay thresholds set in that agreement are legally enforceable — you cannot offer less, even if the candidate agrees to it. This means salary benchmarking in Finland isn't just a best practice, it's a compliance requirement in most sectors. An EOR familiar with Finnish CBAs can help you get this right from the start.

Employees who leave Finland after accruing pension entitlements under TyEL retain their accrued pension rights. They can claim their Finnish earnings-related pension at retirement age regardless of where they live at the time. For employees from EU/EEA countries, coordination rules apply to avoid double contributions. Non-EU employees should check whether a social security agreement exists between Finland and their home country.

During probation, either party can terminate the employment relationship with shorter notice and without needing to provide the same level of justification required after the probation period ends. That said, termination still cannot be discriminatory or in bad faith. Once probation is complete, Finnish law requires a proper and weighty reason for dismissal, and the full notice period applies.

Yes. Non-cash benefits such as company cars, employer-provided housing, meal vouchers, and phone allowances are treated as taxable income in Finland and must be reported to the Finnish Tax Administration. The taxable value of common fringe benefits is standardized annually by the tax authorities, so the amount added to the employee's taxable income is predetermined rather than based on actual cost.

Finnish law requires employers to arrange occupational health services for all employees, regardless of company size. At minimum, this must cover preventive occupational healthcare — assessing workplace health risks and supporting employee wellbeing. Many employers go beyond the minimum and include general medical care, which is also eligible for a partial reimbursement from Kela. This is both a legal obligation and an expectation employees have when joining a Finnish employer.