An Employer of Record (EOR) in Finland is a company that takes on the responsibility of being the legal employer for a worker. This includes managing payroll, benefits, and other employment-related tasks on behalf of the worker's actual employer.
Discover the key considerations and essential details you should be aware of before opting for an Employer of Record (EOR) in Finland.
| Overview | |
| Continent | Europe |
| Country | Finland |
| Capital | Helsinki |
| Time zone | UTC+02:00 (EET) |
| Total Time zones | 1 |
| Working hours per week | 38 |
| Working week | Monday–Friday |
| Typical hours worked | 7.6 |
| Personal Tax filing deadline | For individuals, tax filing deadlines come in waves throughout the following spring. Mark your calendar for the first deadline in early April, followed by three more in May. |
| Financial Year | 1st January to 31st December |
| Date format | dd/mm/yyyy |
| Currency | Euro (EUR) |
| VAT | The standard rate is 24% |
Employment Contracts in Finland
Employment contracts in Finland can be verbal, in writing or digitally. Employers are required to provide a written statement in absence of employment contract. It is mandatory to provide the ‘principal terms of work’ either in employment contract or in written statement within 7 days of start date or a maximum of 30 days. Failing to provide a written statement is a violation that can result in penalties. Employers are required to comply with legal provisions such as Finnish Employment Contracts Act, Working Hours Act, and Annual Holidays Act.
Employers who are not part of any employer's organization still need to adhere to the terms and conditions of employment outlined in the collective bargaining agreements of their respective industry.
Principal terms of work
The following information is to be provided within 7 days of the start date.
- Employer and employee information
- Form and duration of employment contract
- Trial period
- Place of work
- Work tasks
- Pay
- Working hours
The balance information can be provided within 30 days of the start date. Learn more about the complete information to be provided in principal terms of work here.
Here is the sample employment contract in Finland recommended by Tyosuojelu, a website of the Occupational Safety and Health Administration in Finland.
The standard types of employment contracts are fixed or indefinite. Contracts can be fixed if there are valid reasons, such as substitution, a project of fixed duration, seasonal work, and more. There is no obligation for fixed-term contracts with a duration of less than a year. Fixed-term contracts, each with a duration of one year, can be renewed consecutively only twice.
Minimum Wages
The salary is set according to the collective agreements in each sector, and the Employment Contracts Act does not include provisions on minimum wages.
Payroll in Finland
In Finland, payroll is typically processed monthly or for every two weeks. Salaries are paid in Euros on the 15th or the last day of the month.
Probation Period
The maximum allowed probation period is six months. Employers can extend the notice period if an employee is on sick or family leave and the employee is to be notified.
Notice Period
The notice period in Finland increases based on the duration of employment.
Employment Notice Periods
| Employment Duration | Notice Period |
|---|---|
| Up to 1 year | 14 days |
| More than 1 year up to 4 years | 1 month |
| More than 4 years up to 8 years | 2 months |
| More than 8 years up to 12 years | 4 months |
| More than 12 years | 6 months |
Working Hours
The standard working hours in Finland is 37.5 per week and 7.5 hours per day. Working hours cannot exceed 8 per day and 40 per week as per the Working Hours Act.
Additional Work and Overtime
Additional work is the work performed between the agreed working hours and the maximum allowed working hours in the Finnish Working Hours Act. Overtime is the work performed beyond the maximum allowed working hours. Both additional work and overtime requires initiation and approval from the employer. Likewise, the employer is obligated to secure the employee's consent before assigning additional or overtime tasks.
Overtime is calculated based on whether it's daily or weekly overtime and the total hours worked. Here's a summary:
Daily Overtime:
For the first two hours of daily overtime, a 50% increase on the regular wage is applicable. Any subsequent hours of daily overtime require a 100% increase on the regular wage.
Weekly Overtime:
Weekly overtime, separate from daily overtime, involves a 50% increase on the regular wage.
Period-Based Work Overtime:
For a two-week period with a maximum of 80 regular hours, a 50% increase applies to the first 12 hours of overtime, and subsequent hours have a 100% increase.
In a three-week period with a maximum of 120 regular hours, a 50% increase applies to the first 18 hours of overtime, and subsequent hours have a 100% increase.
13th Month Salary
While there is no legal obligation to provide a 13th or 14th month salary, it is a common practice to offer holiday bonuses. These bonuses typically amount to 50% of the holiday pay when disbursed.
Social Security in Finland
Kela, short for Kansaneläkelaitos in Finnish, is the Social Insurance Institution of Finland. It is a government agency that operates under the Finnish Ministry of Social Affairs and Health. Kela plays a crucial role in administering various social security programs and benefits in Finland.
Eläketurvakeskus (ETK), translated as the Finnish Centre for Pensions, is a central authority in Finland responsible for overseeing and managing the statutory earnings-related pension system. It plays a pivotal role in the administration and coordination of pensions for wage and salary earners, self-employed individuals, and recipients of daily allowance.
Finnish statutory earnings-related pensions, as well as the workers’ compensation insurance and the employees’ group life insurance, are managed by private pension insurers authorized by ETK.
The Incomes Register in Finland is a national database that collects comprehensive information on individuals' income-related data. All employers are required to submit the payment records of the employees.
Finland’s statutory social Insurance contributions includes the following:
- Pension Insurance
- Workers’ Compensation
- Group Life Insurance
- Unemployment Insurance
- Social and Health Insurance
Pension Contributions in Finland
| Contribution Type | Employer's Share | Employee's Share | Total Contribution Rate |
|---|---|---|---|
| Pension (Age under 53 or over 62) | 17.4% | 7.15% | 24.55% |
| Pension (Age 53–62) | 17.4% | 8.65% | 26.05% |
In 2023, the overall average contribution rate is 25.30% of the employee’s monthly gross wage. The employee's share is withheld by the employer during wage disbursement. It is essential to note the age-based distinctions in employee contribution rates, emphasizing the collaborative effort between employers and employees in securing a stable pension fund.
Workers' Compensation and Group Life Insurance Contributions in Finland
| Contribution Type | Employer's Share | Average Contribution Rate |
|---|---|---|
| Workers' Compensation Insurance | Varies (2023: 0.70% of the wage sum) | 0.70% |
| Group Life Insurance | 0.06% of the employer's wage sum | 0.06% |
The employer pays the entire share of workers' compensation insurance, which, in 2023, averages 0.70% of the wage sum. Additionally, employers usually contribute to employees' group life insurance, with an average rate of 0.06% of the employer's wage sum, covering the full amount. These contributions ensure financial protection and support for employees in case of work-related injuries or life-threatening situations.
Unemployment Insurance Contributions in Finland
| Contribution Type | Employer's Share (2023) | Employee's Share (2023) |
|---|---|---|
| Unemployment Insurance | 0.52% or 2.06% (depending on total wage sum) | 1.50% of the wage |
The employer's contribution to unemployment insurance in 2023 varies, being either 0.52% or 2.06%, contingent on the size of the total wage sum. Simultaneously, the employee's share is fixed at 1.50% of their gross monthly wage, as per the Tax Prepayment Act. The employer deducts the employee's share from their gross monthly wage, ensuring compliance with unemployment insurance regulations.
Social Security and Sickness Insurance Contributions in Finland
| Contribution Type | Employer's Share | Employee's Share |
|---|---|---|
| Social Security (Health Insurance) | 1.53% of the wage | 1.96% of the monthly gross wage (including medical care and daily allowance) |
The employer is required to contribute 1.53% of the wage towards social security, specifically for health insurance. Simultaneously, the employee's share, encompassing health insurance, medical care, and daily allowance, stands at 1.96% of their monthly gross wage. These contributions are remitted to the tax authorities, ensuring coverage under the Health Insurance Act.
Social Security Contribution Rates for 2023:
| Contribution Type | Employer Rate | Employee Rate |
|---|---|---|
| Pension Insurance | Variable (avg. 17.39%) | 7.15% to 8.65% based on age |
| Unemployment Insurance | Variable | 1.50% (age 18 and above) |
| Accident Insurance | Avg. 0.57% | - |
| Group Life | 0.06% | - |
| Sickness Insurance | 1.53% | 1.96% (incl. Medicare and Daily Allowance) |
Personal Income Tax in Finland
Personal Income Tax Rates for Resident Individuals (2023):
| Over (EUR) | Not over (EUR) | Tax on column 1 (EUR) | Tax on excess (%) |
|---|---|---|---|
| 0 | 19,900 | 0 | 12.64 |
| 19,900 | 29,700 | 2,515 | 19.00 |
| 29,700 | 49,000 | 4,377 | 30.25 |
| 49,000 | 85,800 | 10,215 | 34.00 |
| 85,800 | - | 22,727 | 44.00 |
Capital (investment) income is taxed at rates of 30% and 34% (applies when annual taxable capital income exceeds EUR 30,000).
Local Income Taxes:
- Municipal tax ranges from 4.36% to 10.86%, with an average rate of 7.40%.
- Church tax, applicable to certain denominations, varies from 1% to 2.10%.
- Public broadcasting tax is 2.5% on income over EUR 14,000, capped at EUR 163.
Foreign Expert Tax Regime:
- Flat tax rate of 32% on Finnish-source salary income for eligible foreign employees.
- Applicable for a maximum of 48 months from the start of work in Finland.
- Conditions include a monthly salary of at least EUR 5,800 and not being a Finnish resident in the last five years.
Personal Income Tax Rates for Non-Resident Individuals:
- Taxed on Finnish-source income only.
- Tax rates: 35% on employment income, 30% on dividends, interest, and royalties.
- No itemized deductions allowed against the mentioned income.
- Fixed tax at source can be replaced with progressive taxation for certain non-residents.
Employee Benefits in Finland
Holidays in Finland:
| Date | Holiday |
|---|---|
| 1st January | New Year’s Day |
| 6th January | Epiphany (13th Day of Christmas) |
| 2nd April | Good Friday |
| 5th April | Second Easter Day |
| 1st May | May Day |
| 13th May | Ascension Day (30 days after Easter Sunday) |
| 25th June | Midsummer Eve |
| 26th June | Midsummer Day |
| 6th November | All Saint’s Day (Saturday between 31st October and 6th November) |
| 6th December | Independence Day |
| 24th December | Christmas Eve |
| 25th December | Christmas Day |
| 26th December | Second Day of Christmas |
Paid Time Off - Work-Life Balance Blooms in Finland: A Guide to Leaves That Let You Live
In Finland, work-life balance isn't just a buzzword, it's a way of life. Generous leave policies ensure that employees have ample time to recharge, nurture family bonds, and tend to personal needs.
Vacation Time Is Sacred
- Summertime Bliss: Enjoy four uninterrupted weeks of summer vacation to explore Finland's stunning nature or relax under the midnight sun.
- Winter Wonderland: Rejuvenate with a week-long winter holiday, perfect for cozy fireplaces, snowy adventures, or chasing the Northern Lights.
Parental Leaves for Shared Joy
- Parental Leave for All: 158 paid weekdays of shared parental leave for both parents to bond with their little one.
- Dads Get Dedicated Days: Fathers can take an additional paternity leave of up to 54 weekdays.
- Flexibility for Family: Choose full-time or part-time parental leave for a balance that suits your family.
Caring for Loved Ones, Uninterrupted
- Childcare Leave: Available until children reach school age or for adopted children within the first two years.
- Temporary Childcare Leave: 1-4 workdays of leave to care for sick children under 10.
- Family Care Leave: Time off to support loved ones facing illness or accidents.
Well-Being Takes Priority
- Rest and Recharge: 10 days of paid sick leave from employers, followed by sickness allowance from KELA.
Leave Your Worries Behind
- Financial Security: Paid time off with income protection through employer contributions and social security benefits.
- Job Security: Your position awaits your return, allowing you to focus on what matters most.
In Finland, work and life aren't competing forces, they're harmonious partners. Embrace a fulfilling career and a vibrant personal life, all made possible by a culture that values well-being, family, and personal growth.
Finland Employment Visas
Finland, the land of a thousand lakes and endless forests, beckons professionals with its dynamic economy, stunning landscapes, and commitment to well-being. If you're dreaming of working in this Nordic haven, obtaining an employment visa is your first step. Buckle up, as we navigate the visa landscape together!
Types of Visas for the Aspiring Finn:
- Residence Permit for an Employed Person: This is your go-to visa if you've secured that coveted job offer. It can be temporary (B) for specific contracts or continuous (A) for long-term positions.
- Residence Permit for Entrepreneurs: Unleash your inner innovator! This visa lets you establish your own business and contribute to Finland's thriving entrepreneurial ecosystem.
- Residence Permit for Specialists: Are you a whiz in science, technology, or medicine? This visa recognizes your expertise and opens doors to specialized roles in your field.
- EU Blue Card: Fast-track your Finnish journey if you're a highly skilled non-EU citizen with relevant qualifications and work experience. This prestigious visa grants quicker processing times and additional benefits.
Earning Your Finnish Entry Ticket: Eligibility Requirements
- Valid Passport: Your gateway to Finnish adventures!
- Employment Contract: Proof of that dream job you landed.
- Financial Means: Show you can support yourself during your Finnish stay.
- Medical Insurance: Ensure you're covered for any health eventualities.
- Clean Criminal Record: Demonstrate your upstanding character.
Engaging an Employer of Record (EOR) in Finland stands as a strategic choice for companies navigating the complexities of global expansion. The EOR assumes a pivotal role in ensuring seamless adherence to Finnish employment regulations, alleviating the burden of administrative intricacies, and fostering a compliant and efficient workforce. By partnering with an EOR, businesses gain a robust framework to navigate Finland's nuanced labor landscape, from meticulous payroll processing to meticulous tax compliance. This collaborative alliance not only streamlines international employment procedures but also allows companies to concentrate on their core objectives and growth strategies. In a nation known for its strict employment regulations, an EOR in Finland serves as a reliable ally, enabling businesses to extend their global footprint with confidence and in full compliance with local laws.
Northern Europe: EOR Denmark | EOR Finland | EOR Iceland | EOR Norway | EOR Sweden