Hire in Finland
Finland PEO &
Employer of Record
Hire & manage teams remotely in Finland without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Hire Employees in Finland
The NNRoad Advantage ☺
Pay as you go
Global account manager
Employer of Record in Finland
Compliance & Payroll
Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.
Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).
On-boarding and off-boarding employees following labor law practice.
Complete payroll solution and benefit administration
Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.
Payment management (Invoicing customers/clients and vendor payments).
Work VISA application assistance, if needed.
Local individual income tax reporting.
Payroll & PEO in Finland
Compliance & Payroll
Registering the necessary company and personnel information for payroll calculation in the payroll software and system
Monthly Payroll Processing
Year-End Adjustment and Annual Declaration
Taxes & Payroll in Finland
Employee Income Taxes:
Finland taxes residents on their worldwide income. Earned income received by residents is taxed at progressive tax rates for national tax purposes and at a flat tax rate for municipal (and church and social security) tax purposes.
6%: 19,200 to 28,700 EUR
17.25%: 28,700 to 47,300 EUR
21.25%: 47,300 to 82,900 EUR
31.25%: Over 82,900 EUR
0% * 19,200 = 0
6% * 9,500 = 570
17.25% * 18,600 = 3,208.50
21.25% * 2,700 = 573.75
0+570+3208.50+573.75 = 4352.25
Yearly income tax = 4,352.25 EUR
Employer Costs in Finland
|Pension insurance (TyEL)||17.40% (average rate)|
|Unemployment insurance||0.50% if paid wages no more than €2,197,500 a year
2.05% if paid wages go over €2,197,500 a year
|Occupational accident and disease insurance||This varies by company and line of business|
|Group life insurance||This varies by company and line of business|
|Pension insurance (TyEL)||7.15% (worker’s ages 17 to 52)
8.65% (worker’s ages 17 to 52)
7.15% (worker’s ages 63 to 67)
|Medical care coverage||0.53% (for employees and self-employed persons)
1.50% (for beneficiaries – pension and benefit income)
|Daily allowance||1.18% (employees and self-employed persons insured under MYEL Act)
1.32% (elf-employed persons insured under YEL Act. other self-employed persons)
Benefits & Insurance in Finland
Pension insurance provides a secure income against various long-term risks. The national pension covers all people residing in Finland if they meet the minimum requirements relating to time of residence. Earnings-related pensions cover people with earned income.
Pension accrues for work carried out between the ages of 17 and 67. For the self-employed, pension benefits accrue as of age 18. The pension is calculated based on the person’s earnings for each year and an age-specific accrual rate. Pension also accrues based on certain unsalaried periods, such as periods of unemployment or study.
Employers must pay health insurance contributions for 16 to 67 year old employees who are covered by the Finnish social insurance system in accordance with the Health Insurance Act. Even if no tax can be withheld, the employer’s health insurance payment must be paid. This could be the case if wages are paid in the form of fringe benefits rather than cash, or if the employee’s tax card indicates that no tax should be withheld.
If the total amount of salaries paid to employees throughout the calendar year exceeds €1,300, the employer must pay an unemployment insurance contribution. Employees aged 17 to 64 pay an unemployment insurance contribution. Unemployment insurance contributions must also be paid by employees.
Occupational Accident And Disease Insurance
If the entire amount of salaries paid in a calendar year exceeds €1,300, employers must provide insurance coverage against occupational accidents and diseases to their employees. As soon as the job starts, the insurance must be in place. The contribution to accident insurance varies by line of business and corporation.
Group Life Insurance
If your collective labor agreement requires it, you may also be required to purchase group insurance coverage for your employees.
Working Hours in Finland
Working Hours Per Week
Regular working hours for employees covered under a general working time arrangement cannot exceed eight hours per day or 40 hours per week. Regular working hours for employees might also be adjusted and have more flexible hours. Flexible working hours allow employees to set their own start and end times for their workdays, within specific parameters. Flexible working hours must always be agreed upon in writing between the employer and the employee.
In general, maximum overtime limitations are 138 hours in four months and 250 hours in a year. Overtime hours are paid at 150.00% of regular salary for the first two hours and 200.00% for each additional hour. On a weekend/rest day/Sunday, any overtime work is compensated at 200% of the regular wage rate of pay.
Termination Laws in Finland
An employment relationship may end due to the expiration of its defined term, dismissal, cancellation, or being declared canceled under certain circumstances. When legal grounds for termination exist, both the employer and the employee may terminate the employment relationship.
An employment contract that is indefinitely valid can be ended by giving notice to terminate. The employee is not needed to provide any specific reasons for termination, but the notice period must be followed. The employer, on the other hand, is prohibited from terminating an employment relationship without good reason.
The following are acceptable as such a reason:
The period of notice depends on the length of the employment and it is different for employer and employee.
|Length of employment||Period of notice|
|Up to 1 year||14 days|
|1 to 4 years||1 month|
|4 to 8 years||2 months|
|8 to 12 years||4 months|
|12+ years||6 months|
When the contract is terminated by the employee:
|Length of employment||Period of notice|
|Up to 5 years||14 days|
|5+ years||1 month|
Employment Contract in Finland
A contract for work might be oral, written, or electronic.
Unless it was formed for a specific fixed duration for a good cause, an employment contract is valid indefinitely. Contracts created on the employer’s initiative for a defined term with no justification shall be considered valid indefinitely.
When the volume or total duration of fixed-term contracts, or the totality of such contracts, suggests a permanent need for labor, it is unlawful to utilize consecutive fixed-term contracts.
The minimum information that an employment contract should have is:
The domicile or business location of the employer and the employee
The date of commencement of the work
The date or estimated date of termination of a fixed-term contract and the justification for specifying a fixed term, or notification that the contract is a fixed-term employment contract with a long-term unemployed person
The trial period
The place where the work is to be performed or, if the employee has no primary fixed workplace, an explanation of the principles according to which the employee will work in various work locations
The employee’s principal duties
The collective agreement applicable to the work
The grounds for the determination of pay and other remuneration, and the pay period
The working hours to be observed; for variable working hours agreed at the employer’s initiative, documentation must also be submitted indicating the circumstances in which and the extent to which the employer will have a need for labour
Starting from the beginning of work, the employer and the employee may agree on a probation period of up to six months. In a fixed-term work relationship, the trial period, including any extensions, may not exceed half of the employment contract’s duration, and in any case, may not exceed six months.
Types of Leaves in Finland
Vacation is normally taken between May 2 and September 30. Annual leave is calculated from April 1 to March 31. Employees are entitled to two vacation days per month (or 2.5 days per month) for up to one year of continuous employment; beyond that, they are entitled to four weeks’ leave per year. The yearly leave entitlement increases to three days per month after 15 years of employment. Holiday pay is usually equal to the regular wage rate of pay, calculated using the 14-day or 35-hour rule.
If the employment relationship has continued for more than one month, the employee will receive a full salary for ten days. If the employee is still sick after ten days, he/she can apply for sick allowance (sairauspäiväraha) from Kela, if the employee is covered by social security. If the employment relationship has lasted for a period shorter than one month, half of the wages will be paid for the same period.
Female employees who are expecting a child are entitled to 105 days of maternity leave (Saturday counts as a workday), which can begin 30 to 50 days before the due date. Maternity leave in Finland is referred to as family leave and incorporates maternity leave, paternity leave, parental leave, and childcare leave. Generally, Family leave is unpaid, but this is stipulated within the employment contract/collective agreement.
Paternity leave in Finland can last up to 54 days. Fathers can choose to stay at home with their children for up to 18 days at a time, then select when to take the remaining 36 days. After maternity and parental leave, fathers can use their paternity leave. Parental leave is 158 days.