Payroll & Employment Guide Finland

All employment contracts in Finland must be provided in written form, even for fixed-term or part-time roles. These contracts must specify key employment terms, such as compensation, job responsibilities, working hours, and notice periods.

Notice periods: 14 days - 6 months, depending on tenure and the collective agreement.

Termination of employment: Must comply with Finland’s Employment Contracts Act and may involve employer justification, mutual agreement, or expiry of fixed-term contracts.

Employers in Finland are legally required to provide a wide range of employee benefits and often supplement these with additional perks to stay competitive in the job market.

Mandatory benefits: Social security (covering health insurance, unemployment, and pension schemes.)
Common perks: Flexible working hours, remote work options, professional development, health and wellness programs, meal and commuting benefits, and extended parental leave.

Leave policies: Annual leave, sick leave, parental leave, care leave, and study leave.

Finland has a progressive personal income tax system and requires employers to withhold all relevant taxes and contributions at source.

• Income tax: In Finland, personal income tax is progressive, with national rates ranging from 12.64% to 44.25%. Municipal tax rates vary by region (4.70%–10.90%), and church members may also pay an optional 1.0%–2.25% church tax. Exact income brackets depend on annual earnings - consult the Finnish Tax Administration for detailed rates.
• Capital income tax: 30% on income up to €30,000, and 34% on the excess.
• Value Added Tax (VAT): 24%
• Social security contributions: Include health insurance and pension contributions.

Employers must pay salaries at least once per month, unless otherwise agreed in the employment contract. Finnish payroll is detailed and governed by both national law and sectoral collective agreements.

Salary payment deadline: At least monthly

Taxes and contributions payment deadline: Typically remitted monthly

Payroll declarations deadline: Payslips must accompany each payment; annual reports due by end of January

Payroll currency: EUR

Finland’s Employment Contracts Act and sector-specific collective agreements govern key employment terms, including wages, benefits, leave entitlements, and working conditions.

Total employment cost:

• Employer’s social security contributions: 19.78%
• Employer’s health insurance costs: 1.16%
• Employees’ social security contributions: 7.94%
• Employee’s health insurance costs: 0%

Minimum wage: €2,600

Using EOR services in Finland allows you to legally employ individuals in the country without opening legal entities there. The EOR takes over all the legal responsibilities as an official employer, including:

• Legal employment and contracts
• Payroll processing
• Tax withholding
• Benefits administration
• Onboarding/offboarding employees

Using PEO services in Finland provides HR and administrative support, while you remain the legal employer. PEO services are ideal for employers who already have legal entities in Finland but need support to manage their workforce operations, including:

• HR support and workforce administration
• Payroll and benefits management
• Compliance and local labour law guidance
• Employment contracts assistance

Native Teams provides a payroll calculator adjusted per Finland’s labour laws. Estimate gross-to-net salaries, tax withholdings, and employer costs in Finland with our localised calculator. Designed to meet all payroll and compliance requirements.