Hiring guide in Finland

What should I know about hiring in Finland?

Hiring remote employees in Finland is a process that should be taken seriously. First and foremost, the Finnish labor market is highly regulated, and this means that there are specific rules and regulations that you need to follow when hiring someone. 

The employment contract is not subject to formal requirements in Finland. The act of contract may be oral, written or electronic. It can also arise tacitly when an employer allows an employee to work for them. However, the principal terms of employment are expected to be given to the employer applied to the employment relationship.

All employers must provide their employees with health insurance, and there are strict laws regarding vacation days and working hours. Furthermore, employers in Finland must deduct and remit payroll taxes from their employee’s paychecks before sending those funds to the Finnish Tax Administration.

Why is Finland a good choice for finding remote employees?

In a world where more and more businesses are going global, it’s crucial to have a remote workforce to help you stay competitive. And when it comes to finding the best place to outsource your remote employees, there’s no better choice than Finland. 

First, the Finnish education system is one of the best in the world. This means that you can find highly-skilled workers in Finland who are ready and able to take on your business challenges. Finnish workers are also known for their strong work ethic. You can trust that your remote employees from Finland will be diligent and dedicated to their work. 

And finally, The quality of life in Finland is high. Your remote employees will be happy and productive in their work if they live in a country with a high quality of life. And since Finland ranks consistently high on quality of life measures, you can be sure your employees will be happy here.

How can Native Teams help you hire in Finland

When it comes to finding the right employees, it can be tough to know where to start. Having Native Team on your side may assist in ensuring that your company follows all applicable Finnish legislation, beginning with the recruiting procedure and ending with the payment of wages and benefits. In addition, Native Teams can provide valuable insights into the local job market and help you navigate the cultural and legal landscape.

Hire your first Finish employee with Native Teams.

Legal requirements for hiring in Finland

Minimum wage

Contributions & taxes

Employer tax

Total Employment cost is between 27.69% to 29.24%.

Corporate tax

The corporate tax rate is 20%.

Employee tax

Total employee cost is between 10.36% to 11.86%.

Income tax

In Finland, the taxation of personal earnings is mandatory. The tax system is progressive, meaning the tax rate increases as income increases.

To calculate the salary and taxes in Finland please click here.

Payroll cycle

In Finland, wages are normally paid on the last day of each month on a monthly basis.

Is there a 13th salary in Finland?

In Finland, a 13th-month wage payout is customary and is typically made before the employee’s holiday.

Labor rules

Probation period

The Finnish legal system stipulates that the probationary period must not exceed 6 months.

Notice period 

The required notice period may vary depending on the duration of employment and the grounds for termination. The following is the notice period if the employer terminates the contract.

• 14 days’ notice for a one-year of service;
• A month’s notice is required after 1 to 4 years of service;
• 2 months’ notice after 4 to 8 years of service;
• 4 months’ notice after 8 to 12 years of service;
• 6 months’ notice over 12 years of service.

The following notice time applies if the employee ends the agreement:

• 14 days’ notice for up to 5 years of service;
• 1 month’s notice for more than five years of employment.

Severance period

In Finland, there is no requirement for a company to provide its employees with a severance package upon termination.

Working hours

In Finland, a typical work week consists of 40 hours, or 8 hours every day – usually Monday to Friday.

Leave and benefits

Public holidays

The following dates are the official public holidays in Finland:

1. New Year’s Day
2. Epiphany
3. Good Friday
4. Easter Monday
5. May Day
6. Ascension Day
7. Pentecost
8. Midsummer Eve
9. Midsummer Day
10. All Saints’ Day
11. Independence Day 
12. Christmas Eve
13. Christmas day
14. Second day of Christmas

Sick Leave

Employees who have been with the company for at least a month are eligible for paid sick leave. The company will cover the costs of the first 10 days of the absence. KELA’s sickness payment allowance (sairauspäiväraha) will lower salary by 50% if an employee is sick for more than 10 days and meets the eligibility requirements.

Maternity leave & Paternity leave

Mothers can start their leave between 50 and 30 working days before their due date. During pregnancy, a woman can receive maternity pay for 105 days. During paternity leave, which consists of 54 workdays, the father is entitled to a paternity allowance. Up to 18 days of paternal leave can be taken at the same time as the mother’s leave, and the remaining 36 days can be taken at any time. 

Other leave

Parental Leave

Each parent is eligible for two separate 12-week leaves of absence to care for a child. The shortest time off you can take is 12 calendar days. Part-time parental leave is possible if both parents agree with their employer to reduce their working hours and compensation by at least half for at least two months.

Childcare Leave

An employee is eligible for paid time off to care for a child under 3 or an adopted child up to 2 years after the adoption has been finalized. The time off needs to be used before the kid starts school.

What are the minimum vacation days?

Holiday pay is paid to employees for the time off they take to celebrate a holiday. Workers receive five weeks of vacation every year, four weeks in the summer and one week in the winter. In order to receive paid time off, workers must be employed during the holiday credit year (1 April – 31 March). Typically, holiday compensation is equal to or greater than the base salary.

Insurance

Health Security & Private Insurance

Anyone who has worked for an employer for at least three months within the previous fifteen months is entitled to free medical and dental care through the Social Security Administration.

*Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices.*

Visa

Relocation and Work Permits

Native Teams will apply for your work visa in the nation on your behalf and serve as your Employer of Record. All the required documents can be uploaded using our app. Until you have your work and residency visa, Native Teams will support you by providing you with frequent information on the progress.

How long is the Visa / Work Permit process?

2 to 4 weeks depending on the authorities and provided documents.

Which documents do you need?

To apply for a visa/work permit in Finland, upload the documents from our onboarding list (relocation to log in/pricing).

Why use Native Teams for hiring in Finland?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.