Employer of Record (EOR) in Finland

Employment contracts in Finland

Verbal agreements are valid and enforceable in Finland, but we recommend drafting a written contract. This contract must detail the core employment terms, including pay, benefits, and termination conditions. 

Salaries are usually stated in euros (EUR), but this isn’t a legal requirement unless work is performed abroad. You must share the contract with your professional by the first pay period. 

A Finland EOR drafts a compliant contract on your behalf, ensuring everything aligns with Finnish law and CBA requirements. 

Leave entitlements in Finland

Working hours in Finland

The standard workweek in Finland is 40 hours. According to the Working Hours Act, a workday can’t be longer than eight hours. Many CBAs, however, specify shorter hours.

Total working hours, including overtime, can’t exceed an average of 48 hours a week over a four-month period. Overtime work needs employee consent on each occasion and is compensated as follows:

• Daily overtime: 150% of the regular rate for the first two hours and 200% for subsequent hours

• Weekly overtime: 150% of the regular rate

• Time off in lieu: Overtime pay can be exchanged for paid time off if mutually agreed

Public holidays in Finland

Finland has 13 paid public holidays. While Christmas Eve and Midsummer Eve aren’t official holidays, they’re treated as such by most employers under CBAs or common practice.

The public holidays are:

• New Year's Day

• Epiphany

• Good Friday

• Easter Sunday

• Easter Monday

• May Day (Vappu)

• Ascension Day

• Pentecost

• Midsummer Day

• All Saints' Day

• Independence Day

• Christmas Day

• Boxing Day (St. Stephen's Day)

Vacation days in Finland

Employees accrue vacation days based on how many months they work during the year (April 1–March 31). A month counts towards accrual if an employee works at least 14 days or 35 hours in that month.

• Less than one year of service: Employees earn two days’ leave per qualifying month (24 days per year).

• Over one year of service: Employees earn 2.5 days’ leave per qualifying month (30 days per year).

Most vacation days are taken during the summer holiday season (May 2–September 30). Employees also usually get a holiday bonus (lomaraha) — 50% of their holiday pay. This bonus isn’t a legal right, but it’s mandated by most CBAs and is common practice.

Finland sick leave

An employee who has worked for at least one month is entitled to paid sick leave. The employer pays the full salary for the first day of sickness, plus the next nine working days. After this, the employee may be eligible for a sickness allowance from the Social Insurance Institution (Kela), based on their income. If employment has lasted less than one month, the employee gets 50% of their pay.

Parental leave in Finland

Finland has a gender-neutral parental leave system. Expecting employees are entitled to 40 weekdays of pregnancy allowance leave before the child's due date. After the child is born, the parental leave is as follows:

• Each parent gets 160 days.

• A parent can transfer up to 63 days to the other parent or another caregiver.

• Single parents can use all 320 days.

• Leave can be used flexibly until the child turns two.

During leave, Kela pays a parental allowance. Some CBAs may require employers to pay full salary for a portion of the leave.

How an employer of record in Finland helps manage leave entitlements

A Finland EOR ensures your business complies with Finnish labor laws and CBAs. Use a Finland EOR to manage labor requirements like vacation days, sick leave, and Finland’s progressive parental leave system — including parental leave payments — so you don’t have to.

Health insurance and supplementary benefits in Finland

Finland has a good public healthcare system, so extra private health insurance isn’t a standard benefit. However, employers must legally provide and pay for occupational healthcare services (työterveyshuolto) for all employees. 

How an employer of record helps with benefits in Finland

A Finland EOR manages and administers all mandatory benefits on your behalf. The EOR will also stay updated on regulatory changes. This reduces risk, so your team is free to focus on core business operations. 

Bonuses in Finland

Bonuses are set by CBAs, employment contracts, or established company practice. Although they aren’t legally required, bonuses can make your offers more competitive. Common bonuses include:

• Holiday bonus (lomaraha): This is one of the most expected bonuses in Finland. It’s typically set at 50% of the employee’s annual holiday pay.

• Performance bonus: This is based on individual, team, or company performance. It’s often tied to specific results.

• Profit-sharing bonus: Some companies distribute a share of profits to employees as a fixed amount or a percentage of salary.

• Seniority or loyalty bonuses: Given for long service or loyalty to the company.

Termination and severance in Finland

A contract may include probation of up to six months, during which either party can terminate the contract without notice. For fixed-term contracts, probation can’t be more than half the contract's length.

Terminating an indefinite contract is more difficult. It must be related to the employee's conduct, or to the employer's financial performance or production-related reasons. 

The termination process in Finland is strictly regulated, but there’s no legal requirement for severance pay if a termination is lawful. However, if a court finds that it’s unlawful, an employee is entitled to compensation, typically ranging from 3–24 months' salary.

 Minimum notice periods for employers are:

• Up to one year of service: 14 days

• 1–4 years: One month

• 4–8 years: Two months

• 8–12 years: Four months

• Over 12 years: Six months

An EOR in Finland manages all offboarding, termination, severance, and notice processes, including final payroll taxes. These can be complex and time-consuming, so having the right Finland EOR partner is a must. 

Payroll and taxes in Finland

In Finland, payroll considerations include state tax, municipal tax, and social security payments.

Employer social security contributions: Total employer contributions are around 22–25% of total salary, covering:

• Statutory earnings-related pension insurance (TyEL)

• Health insurance

• Unemployment insurance

• Accident and group life insurance

Employee taxes and contributions: Employees contribute to income tax and social security. Income tax is progressive, so it gets higher based on how much you earn. For 2026, the state income tax rates are:*

*Source: https://taxsummaries.pwc.com/finland/individual/taxes-on-personal-income  

Employees also pay: 

• A municipal tax — rates vary by municipality, but this ranges from 4.7–10.9%

• A church tax if they’re a member of the Evangelic-Lutheran, Orthodox, and Finnish German Church in Finland — this typically ranges from 1–2%

• A portion of social security contributions — health, pension, and unemployment insurance

A Finland EOR calculates employee salaries and bonuses, along with withholdings, such as income tax and social security contributions. This saves you time and headaches while keeping you compliant with Finnish tax and payroll regulations.

Choosing the an EOR in Finland

When selecting an employer of record in Finland, consider the following: 

• Compliance expertise: The right EOR has in-depth knowledge of Finnish labor laws, including the labor code, CBAs, and local tax regulations. This ensures all employment practices, from contracts to termination, are fully compliant.

• Comprehensive EOR solutions: Choose an EOR that manages all aspects of employment, including payroll processing, tax remittances, benefits administration, leave management, and offboarding.

• Local market understanding: Look for a Finland EOR with a strong local presence or proven experience in the country. 

• Scalability and flexibility: The EOR should accommodate your needs, whether you're hiring a single employee or a global team , and grow with your business.

• Technology and integration: An AI-powered EOR simplifies onboarding, management, and employee payment. Look for an EOR that integrates with existing HCM, PEO, or payroll systems to streamline operations.

• Transparency and communication: Choose an EOR that offers clear communication channels, transparent pricing, and regular updates on compliance changes.

• Reputation and references: Research the EOR's reputation, client testimonials , and industry recognition to ensure they have a track record of reliability and success.

• Data security and compliance. Ensure your EOR follows strict data security protocols like GDPR. This is critical for protecting sensitive employee information and maintaining compliance.

Use G-P EOR for global hiring in Finland

G-P EOR is the award-winning, AI-enabled global hiring solution that empowers startups , SMB s, and enterprise businesses to build global teams with ease. Onboard, manage, and pay top talent in over 180 countries in minutes, without the complexity of entity setup. 

G-P EOR is the preferred partner for leading HCM, PEO, and payroll platforms . Bring your workforce data together in one place to maintain existing workflows while keeping accurate data across your integrated systems.

Request a proposal to start hiring in Finland today.