If your company is ready to cross borders into Finland, you need to be prepared to handle everything from payroll to legal matters. With a population of only 5.5 million, finding skilled workers in Finland that can help grow your business can be difficult. Once you find them, you must make sure you meet all the country’s laws and regulations related to your Finland payroll options. No matter what you decide, Globalization Partners is here to help.
Taxation Rules in Finland
Finland’s corporate income tax rate is 20%. Companies that import goods are also subject to a sales tax known as VAT. The general VAT rate is 24%, but this percentage changes depending on what you’re importing. Businesses in Finland must also apply a 15% to 20% withholding tax on payments to foreign corporations and 30% on payments to non-resident individuals.
When you set up your Finland payroll, you must make sure to follow individual tax laws for employees. Finland operates under a progressive tax scheme between 6.5% and 31.75%. The country also has a robust social insurance system that includes residence- and work-based benefits such as family benefits, financial aid for students, and health insurance.
Finland Payroll Options for Companies
Trying to expand your business into Finland and learn all the country’s employment laws can feel daunting. However, you have a variety of Finland payroll options at your disposable to help you make the most informed decision. Choose between:
- Remote payroll: Put your new employees from Finland on the same payroll with the employees from your parent company.
- Internal payroll: Gather the necessary resources to run payroll and go through the hassle of setting up a subsidiary in Finland.
- Local Finland payroll processing company: Work with a company in Finland to handle your payroll for you. While they’ll take care of setting up your Finland payroll, you’ll remain liable for any compliance mistakes.
- Payroll outsourcing with a global PEO: Choose Globalization Partners for your Finland payroll outsourcing. We take care of your payroll and take on compliance as the Employer of Record.
How to Set Up a Payroll in Finland
Once you decide on a payroll option in Finland, you’ll need to set up your system. All new employees must provide personal information such as their tax code number, bank account details, and pension details to set up Finland payroll. You’ll also need to register yourself as an employer if you pay wages or salaries to at least two employees regularly or at least six employees at the same time temporarily. You must withhold taxes on these wages based on your employees’ tax card.
Entitlement and termination terms depend on whether the dismissal was by the employer. The country has no statutory rules on counter-notice if the employer dismisses an employee, and an employer can terminate a relationship with a valid reason. The notice period varies based on the employee’s length of employment.
Payroll Processing Company in Finland
When going through your Finland payroll options, you’ll see numerous benefits by choosing Globalization Partners. Contact us today to learn more.