Quick facts
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Finland, located in Northern Europe, has a well-developed economy that is driven by high-tech industries, services, and manufacturing. Known for its high standard of living and robust social welfare systems, Finland boasts a skilled workforce, strong labor protections, and a focus on innovation. The Finnish economy benefits from a strong export sector, especially in technology, paper, and energy.

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Employment Contracts

Most employment relationships in Finland are permanent, but fixed-term contracts are becoming more common. If nothing is specified, an employment contract is considered to be indefinite. Fixed-term contracts can be renewed, but must have justified reasons.

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Probation Period

A probation period in Finland can last for up to 6 months. During this time, either the employer or employee can terminate the contract with immediate effect. However, dismissals during probation must not be discriminatory or violate the intended purpose of the probation.

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Working Hours

Standard working hours in Finland are 8 hours per day and 40 hours per week. Overtime is permitted, but total working time, including overtime, cannot exceed an average of 48 hours per week over a 4-month period. Employers must keep detailed records of employee working hours.

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Vacation Days

The Annual Holidays Act ensures that employees earn vacation based on their work in the preceding leave year, which runs from April 1 to March 31. Employees earn either 2 or 2.5 days of paid leave for each month of work, depending on the length of their employment relationship.

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Sick Leave

Employees who fall ill must notify their workplace immediately. In most cases, a doctor's note is required within three days of absence, although it may be needed earlier in certain industries. Employers must pay for the first 10 days of sick leave if the employee has worked for at least one month. After this period, employees receive a sickness allowance from the Social Insurance Institute (Kela), which is approximately 70% of their salary.

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Wages and Salary Payment

Wages in Finland must be paid on the last day of the pay period, unless otherwise agreed in the employment contract or collective agreement. Finland does not have a national minimum wage, but wages are typically set by collective agreements in various sectors. These agreements also cover other benefits such as food or lodging.

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Public Holidays

Finland observes several national public holidays:

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• January 1: New Year's Day
• January 6: Epiphany
• April: Good Friday, Easter Sunday, Easter Monday
• May 1: May Day (Vappu)
• May: Ascension Day, Whit Sunday
• June: Midsummer Eve, Midsummer
• November: All Saints' Day
• December 6: Independence Day
• December 24-26: Christmas Eve, Christmas Day, Boxing Day

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Employer Taxes

Employers in Finland are responsible for various contributions:

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• Health Insurance Contribution: 1.53%
• Pension Insurance: 16.95% on average
• Unemployment Insurance: 0.5% on gross salaries up to EUR 2,169,000, and 1.9% for amounts above
• Group Life Insurance: 0.07%
• Accident Insurance: 0.8% on average

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Employee Taxes

Employees contribute to the following taxes:

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• Income Tax: Varies based on income brackets, with rates increasing progressively.
• Pension Insurance: 7.15% for employees aged 17-52 and 63-67; 8.65% for employees aged 53-62.
• Unemployment Insurance: 1.4% for employees aged 17-64.
• Church Tax: Between 1-2.2%, depending on the municipality.

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Notice Period

When an employer terminates a contract, the notice period depends on the length of the employment:

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• 14 days if the employee has been employed for less than 5 years.
• 1 month if the employment exceeds 5 years.For employees resigning, the notice period is 14 days for employment under 5 years and 1 month for more than 5 years.

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Termination and Severance Pay

Severance pay is not required by law in Finland. However, employees must receive pay for unused vacation time and accrued wages upon termination. Notice periods can vary from 14 days to 6 months depending on the length of employment, as outlined by collective agreements or individual contracts.