Payroll Information

Compliance with employment and payroll laws in Finland is essential for employers to avoid legal issues and to maintain positive relationships with their employees. It is important for employers to stay up-to-date on any changes to the laws and regulations to ensure that their payroll processes are accurate and compliant.

‍

Payroll Cycle

The typical payroll cycle in Finland is monthly, with employees receiving their pay at the end of each month. However, some companies may choose to pay their employees bi-weekly or bi-monthly. It is important for employers to ensure that they comply with the minimum wage laws and that the necessary deductions and taxes are withheld from employee paychecks.

‍

Employment Law

Employment law in Finland is regulated by the Employment Contracts Act, which outlines the rights and obligations of both employers and employees. The act covers issues such as minimum wage, working hours, and employee benefits. The standard workweek in Finland is 40 hours, and employees are entitled to a minimum of 4 weeks of paid vacation per year.

‍

Employment Contract

Employment contracts in Finland must be in writing and must include information such as the job title, salary, and working hours. The contract must also state the notice period required for termination of employment, which is typically one to 6 months depending on the length of service. Employers must also provide employees with a written statement of terms and conditions of employment within 1 month of the employee starting work.

The employment contract can be either fixed-term or indefinite. A fixed-term contract can only be used for temporary employment, and the duration of the contract must be clearly stated in the agreement. If the contract is renewed, the total duration of all fixed-term contracts cannot exceed two years. Indefinite contracts are more common, and there is no limit on their duration.

Employers in Finland are required to provide certain benefits to their employees, including health insurance, occupational health services, and pension contributions. These benefits are typically included in the employee's compensation package, and the employer is responsible for paying the associated costs.

‍

Probation Period / Trial Period

In Finland, a probation period of up to 6 months can be included in an employment contract. During this time, either the employer or the employee can terminate the contract with immediate effect and without any specific reason. The maximum length of a probation period depends on the length of the employment relationship and is shorter for shorter employment relationships.

‍

Working Hours

The standard workweek in Finland is 40 hours, and the maximum working time per day is 8 hours. However, employees can work up to 9 hours per day if they work 40 hours or less per week. Employers must provide employees with a minimum of 11 hours of rest between shifts, and employees are entitled to at least 1 day off per week. Employers are also required to provide breaks during the workday, which are generally 30 minutes for every 6 hours worked.

‍

Overtime

If an employee works more than 8 hours per day or 40 hours per week, the additional hours are considered overtime. Overtime must be compensated either with time off or with additional pay, which is typically 50% higher than the employee's normal hourly rate.

‍

Bonus

Employers in Finland may provide bonuses or other additional compensation to employees. However, bonuses must be included in the employee's regular payroll and taxed accordingly.

‍

Termination

An employment contract in Finland can be terminated either by the employer or the employee. The notice period required for termination depends on the length of the employment relationship, with longer notice periods required for employees who have been with the company for a longer time. The minimum notice period for the employer is 14 days, while the minimum notice period for the employee is 7 days. Employers may also terminate an employee's contract with immediate effect in certain circumstances, such as gross misconduct or breach of contract.

‍

Notice Period

The notice period required for termination depends on the length of the employment relationship. For example, employees who have worked for less than 1 year are entitled to a notice period of 14 days, while employees who have worked for more than 12 years are entitled to a notice period of 6 months. However, the employer and employee can agree on a longer notice period in the employment contract.

‍

Redundancy / Severance Pay

If an employer needs to reduce their workforce, they may need to make employees redundant. In Finland, employers must follow a strict process when making employees redundant, which includes consulting with employee representatives, providing notice to affected employees, and offering them the opportunity to find alternative employment within the company if possible. Employers must also provide employees with severance pay, which is typically based on the employee's length of service with the company.

‍

Maternity Leave

Expectant mothers in Finland are entitled to 105 working days of maternity leave, which can be taken before or after the birth of the child. The leave can begin up to 30 days before the expected due date and must end at the latest 30 days after the birth. During maternity leave, the mother is entitled to receive maternity allowance from the Social Insurance Institution of Finland (Kela).

‍

Paternity Leave

Fathers in Finland are entitled to 54 working days of paternity leave, which must be taken within 2 months of the child's birth. During paternity leave, the father is entitled to receive paternity allowance from Kela. In Finland, paternity leave can last up to 54 days. Fathers can choose to stay at home for up to 18 days at the same time as the child’s mother and then decide when to take the remaining 36 days. Fathers can use their paternity leave after maternity and parental leave. However, whenever the leave is taken, the employer must take the paternity leave before the child reaches 2 years old.

‍

Parental Leave

In addition to maternity and paternity leave, parents in Finland are entitled to parental leave, which can be taken until the child turns 3 years old. The total amount of parental leave entitlement is 14 months per child, and it can be split between the mother and the father as they choose. During parental leave, parents are entitled to receive parental allowance from Kela.

‍

Vacation and Annual Leave (paid time off)

All employees in Finland are entitled to a minimum of 4 weeks of paid annual leave per year. The entitlement increases to 6 weeks if the employee has turned 30 years old during the calendar year. Employers may offer more annual leave as part of the employment contract.

‍

Sick Leave

Employees in Finland are entitled to paid sick leave if they are unable to work due to illness or injury. The length of sick leave entitlement depends on the length of the employment relationship, and it typically ranges from one to 12 months. During sick leave, employees are entitled to receive sick pay from their employer for the first 10 days, after which Kela takes over and pays the employee sickness allowance.

‍

Other Leaves

Employees in Finland may also be entitled to other types of leave, such as study leave, unpaid leave, or compassionate leave, depending on their individual employment contract.

‍

Other Benefits

Employers in Finland may offer additional benefits to their employees, such as health insurance, dental care, and pension contributions. These benefits are typically included in the employee's compensation package and are subject to tax and social security contributions.

‍

Holiday

In addition to the annual leave entitlement, employees in Finland are entitled to 9 public holidays per year, including New Year's Day, Easter, May Day, Christmas Day, and Boxing Day, among others. If a public holiday falls on a weekend, it is typically observed on the following weekday.

‍

Taxation

Taxation and social security in Finland can be complex and dependent on individual circumstances. It is recommended that individuals consult with a tax professional or the Finnish Tax Administration (Verohallinto) for more information.

‍

Personal Income Tax

In Finland, personal income tax is levied on all taxable income earned by individuals. The tax rates are as follows:

• Up to €17,600: 6.5%
• €17,601 - €31,400: 17.5%
• €31,401 - €55,900: 21.5%
• €55,901 - €74,900: 32.5%
• Over €74,900: 34%

Individuals are also subject to a municipal tax, which varies by municipality but typically ranges from 16.5% to 22.5%.

Taxable income includes employment income, business income, investment income, and capital gains. Deductions and allowances are available to reduce the taxable income, such as for charitable donations, pension contributions, and certain business expenses.

‍

Social Security

Social security contributions in Finland are split between the employee and the employer. The total contribution rate is 23.85%, with the employee contributing 8.65% and the employer contributing 15.2%.

Social security contributions are used to fund various benefits and services, such as health care, pension, and unemployment benefits. Employees who are covered by the Finnish social security system are entitled to these benefits, regardless of their nationality or residence status.

In addition to social security contributions, there are also separate contributions for unemployment insurance and employee pension insurance. The unemployment insurance contribution rate for 2023 is 1.25%, with the employer and employee contributing equally. The employee pension insurance contribution rate for 2023 is 7.15%, with the employer contributing 18.5% and the employee contributing 6.35%.

‍

Visas and Foreign Workers

‍

General Information

Types of Work Visas:

There are several types of work visas available in Finland, including the following:

• Employee work visa: for those who have been offered employment by a Finnish employer
• Entrepreneur work visa: for those who want to start their own business in Finland
• Specialist work visa: for those who have exceptional skills or expertise in their field
• Seasonal work visa: for those who want to work in Finland for a limited period of time, typically in industries such as agriculture or tourism

‍

Eligibility Criteria

The eligibility criteria for a work visa in Finland varies depending on the type of visa, but generally includes the following:

• A job offer from a Finnish employer (for employee and seasonal work visas)
• Proof of qualifications and experience in the relevant field (for specialist work visas)
• A viable business plan (for entrepreneur work visas)
• Proof of sufficient funds to support oneself while in Finland
• A valid passport
• No criminal record or other factors that could pose a threat to public order or security in Finland

‍

Application Process

The application process for a work visa in Finland typically involves the following steps:

• The employer or applicant submits an application to the Finnish Immigration Service (Migri)
• Migri reviews the application and may request additional documentation or information
• If the application is approved, Migri issues a residence permit
• The applicant then applies for a work permit at the Finnish embassy or consulate in their home country

‍

Duration and Renewal

Work visas in Finland are typically valid for 1 year, after which they can be renewed. The renewal process typically involves submitting a new application and meeting the same eligibility criteria as the initial application.

‍

Family Members

Family members of the work visa holder may be eligible for a family reunification permit, which allows them to join the work visa holder in Finland.

‍

Overall, the process for obtaining a work visa in Finland can be complex and time-consuming. It is recommended that individuals consult with an immigration lawyer or the Finnish Immigration Service (Migri) for more information.

‍