Employer of Record in Finnland

Introducing Finland

Snuggled between Scandinavian neighbor Sweden and transcontinental Russia, Finland is a nation that launched several lasting influences on the modern global economy: SMS texting, Nokia, Linux, even some major gaming studios (not to mention being the home of sauna culture).

Yet, Finland is experiencing one of the EU’s highest unemployment rates - currently 10.5%. On the plus side, the market offers excellent hiring opportunities for foreign employers seeking local talent, with plenty of available job seekers to fill general, non-specialist vacancies.

While setting up a legal entity in Finland may be cost-prohibitive for your company, employing workers need not be. In fact, partnering with an EOR and leveraging their knowledge of local labor laws, employment agreements, payroll processing, tax regulations, and workforce management can make it possible in a relatively short time compared to doing it yourself.

What does an EOR do?

An EOR acts as the local employer on behalf of a foreign entity.

The EOR takes care of everything to do with the HR administration and payroll management of your hire, such as drafting contracts in compliance with local employment laws, calculating employer costs and employee pay, preparing compliant offers, and even termination processes. They leverage their deep understanding of Finnish employment regulations, tax and reporting obligations, recruiting services, and legal compliance to support your hiring needs.

Some EORs also offer work permit/visa application support.

A snapshot of Finland’s labor market

The hiring market
Unemployment	10.5%. This is mainly due to Finland’s currently weak economy - partly a result of the Russia-Ukraine war (neighboring Russia was a close trading partner with Finland). This has impacted economic growth and reduced the demand for labor. Many older workers are now staying in the workforce longer because of recent pension reforms and longer life expectancy.
Greatest hiring activity	Helsinki region (Uusimaa) - around 34% of employed people work here
Ballpark hiring timelines	Typically several weeks
Sectors with skills shortages	Technology, health, and social care
Hard-to-fill roles	Doctors, nurses, dental hygienists, firefighters, AI and cybersecurity specialists, sheet metal welders, machinists (2025)
Demand for English language skills	English is widely spoken in Finland, particularly among younger Finns, but it isn’t heavily used as a working language outside of international firms and technology sectors.

The salary market
Employer tax contributions	There are 5 mandatory employer contributions (2026 figures): Earnings-related pension (or TyEL): 17.10% (average) Health insurance: 1.91% Unemployment insurance: 0.31% for payrolls up to €2,509,500 and 1.23% on the excess Accident insurance: 0.51% (average) Group life insurance: 0.06% (average)
Monthly minimum wage	No statutory minimum wage, but sector minimums are usually set by collective agreements.
Average gross monthly salary	€4,353 (including performance-based pay and agreed allowances)
Average gross annual salary	€52,200
Personal income tax rates	€0-22,000 12.64% of taxable income €22,000-32,600 €2,780.80 + 19% of income over €22,000 €32,600-40,100 €4,794.80 + 30.25% of income over €32,600 €40,100-52,100 €7,063.55 + 33.25% of income over €40,100 Over €52,100 €11,053.55 + 37.50% of income over €52,100 Municipal tax of 4.70%-10.90% is on top of these rates

The costs involved in hiring in Finland

A very important fact to be aware of when hiring in Finland is that statutory employer costs add around 20% extra to salary calculations. We break down below what these typically include.

Base Salary

Current data on average base salary in Finland is not readily available.

Data for gross salary averages is more forthcoming. The most recent Statistics Finland data cites the average gross salary (with overtime and working-hour supplements, but excluding one-off bonuses) as €4,353 in Q3 2026.

Statutory Employer Contributions

INSURANCES
Earnings-related pension (TyEL)	Pension contributions are compulsory for any employee earning €71.72 or more a month. The company can choose which of several private insurers to take out TyEL insurance with. The average contribution is 17.10%.
Health insurance	Employers contribute 1.91% of the employee’s gross salary, which is used to fund Kela’s sickness and parental leave allowances.
Unemployment insurance	Companies pay 0.31% if their payroll is up to €2,509,500 or 1.23% if it is above this.
Accident insurance	The average contribution is 0.51% and varies depending on job risk (for example, construction work is riskier than office-based work). Contribution also varies depending on the chosen insurer’s pricing.
Group life insurance	Employers contribute an average of 0.06%, which goes towards lump sum payments to the families of employees who have died.

ALLOWANCES
Occupational health care	No legal minimum amount, however employers must have preventative occupational health care in place even if they have only 1 employee. Employers can choose a private provider, local wellbeing services county, or offer their own service. Kela will reimburse certain costs up to an annual cap.
Holiday pay	Workers are entitled to 2 paid holiday days per month in their first year; if their employment has lasted at least one year by 31 March of the holiday credit year, then 2.5 paid holiday days are accrued to qualifying months thereafter
Sick pay	There is no annual limit to sick days. If the employee has worked at the company for at least a month, they are entitled to full pay for the day they fall sick plus up to the 9 following working days, which restarts the next time they are sick (unless the same illness occurs within 30 days). Employees working there for less than a month are entitled to 50% pay only. Collective agreements may increase this. Kela pays after this time (if salary is still paid, the employer can claim any sickness allowance back from Kela).
Overtime pay	Daily: +50% on top of regular pay for the first two hours beyond 8 hours per day, and +100% for every hour after that. Weekly: +50% on top of regular pay per hour for any hours beyond the 40 normal working hours per week (that haven’t already been counted as daily overtime). Period-based (for roles with hours scheduled over a 2-week or 3-week period vs a regular number per day): +50% on top of regular pay for the first 12 overtime hours in a 2-week period or 18 overtime hours in a 3-week period, then +100% on top of regular pay for hours after that. Paid time off in lieu can also be offered by mutual agreement for any of the above. Note: Collective agreements may set different overtime rules.
Sunday / church holiday work	Any work on these days is payable at double the normal hourly rate.
Holiday bonus	Not set by Finnish law but most employees receive this as it is covered by collective agreements. The bonus is generally 50% of their holiday pay.
Family leave	Employers are not legally obliged to pay workers during family leave unless the employment contract or a collective agreement includes this. In such cases, Kela reimburses the employer for part of it and may compensate them with a one-off €2,500 payment (pending certain conditions).

Calculating employment costs

Would you like to get a ballpark employment costs figure for your potential hire? Use our Finland calculator below to quickly learn more (note: the final figure may vary depending on the actual annual salary offered).

Here’s what hiring really looks like in Finland

Overall: 🟡 Moderately challenging

Easier to navigate	More challenging to navigate
🟢 English is widely spoken (Finland ranks 2nd in the EF English Proficiency Index)	🟡 Collective agreements dominate wage and work conditions, even if the employer is not part of an employers’ association
🟡 The high unemployment rate (10.5%) means that there are plenty of candidates on the market	🟡 The flip side of the high unemployment is certain niche skills can be harder to fill due to the specialist skills required
🟢 Finland offers a stable and transparent environment for businesses to operate	🔴 Statutory employer contributions of nearly 20% are costly

Workplace culture

Finnish workplaces are generally flat hierarchies that operate on the basis of trust and autonomy. Micromanagement is not appreciated and independence is valued. Workers of all ages and levels are encouraged to speak up and collaborate.

Finns are considered to be direct communicators who ‘tell it as it is’. This does not equate to rudeness, but rather contributes to professional efficiency.

Working hours

8 hours a day and 40 hours per week is standard. Since 2020, the Working Hours Act enables workers and their employer to agree on a flexible working time arrangement in which the employee can choose when and where to work for at least half their working hours.

Public holidays

There are roughly a dozen national public holidays each year. There is no legal requirement for employers to pay for these days off, with the exception of Independence Day (6 December), which is paid subject to the relevant legal conditions. Any time off and payment for the other public holidays depend on collective bargaining agreements or the employee’s contract.

Equality

Equality is normal and expected in Finland. Companies with 30 or more staff must have a gender equality plan in place that includes employee representative input and a regular pay survey. The Non-Discrimination Act provides another layer of protection against discrimination such as age, disability, or origin.

Remote Working

Finland has the highest share of remote workers in the EU, with around 20.5% of employed people working from home. The country’s well-connected infrastructure facilitates this, with almost 100% 5G coverage and everyone having the legal right to broadband access.

Probation

Trial periods must be mutually agreed and can last for a maximum of 6 months (or, for fixed-term contracts, no longer than half the length of the contract). Probation can be extended if the worker is absent due to family leave or sickness for 30 days or longer; the worker must be informed before the original trial period ends. Note: collective agreements may require shorter trial periods, so it is important to check beforehand.

Notice Periods

Notice periods vary depending on length of employment with the company. Unless stated otherwise in collective agreements or employment contracts, statutory notice periods set by the Employment Contracts Act are as follows:

Employment Length	Employer Notice	Employee Notice
Up to 1 year	14 days	14 days
1-4 years	1 month	14 days
4-5 years	2 months	14 days
5-8 years	2 months	1 month
8-12 years	4 months	1 month
12+ years	6 months	1 month

Dismissals

Letting someone go requires a valid reason such as conduct, performance, or business-related needs, with stricter justifications for redundancy. Since 2026, a ‘proper reason’ is enough for dismissal on personal grounds; however, if the issue is neglect or breach of duties, the employer must generally first give a warning and a chance to improve (only serious misconduct skips this step). Before the decision is finalized, the employee must have an opportunity to respond, followed by written notice.

Employees may ask for the reasoning in writing. Immediate dismissal is reserved for very serious matters such as theft or extreme misconduct. Employees cannot be dismissed due to reasons such as family leave, sickness (in most cases), or union involvement.

Unlawful dismissal can result in compensation anywhere from 3-24 months’ pay.

Work Permits

EU, EEA, and Swiss citizens do not require a work permit - they just need to register their right of residence. All other citizens require permission to work in Finland. An overview of current permit categories (2026):

Type	Minimum Monthly Gross Salary	Requirements	Eligible for Fast Track (14-day processing)
Specialist	€3,937	Degree or specialist work experience	🟢
EU Blue Card	€3,937	Degree plus employment contract of 6 months+	🟢
Managers and Intra-Company Transfers	Varies	Top/middle management or specialists/managers transferred within the same company	🟢
Employed Person (TTOL)	€1,600	Most common permit. Usually sector-specific and generally for skilled areas such as construction and health. Vacancy may be subject to a labor market test before permit approval	🔴

A Finland-specific problem to be aware of: lack of specialist skills

While Finland has plenty of active job seekers, specialist talent is harder to find and highly competitive.

This is especially apparent for roles in health and care, AI, cybersecurity, cloud computing, electronics engineering, and other technical trades.

The reasons are several:

• Fewer than 40% of young Finns hold a degree, meaning that specialist third-level skills are locally harder to come by
• The increasing demand for specialists means that competition is fierce
• Certain jobs (e.g. doctors) require Finnish, so it is important to check before hiring in the country
• Hiring talent from outside the EU/EEA/Switzerland requires a work permit and multiple employment compliance steps, which introduces hurdles and delays for employers

Finding the right specialist often means looking abroad, even though hiring foreign talent quickly and in compliance with all statutory obligations may be a challenge.

Working with a local Employer of Record can take the HR, payroll calculations, contract management, and Finish labor laws compliance burden off your shoulders while ensuring the entire employment relationship is compliant.

Compliance risks for employers in Finland

EU Pay Transparency Directive

Since June 2026, EU countries must follow the EU Pay Transparency Directive, which ensures equal pay for equal work for all employees, regardless of gender. Finland missed the initial deadline to comply; the bill is currently being debated in parliament to fit around existing equality and discrimination laws (likely to come into effect on 1 January 2027).

Once in force, employers will need to follow its requirements, primarily being transparent about pay or pay range for a role, disclosing the average pay by gender of colleagues doing equal or equivalent work upon request, as well as being forbidden to ask about candidates’ previous salary or to include a pay confidentiality clause in an employment contract.

Non-Compete Compensation

The Employment Contracts Act (2001) does not permit employers to add a non-compete clause in an employee’s contract unless they are willing to compensate them for the period the clause is in effect: 40% of their regular pay for clauses lasting 6 months or fewer or 60% for longer ones.

Not only that, employers require a strongly justifiable reason for including one, such as the employee’s knowledge of trade secrets.

60% Tax Withholding Rate

If an employee does not yet have - or does not provide - a tax card, the employer must withhold 60% from every salary payment until one is produced.

The hiring process for foreign non-EU hires can be sped up considerably by applying for the residence permit and receiving the Finnish personal identity code as soon as possible (this is needed before a tax card can be issued).

Benefits of hiring local employees through an EOR in Finland

Using an EOR to handle your hiring of local or foreign employees in Finland can save you time, money, and hassle. Their local market experts are on top of everything compliance- and process-related, meaning you don’t have to.

1. The EOR is the employing local legal entity, not you, so you don’t need to register your own company in Finland
2. Your EOR will ensure that employment contracts are compliant with Finnish employment laws and relevant collective agreements
3. They make sure that all statutory insurances are arranged and paid for correctly
4. EOR consultants have current local knowledge of work permit types, requirements, paperwork, and processing times
5. You manage the employee, the EOR handles payroll management and HR administration (support with the tax card, identity code, contract, etc.)
6. By handling everything for you, EORs are a great way to test the market before committing yourself further

Ready to hire in Finland?

Hiring in Finland involves more than finding the right candidate. From managing payroll, taxes and benefits administration to ensuring full compliance with Finland’s employment laws, Rivermate handles the complexities as the legal employer so you can hire with confidence.

Talk to a Rivermate Finland hiring expert

Sources:
Statistics Finland – Labour force survey, September 2026
Statistics Finland – Index of wage and salary earnings
Statistics Finland – Employed persons by region
Statistics Finland – Job vacancy survey, Q2 2026
Generally Applicable Collective Agreements
Bank of Finland – Finland’s labour market weaker than the euro area
KEHA Centre – Labour Force Barometer 2025
Job Market Finland – 2025 labour shortage sectors decree
Job Market Finland – Changes to fixed-term contracts, lay-offs and re-employment
Finnish Government – Fixed-term contract changes in force 1 June 2026
Finnish Government – OECD comparison on higher education places
Finnish Centre for Pensions (ETK) – Private sector pension contributions
Finnish Centre for Pensions (ETK) – Pension reform in 2017
Employment Fund – Paying unemployment insurance contributions
Varma – Social security contributions and limits 2026
Kela – Funding and key indicators
Kela – Occupational health care
Kela – Applying for support during an employee’s family leave
Finnish Tax Administration – Tax bases
Finnish Tax Administration – Health insurance contribution
Finnish Tax Administration – Employees from overseas
Finnish Tax Administration – Finnish personal identity codes for workers
Finnish Tax Administration – Key employees from other countries
Finnish Tax Administration (Incomes Register) – Pay transparency
Finnish Immigration Service (Migri) – Income requirement
Finnish Immigration Service (Migri) – Fast track service
Finnish Immigration Service (Migri) – Residence permit for an employed person
Ministry of Social Affairs and Health – Gender equality in working life
Ministry of Social Affairs and Health – Government proposal HE 129/2026
Suomi.fi – Annual holiday pay and holiday bonus
Suomi.fi – Employment contract and trial period
Suomi.fi – Period of notice
InfoFinland – Finnish working life
InfoFinland – Tax card
Finnish Institute of Occupational Health – Organisation of occupational health care
Finnish National Agency for Education – Education at a Glance 2025
Eurofound – Minimum wage country profile: Finland
European Commission – Finland 2025 Digital Decade country report
EUR-Lex – Directive (EU) 2023/970 (Pay Transparency Directive)