Employing in Finland

Finland, known for its robust welfare system and high standard of living, presents unique opportunities and challenges in the employment landscape. The Nordic nation has an industrialised and mostly free-market economy, with a developed infrastructure, skilled workforce, competitive operating costs, and a highly conducive business environment.

Finland is also one of the least corrupt countries in the world and has minimal red tape to cut through.

Employing in Finland requires adherence to strict labour laws, a comprehensive understanding of Finnish social security systems, and navigating intricate tax regulations.

From managing employee contracts to ensuring compliance with local employment standards, TopSource Worldwide provides comprehensive support. Our expertise in Finnish Employer of Record services ensures your business ventures in Finland are compliant, efficient, and culturally aligned, making the transition into the Finnish market smooth and hassle-free.


Our Expertise

Managing a global workforce in Finland

Managing a global workforce in Finland demands a nuanced approach blending local labour laws with international HR practices. TopSource Worldwide helps with harmonising your global HR practices with Finnish employment standards. We provide tailored solutions in Employer of Record services, payroll processing, benefits administration, and legal compliance, ensuring your global workforce in Finland thrives in a balanced, compliant, and productive work environment.


Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.


Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.


Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success. 


Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.


Global Employee Cost Calculator

Estimate the cost of your new hire with our calculator. Simply enter their location and salary information in to this handy tool to see what will be spent in employment costs each month.

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Hear from our clients about our EOR solutions in Finland

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven

”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar

”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Client based in Ft Worth, Texas, USA

Personalised Employer of Record services in Finland

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in Finland. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your Finland-based employees.

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End-to-end Finland payroll services

Looking to expand into Finland? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your Finland expansion initiatives.

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Global entity management

Venturing into the Finnish market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

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Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

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Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in Finland

Entering the Finnish market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in Finland.


Finland Insights

Key insights into Finland's landscape


VAT rates: Standard VAT rate is 24%. Reduced rates are 14% for food and 10% for medicine, books, and cultural events.


Ease of Doing Business rank: As of 2020, Finland ranked 20th in the World Bank's Ease of Doing Business Index.


Consumer Confidence Index: As of November 2023, Finland's Consumer Confidence Index dropped to -12.4.


Employee maternity/paternity leave: Maternity leave is 105 days; Paternity leave is 54 days. Parents can share 158 days of parental leave.


Employee termination period: Notice periods range from 14 days to 6 months, depending on employment duration.


Employee salary pay date: Salaries are typically paid monthly, often on the last banking day of the month.


Bank holidays: Finland observes around 13 public holidays, including Christmas, Easter, and Midsummer Day.

Social security system

The Social Insurance Institution of Finland, Kela, is responsible for providing social security coverage for both Finnish residents who live in Finland on a permanent basis and, in certain situations, to Finns living abroad.

The social security benefits offered by Kela are family benefits, health insurance, rehabilitation, basic unemployment security, basic social assistance, housing benefits, financial aid for students, disability benefits and basic pensions. These benefits are funded by a combination of taxes and insurance contributions.


Public healthcare

Public healthcare in Finland includes:

  • Promotion of health and prevention of diseases, as well as care and rehabilitation
  • Maternal and child healthcare
  • Vaccinations
  • Doctor, dentist and nurse appointments
  • Mental health services
  • Emergency and on-call service
  • Hospitals
  • Home care
  • School and student healthcare
  • Occupational healthcare

Statutory benefits


This is a statutory benefit in Finland, and all employers must take out a valid insurance and report employees’ earnings to the Incomes Register. In 2021, the basic TyEL insurance contribution is 24.80% of the employees’ wages and salary. The employees’ share of the contribution is:

  • 17–52 years of age — 7.15% of wages and salary
  • 53–62 years of age — 8.65% of wages and salary
  • 63–69 years of age — 7.15% of wages and salary

The employee’s pension contributions are withheld from the employee’s salary and the entire earnings-related pension contribution is then paid to the pension insurance company.

Employer costs
  • Employee pension insurance — 24.8% (2021) of gross salary (see below for employee element), deducted from the employee’s gross salary
  • Sickness insurance payment — 1.34% (employee pays additional 1,18%)
  • Unemployment insurance payment — 1.70% (employer part 0.45%, employee part 1.25%)
  • Occupational accident insurance — 0.70% of the total annual salary amount paid by the employer
  • Group pension insurance — on average 0.07% of the total annual salary amount paid by the employer (this is paid together with the occupational accident insurance

Holiday & leave

Holiday Bonus

Employees subject to the IT sector CBA are entitled, in addition to their normal salary during annual holiday, a holiday bonus (50% of holiday salary).

Holiday Entitlement

The right to annual holiday is established in either the applicable collective bargaining agreement or, if no CBA is applicable, in the Annual Holidays Act. An employee accumulates days of annual holiday during the holiday credit year from 1 April to 31 March inclusive. Two-and-a-half days of holiday are credited for each month during which the employee works ‘a full holiday credit month’. Thus, employees normally have 30 days of holiday each year. Saturdays are calculated into the 30 days, meaning that the employee has five weeks of holiday.

The entitlement is two weekdays of holiday for each full holiday credit month if, by the end of the holiday credit year, the duration of the employment relationship has been an uninterrupted period of less than one year. The annual holiday for these employees is up to 24 days, forming up to four weeks of annual holiday. When the number of days of holiday is calculated, any fraction of a day is rounded up to constitute one full day of holiday.

A full holiday credit month depends on what is agreed in the employment contract as to how much the employee shall work. If the employee is away for a reason other than those listed in section 7 of the Annual Holidays Act, the employee might not earn holiday during that month.

The holiday season, during which the holidays are mainly taken, means the period from 2 May to 30 September inclusive. It’s normal for employees to take four weeks of accumulated holiday during this period and the remaining one week of holiday in the winter.

The employer and employee may also agree on different timing of holidays. Mandatory law, however, stipulates that the employee shall have an uninterrupted period of 12 holiday days (two weeks) during the period from 2 May to 30 September.

Sick Leave

According to the Employment Contracts Act, an employee is entitled to continued salary payment during sickness from the first day of illness and for nine subsequent days.

After this time, the employee is entitled to sickness allowance from the government. If the employer continues to pay salary, they’re entitled to receive the allowance payment instead of the employee.

According to the IT service sector CBA, an employee is entitled to continued salary as follows:

  • Employment <3 years — 3 weeks
  • Employment 3–5 years — 5 weeks
  • Employment 5–10 years — 6 weeks
  • Employment >10 years — 8 weeks

Contractual provisions

Probationary period

The maximum allowed is six months. It’s not possible to extend the probationary period for performance-related issues. If the employee is away from work during the probationary period due to incapacity for work or family leave, the employer is entitled to extend the probationary period by one month for every 30 calendar days of sickness leave or family leave.

Working hours & Overtime

The maximum regular working hours according to the Working Hours Act is 40 hours per week.

According to the IT service sector CBA, the maximum regular working hours are 7.5 hours per day and 37.5 hours per week.

Overtime must always be at the employer’s request and in each case, the employee has to confirm approval to work the overtime offered. An employee cannot work on average more than 48 hours per week (including any possible overtime) during a four-month period.

For some more senior management-type roles, it may be possible to deem that the basic salary includes a provision for overtime. In this case, it’s imperative to include a clear indication in the contract of employment to show the basic salary and the overtime element of the total salary.


There has recently been an update to Finnish legislation regarding non-competition agreements with employees, which will result in the employer having to pay the employee a monetary compensation during the time of the non-competition restriction. These changes will take effect on 1 January 2022. For non-competition agreements entered into before the new legislation takes effect, the new rules would apply after a one-year transition period i.e. 1 January 2023. During the transition period, the employer is entitled to terminate any unnecessary non-competition agreements that have been made before the new law comes into force, without the notice period set out in the new legislation.


The key non-compete changes

  • The compensation would be at least 40% of the employee’s salary during the duration of the non-competition restriction where the non-competition period doesn’t exceed six months. The compensation would be at least 60% of the employee’s salary for the whole period where the non-competition period is more than six months.

  • The employer has a unilateral right to terminate the non-competition agreement (with notice) but not after the employee has terminated their employment. In this case, the employer is required to pay compensation even if it’s not necessary to limit the employee’s competing activities.

  • The compensation is paid throughout the non-competition period, on the regular salary payment days.

Statutory insurances

Worker’s compensation insurance

Workers’ compensation insurance is part of Finnish social security. It provides cover for all employees and compensation is paid, in accordance with the Employment Accidents Insurance Act, for injuries resulting from an accident at work or an occupational disease.

In Finland, the statutory workers’ compensation insurance is administered by private accident insurance companies. TopSource Worldwide has a policy with If P&C Insurance — a private accident insurance company.

Unemployment insurance

The Employment Fund (Työllisyysrahasto) was launched on 1 January 2019 through the merger of the TVR and the Education Fund. It’s an organisation established by law, regulated by the Finnish Financial Supervisory Authority and forms part of the Finnish social security system.

Unemployment insurance contributions are used to finance costs such as earnings-related unemployment benefits, adult education allowances, pension benefits and Kela benefits. The employee and employer are obliged to make unemployment insurance contributions.

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in Finland

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

  • Understand the different types of EOR taxes
  • Stay up-to-date on the latest changes to EOR tax regulations
  • Avoid penalties for non-compliance
Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013. 

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Adrian Cooney

Reviewed by:

Adrian Cooney

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about Finnish employment solutions

What is an Employer of Record in Finland?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in Finland. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in Finland?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in Finland. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in Finland?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in Finland. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.

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