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Your Guide to Hiring Employees and

Contractors in Finland

Capital city

Helsinki

Currency

Euro

Language(s)

Finnish, Swedish

Ease of doing business

Very easy

Payroll frequency

Monthly

Employer taxes

27.69% to 29.24%

Payroll

Monthly Payroll

All employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.

Minimum Wage Requirements:

Given its high human development index, extensive workers protections, and high per capita income level, Finland doesn’t have a government-mandated minimum wage; rather, employers are mandated to pay whatever rate agreed upon via collective bargaining, under which most Finnish workers are covered.

Individual Income Tax

The individual national income tax ranges from 6% to 32%. Income tax is calculated according to progressive rates for national taxes. Employees also pay an additional flat rate for municipality taxes (up to 23%). Multiple additional factors may impact overall rates such as Church Tax, number of children, among others.

Up to EUR 27,900

Tax rate: 6%

Up to EUR 45,900

Tax rate: 17.25%

Up to EUR 80,500

Tax rate: 21.25%

Over EUR 80,500

Tax rate: 32%

Employer Cost:

The employer cost is generally estimated at 19% of the employee salary.

Working Hours

Work Week

Monday to Friday.

Overtime Pay & Maximum Hours

Overtime must be mutually agreed on in the employment agreement (EA). If there is overtime in the EA, hours outside of standard work hours are paid according to the Working Hours Act.

For additional hours, the employer can pay employees:

150% of the hourly rate for the first 2 hours.

200% of the hourly rate for the following hours.

Employment Termination

Employee contracts can be terminated if a just cause is established, such as dishonesty, negligence, fraud, or any other work-related offenses. That aside, notice should be provided in advance – provided both parties agree to it.

Notice period:

In Finland, termination notice periods depend on how long the employment relation has lasted.

14 days: up to 1 year of employment

1 month: 1 – 4 years

2 months: 4 – 8 years

4 months: 8 – 12 months

6 months: More than 12 years

Probation periods

Probations can last up to six months and can be extended in place of any sick leave taken during the probation period.

These details are subject to change by the respective government and regulatory authorities in each country.

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