Finland provides many opportunities for companies looking to expand. Creating a new business in Finland requires an in-country bank account, deposit of capital and a registration fee. There are many business types including partnerships and proprietors, as well as labor and payroll considerations before beginning operations.
Payroll and Tax Considerations:
- There is no National minimum wage. Employers are required to provide a wage statement showing the payment amount and the grounds on which the amount was determined
- Overtime work is paid by the hour. Regular pay plus 50% for the first 2 hours overtime, regular pay plus 100% for each subsequent hour is payable for daily overtime
- Termination notice is based on the duration of the employment relationship
- Severance pay is not formally regulated for non-public employers, but employers must pay out employee remaining salary and unused holiday leave
- There are 3 types of taxes for individuals including State, Municipality, and Church
- Tax rates range from 6-31% of earned income
- Employment contracts are not required to be in writing
HR and Statutory Requirements:
- Employees are entitled to 4 weeks summer holiday and 1 week of winter holiday leave
- There is no limit on the amount of sick leave an employee can take. The Employment Contract Acts states that employers must pay up to 9 days of sick leave. After 9 days, employees become eligible to receive sick pay through the Social Insurance Institute (Kela). The allowance is approximately 70% of the employee previous salary
- Employees are eligible for 105 weekdays of paid maternity leave. Employees can take up to 50 weekdays of leave before the birth
- Employees must notify their employer at least 2 months before they intend to start maternity leave
- Fathers are entitled to 54 days of paternity leave or 72 days for 2 children and 90 days for 3 children
- When people reach the age of 65, they can claim old age pension from Kela
- The average total earnings-related pension insurance contribution rate is 24.4% of the employee monthly gross wage. This includes both employer and employee contributions
Holidays in Finland
- January 1 – New Year’s Day
- January 6 – Epiphany
- April 15 – Good Friday
- April 18 – Easter Monday
- May 1 – May Day
- May 26 – Ascension Day
- June 24 – Midsummer Eve
- June 25 – Midsummer
- November 5 – All Saints’ Day
- December 6 – Independence Day
- December 24 – Christmas Eve
- December 25 – Christmas Day
- December 26 – Boxing Day
Managing payroll and compliance in Finland can be complicated. Blue Marble has created an easy-to-use, cloud-based payroll platform with aggregated monthly reporting to give you real-time access to your payroll across all countries and currencies. Our unique, hybrid service model provides a dedicated US-based team and direct access to in-country experts to help when questions come up. If you’re just getting started or would like to simplify operations in Finland, talk to us. Click here to learn more