🇫🇮 Hiring in Finland

💡 Everything you need to know to hire and manage employees in Finland through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.

At a Glance

Onboarding a New Hire

Plan for 5-7 business days between submitting a new hire and their start date. Finland requires pension (TyEL) and accident insurance registration before the employee starts, and Toku handles both. Your new hire just needs to provide their Finnish tax card so withholding is set up correctly from the first payslip.

Submit your new hire through the Toku platform and we take it from there: local employment agreement, statutory registrations, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.

Employer Costs

On top of each employee's gross salary, you pay the following employer contributions (2026 rates):

As a rule of thumb, total cost of employment is roughly 120-125% of gross salary. Also budget for the holiday bonus (lomaraha): most collective agreements require an extra payment of 50% of the employee's holiday pay, paid in connection with annual leave.

Employees pay their own contributions too: pension (7.30%), unemployment insurance (0.89%), and health insurance contributions (about 2%), plus progressive income tax and municipal tax. These are withheld from gross salary, not added on top of your costs. Toku calculates and remits all of the above.

Compensation & Payroll

Toku runs one payroll per month in Finland, and employees receive a payslip each cycle showing gross pay, deductions, and net pay. Finland has no statutory national minimum wage: minimum pay is set by the sector's collective bargaining agreement, which covers roughly 90% of the workforce. The holiday bonus (50% of holiday pay under most collective agreements) is paid in connection with annual leave, typically in the summer.

Employment Contracts & Probation

• Toku issues a compliant local employment agreement for every hire, including all terms Finnish law requires in writing.
• Indefinite-term contracts are the default. Fixed-term contracts need a justified reason (such as a project or substitute arrangement); repeated fixed terms without justification convert to indefinite-term.
• Probation can be agreed for up to 6 months and is set in the employment agreement. During probation, either party may end the contract without notice, provided the grounds are not discriminatory or improper.

Working Hours

The statutory standard is 40 hours per week (8 per day), though many collective agreements set 37.5 hours. Average weekly hours including overtime may not exceed 48 over a four-month period, and annual overtime is capped at 250 hours. Overtime needs the employee's consent and is paid at 150% for the first two daily hours and 200% after that; Sunday and public holiday work is paid at 200%.

Leave Entitlements

The holiday accrual year runs from 1 April to 31 March, with the main summer holiday usually taken between May and September. Parental leave is funded by Kela (the national social insurance institution), so it adds no direct salary cost to you.

Public Holidays (2026)

Finland observes 13 official public holidays in 2026, plus Midsummer Eve and Christmas Eve, which are treated as paid days off under most collective agreements.

Holidays falling on a weekend are not moved to a weekday.

Benefits: Required vs. Common Extras

Statutory (included in employer costs above): earnings-related pension (TyEL), national health insurance through Kela (medical care, sickness and parental allowances), unemployment insurance, and occupational accident insurance. Employers must also provide occupational healthcare covering at minimum preventive care, and most extend it to general practitioner and specialist visits.

Toku offers fully sponsored international health coverage through Remote Health. See Remote Health, Your Global Insurance Plan for coverage details and enrollment.

Common extras in the Finnish market include extended occupational healthcare, lunch benefits (tax-favored up to EUR 14.00 per day in 2026), sports and cultural benefits (tax-exempt up to EUR 400 per year), commuting benefits, and supplementary pensions. Toku can advise on the cost impact of any extras you want to offer.

Ending Employment

Finnish law requires "proper and weighty" grounds for employer-initiated termination, and the employee must be given a chance to be heard first, so involve Toku early if you are considering ending an employment relationship. For the process, see How to Terminate an Employee or Contractor.

Finland has no statutory severance pay, regardless of tenure or grounds. In practice, severance is often negotiated in mutual termination agreements, especially for senior employees. If a termination is found unlawful, compensation of 3 to 24 months' salary can be awarded, which is why grounds and process matter.

Hiring Someone from Overseas?

EU, EEA, and Swiss nationals can work in Finland without a permit; they only register their residence for stays over three months. Other nationals need a residence permit before starting work, with routes including the Residence Permit for an Employed Person, the Specialist Residence Permit, and the EU Blue Card; the general work-based permit requires a gross salary of at least EUR 1,600 per month in 2026, and processing typically takes 4 to 12 weeks. Talk to Toku before extending an offer to a candidate who needs sponsorship.

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Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.