Introduction

Finland presents a highly attractive destination for business expansion, thanks to its robust infrastructure, welcoming culture, competitive tax rates, and strong support for innovation. The country fosters an environment conducive to collaboration and success, making it an ideal location for businesses looking to grow.

Key sectors driving Finland's economy include electronics, chemicals, machinery, forestry, vehicles, and engineered metal products. Significantly, Finland's abundant forests cover three-quarters of its land, making timber one of its most vital natural resources.

Moreover, Finland is a global front-runner in technology and Information and Communications Technology (ICT). The country is home to internationally acclaimed companies like Nokia, Metso, Neste Oil, and Stora Enso, which exemplify its prowess in technological innovation.

The Finnish labor market is characterized by a strong presence of trade unions. Much like in other Nordic countries, these unions play a crucial role in advocating for employees' rights, negotiating terms of employment through collective bargaining agreements (CBAs). These agreements typically cover a range of issues, including working hours, minimum wage standards, holiday entitlements, benefits, notice periods, and other statutory requirements.

For businesses considering hiring in Finland, whether for remote positions or building a local team, understanding the nuances of Finnish employment law and practices is essential. This includes familiarity with Finland's progressive approach to employee well-being and labor rights, its emphasis on work-life balance, and commitment to fostering inclusive and equitable workplaces. This comprehensive guide to hiring in Finland is designed to help you navigate these aspects, providing insights into the key employment terms and hiring practices that define the Finnish work environment. This guide serves as an invaluable resource for businesses aiming to tap into Finland's dynamic and skilled workforce.

Capital Helsinki
Languages spoken Finnish and Swedish are the two official languages spoken. Many locals also speak Sami, Romani, Finnish sign language, and Karelian. English is spoken by most Finnish as a second language.
Population size 5.542 million
Payroll frequency Monthly
Currency Euro
VAT 24%

Payroll and Taxes

In Finland, the payroll and taxation system involves contributions from both employers and employees towards various social security benefits. These contributions are pivotal in maintaining the country’s robust social welfare system. Here's a detailed overview:

Employer Contributions in Finland:

  1. Employment Pension Insurance: The contribution rate varies among companies, with an average rate of approximately 17.4%. This insurance is fundamental for providing retirement benefits to employees.
  2. Unemployment Insurance: Employers contribute at a rate of 0.5% on total compensation up to EUR 2,197,500, and the rate increases to 2.05% for compensation exceeding this threshold. This insurance offers financial support during periods of unemployment.
  3. Statutory Accident Insurance: On average, this is calculated as 0.7% of the employee’s total wage. It provides coverage for accidents and occupational diseases that occur during employment.
  4. Statutory Group Life Insurance: The average premium rate is 0.06% of the employee's wage. This insurance offers financial protection to the employee's dependents in case of the employee's death.
  5. Employer’s Sickness Insurance Contribution: Set at 1.34%, this contribution funds the sickness insurance system, which provides various health-related benefits.

Employee Contributions in Finland:

  1. Employment Pension Insurance: For individuals aged 17-52 or 63-67, the contribution rate is 7.15%, and it is 8.65% for those aged 53-62. This pension insurance is crucial for ensuring financial stability in retirement.
  2. Employee’s Sickness Insurance: The contribution rate is 1.7%, comprising a Medicare contribution (0.53%) and a daily allowance component (1.18%). The daily allowance is not collected if the annual salary is below EUR 15,128. This insurance aids in covering healthcare expenses and provides income support during sickness-related absences.
  3. Employee’s Unemployment Insurance: Employees contribute 1.5% towards unemployment insurance, providing a safety net in case of job loss.