Employment in Finland is governed by the Employment Contracts Act, the Working Hours Act and the Annual Holidays Act, with universally binding collective agreements setting minimum pay in most sectors. Here is what employers need to know about leave, pay, tax and ending employment.
Annual holiday is earned during the holiday credit year from 1 April to 31 March and is counted in weekdays, including Saturdays. Family leave has been gender-neutral since the 2022 reform.
2 days for each full month worked, or 2.5 days once employment has lasted at least a year by 31 March. That is 30 days (5 weeks) a year.
Full pay for the day of falling ill and the following 9 days, if employment has lasted at least a month (50% if shorter). Kela then pays sickness allowance.
40 working days of pregnancy allowance, starting 30–14 working days before the due date.
Paid parental allowance days for each parent (320 in total), of which up to 63 can be transferred to the other parent.
Parental allowance is paid by Kela and can be used until the child turns two. Many collective agreements require the employer to pay full salary for part of the pregnancy and parental leave, in which case the employer receives the Kela allowance. After parental leave, a parent can take unpaid childcare leave until the child turns three.
Set up each Finnish leave type in IceHrm with its own accrual, carry forward and approval rules, including holiday that accrues month by month over the April to March holiday year. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
Finland has no statutory minimum wage. Universally binding collective agreements set minimum pay and often shorter working hours, and apply to all employers in their sector, even those outside an employers’ association.
Where no collective agreement applies, pay must still be reasonable and normal for the work.
8 hours a day under the Working Hours Act. Many agreements set 37.5 hours.
Total working time, including overtime, averaged over 4 months.
Overtime requires the employee’s consent each time. Daily overtime is paid at +50% for the first 2 hours and +100% after that, and weekly overtime at +50%, unless a collective agreement says otherwise. Overtime pay can be converted into equivalent time off by agreement.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so overtime premiums reflect what was actually worked. Time & attendance →
Earned income is subject to progressive state income tax plus a flat municipal tax and, for church members, church tax. Employers withhold tax using the percentage on each employee’s tax card (verokortti).
| Taxable earned income | Tax at lower limit | Rate on excess |
|---|---|---|
| €0 – €22,000 | €0 | 12.64% |
| €22,000 – €32,600 | €2,780.80 | 19% |
| €32,600 – €40,100 | €4,794.80 | 30.25% |
| €40,100 – €52,100 | €7,063.55 | 33.25% |
| Over €52,100 | €11,053.55 | 37.5% |
Tax credits, such as the earned income credit, reduce the actual tax paid, particularly on lower and middle incomes.
Employers pay earnings-related pension (TyEL), health, unemployment, accident and group life insurance contributions on top of gross salary.
Average employer share in 2026. The employee pays 7.30%, withheld from pay.
In 2026. Employees pay 1.10% for medical care and 0.88% for daily allowance if they earn at least €17,255 a year.
0.31% on payroll up to €2,509,500 a year and 1.23% above it, in 2026. The employee pays 0.89%.
Statutory accident insurance and group life insurance premiums are set by the insurer and depend on the industry and payroll. The actual TyEL rate depends on the employer’s pension insurer and size.
Build Finnish pay the way you already structure it, with your own salary components, deductions and formula columns, such as TyEL and unemployment insurance columns. Want to know how well IceHrm handles payroll calculations for Finland? Contact us or see Payroll →
An employer needs a legal reason to terminate an indefinite contract: either reasons relating to the employee, or financial and production-related reasons. Since 1 January 2026, dismissal on personal grounds requires a “proper reason” rather than a “proper and weighty reason”, but a warning is still normally required first.
| Length of employment | Notice |
|---|---|
| Up to 1 year | 14 days |
| More than 1 year, up to 4 years | 1 month |
| More than 4 years, up to 8 years | 2 months |
| More than 8 years, up to 12 years | 4 months |
| More than 12 years | 6 months |
There is no statutory severance pay in Finland. A court can award compensation of 3 to 24 months’ pay for unlawful termination. Employers with at least 20 employees must follow the Co-operation Act before redundancies, and employees made redundant for financial reasons have a right to be re-employed if the employer needs similar staff within a set period.
Earned but untaken holiday is paid out as holiday compensation when employment ends.
Finland’s public holidays are set by law. Midsummer Day and All Saints’ Day always fall on a Saturday, and Christmas Eve and Midsummer Eve are treated as days off in practice.
Pay for public holidays and for work on them is mainly set by collective agreements.
Leave groups give each office its own holiday calendar, so your Finnish team gets the right days off automatically while staff in other countries follow theirs. Holiday calendars →
An employment contract can be made in writing, orally or electronically, but the employer must give the employee written information on the key terms of employment unless these are already in a written contract.
Probation can last up to 6 months, or half of a fixed-term contract shorter than a year, and can be extended for absences. Fixed-term contracts have traditionally needed a justified reason, such as a temporary need or substitution, and repeated fixed-term contracts without one are treated as indefinite. In May 2026 Parliament approved an amendment allowing a first fixed-term contract of up to 1 year without a justified reason, with new obligations to offer further work; check its entry into force and conditions before relying on it.
Send contracts and statements of terms for e-signing, store them on the employee’s record, and track onboarding with task lists so nothing is missed on day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Finland, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Finland? Talk to us.
Start Free Trial Explore Features Contact Us