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Compliance

Finland employment compliance: a guide for employers

What employers in Finland need to know: employment contracts, collective bargaining agreements, onboarding, working hours, payroll, benefits and termination.

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Finland employment compliance: a guide for employers

Finland is a straightforward country to hire in. An employment contract can take any form, there is no minimum wage law, and the acts describe the rules for annual leave and sick pay in detail. What surprises employers is how much applies without a signature. A collective bargaining agreement can bind a company that never signed it, and accident insurance has to be in place before an employee’s first day.

Key takeaways

  • Within 7 days of the first day, the employer states in writing who the parties are, when work starts, where and what the work is, how pay is set and the working hours. The remaining terms follow within a month.
  • A generally binding collective bargaining agreement sets minimum pay and terms for the work it covers, even for an employer that never signed it.
  • Accident insurance must be in place before the first day of work, and a company that pays wages regularly registers with the Tax Administration before paying them.
  • Every payment is reported to the Incomes Register by the 5th calendar day after payday. Withholding tax is paid by the 12th of the following month.
  • The employer pays sick pay for the day the employee falls ill plus the next nine weekdays, and Saturdays count as weekdays.
  • The employer’s notice period runs from 14 days to 6 months depending on how long the employment has lasted, and a notice of termination needs a valid reason.

What must an offer letter and employment contract in Finland include?

Finnish law has no separate rules for an offer letter. What matters is the employment contract, which can be oral, written or electronic, so an accepted offer letter can already create a binding employment contract. The document the law does require is the written statement of key terms of work, and a written employment contract that contains those terms counts as the statement.

What the employer gives in writing Deadline
Items 1–8: the parties, start date, reason for a fixed term, probation, place of work, main duties, how pay is set, working hours 7 days from the first day of work
Items 9–15: variable hours, agency work, training, annual leave, notice period, the collective bargaining agreement that applies, the insurance companies 1 month from the first day of work
Item 16: work abroad for a month or more Before the employee leaves
Any change to a term By the day the change takes effect

Three more rules apply to the employment contract:

  • Probation lasts six months at most, and only if both parties agreed on it. In a fixed-term contract it can be no longer than half the contract.
  • A fixed-term contract needs a justified reason, or it becomes permanent. Since 1 June 2026, an employer and employee who have not worked together in the past five years can agree a fixed-term contract of up to one year without a reason.
  • Very short hours are exempt. Work that averages under three hours a week over four weeks needs no written statement.

For more information, see the full contract requirements in Finland.

Does a collective bargaining agreement bind the employer?

It does if a generally binding collective bargaining agreement covers the work the employees do. The employer then has to apply at least that agreement’s terms, whether or not it belongs to an employers’ association. An employment contract term below the agreement’s minimum is void, and the agreement’s term replaces it automatically.

What decides it is the work the employees actually do, not the company’s registered line of business. The answer depends on the exact sector. Some common ones:

Sector Generally binding? Confirmation decision
Retail trade Yes 16/2022
Tourism and hospitality, employees and supervisors Yes, both 13/2010, 14/2010
Information technology services No 6/2022
Information and communications technology (ICT), salaried and senior salaried employees Yes 5/2026, 19/2013

The information technology services agreement is not generally binding, so a software or consulting company whose work falls only under it is not bound. A company whose employees do work covered by the ICT agreements is. The confirmation decisions are published in Finlex’s register of collective agreements. Open the decision page itself, because the index also lists negative decisions.

Getting this wrong is expensive. An employee can claim underpaid terms for up to five years back while the employment continues, plus interest and waiting-time pay.

For more information, see how generally binding agreements work in Finland.

What must an employer do before a new employee’s first day?

Most of the setup happens before the employee starts, because some insurance has to be in place before the first hour of work. The minimum steps are:

  1. Employer registration. A company that pays wages regularly enters the Tax Administration’s employer register before it starts paying them.
  2. Accident insurance. The employer takes it out before the work begins. It covers injuries at work and occupational diseases. The obligation starts once the year’s pay passes a small wage sum, which the law sets at 1,200 euros and indexes every year.
  3. Earnings-related pension insurance. The employer arranges it with a pension provider. It covers every employee from the month after they turn 17 who earns at least 71.72 euros a month in 2026.
  4. Occupational health care. Preventive occupational health care is mandatory from the first employee, with a written action plan that is reviewed every year.
  5. The collective bargaining agreement. If one binds the employer, its pay and working hours terms apply from the first day.
  6. The employment contract and the statement of key terms. The employer writes them, including any probation period, and gives the first part of the written statement within seven days.

Payroll itself starts with the first payday, covered under payroll.

Which labor laws are specific to Finland?

Finland has no minimum wage law. Minimum pay comes from collective bargaining agreements, and where none applies and no pay was agreed, the employer pays what is customary and reasonable for the work. The other rules specific to Finland mostly concern attendance: working hours, overtime and rest.

Rule Figure
Regular working hours 8 hours a day, 40 hours a week
Maximum, overtime included 48 hours a week on average over a four-month cycle
Daily overtime pay +50% for the first 2 hours, +100% after that
Sunday work +100%
Flexible hours balance +60 to −20 hours at the end of each four-month cycle
Daily rest 11 hours
Weekly rest 35 hours
  • Overtime needs consent every time. A general overtime clause in the employment contract does not count.
  • There is no separate overtime cap. The only limit is total working time, overtime included.
  • Working hours records are mandatory for every employee, salaried staff included.

For more information, see the working time rules in Finland.

How does an employer set up payroll in Finland?

Payroll in Finland runs through the Incomes Register, a national database that the Tax Administration, the pension providers and the Social Insurance Institution of Finland (Kela) all read from. Once the employer is registered and insured (before the first day), each payday follows the same steps:

  1. Withholding. The employer deducts income tax and the employee’s shares of the pension and unemployment insurance contributions from gross pay.
  2. Incomes Register report. Each payment is reported by the 5th calendar day after payday, or the 8th on a paper form.
  3. Tax payment. The withholding tax and the employer health insurance contribution are reported and paid by the 12th of the following month. When the 12th is not a banking day, the deadline moves to the next one.
  4. Insurance invoices. The pension provider, the accident insurer and the Employment Fund bill the employer based on the reported pay.
Contribution in 2026 Employer Employee
Earnings-related pension insurance 17.10% on average 7.30%
Employer health insurance contribution 1.91% None
Unemployment insurance, wage sum up to 2,509,500 euros 0.31% 0.89%
Unemployment insurance, wage sum above 2,509,500 euros 1.23% 0.89%
Accident insurance Set by the insurer None

The employee’s pension rate is the same for every age group from 1 January 2026. For the full calendar of payroll deadlines, see the Finland HR compliance calendar.

Which benefits must an employer provide?

The statutory benefits in Finland are annual leave, sick pay and family leave, alongside accident insurance, earnings-related pension insurance, unemployment insurance and occupational health care (see payroll). A holiday pay supplement (lomaraha) is not one of them. It comes from collective bargaining agreements only.

Benefit What the employer must do
Annual leave Accrues 2 weekdays a month in the first year, 2.5 after. Saturdays count as leave days
Leave year Runs from 1 April to 31 March
Summer leave At least 24 weekdays, given between 2 May and 30 September
Holiday pay Paid before the leave begins, for leave of more than six days
Sick pay, employed a month or more Full pay for the day of falling ill plus 9 weekdays
Sick pay, employed under a month Half pay for the same period
Parental leave Up to 320 weekdays of allowance from Kela, 160 for each parent. No statutory pay from the employer
Pregnancy leave Up to 40 weekdays of allowance from Kela

After the employer-paid days, Kela pays sickness allowance. Its waiting period is the same ten weekdays, so it does not reimburse the employer. A collective bargaining agreement often extends the employer-paid period.

For parental leave, the employee tells the employer two months before the leave starts, or one month before for leave of 12 weekdays or fewer. They have the right to return to their previous job, or to an equivalent one if that is not possible. Annual leave keeps accruing for up to 160 days of pregnancy and parental leave per parent.

For more information, see how sick pay works in Finland and parental leave in Finland, or calculate one employee’s leave with the annual leave calculator.

How does an employer end an employment contract lawfully?

An employer in Finland can only end a permanent employment contract with a valid reason, a set process and the right notice period. A reason related to the employee needs to be a proper reason, such as a breach or neglect of obligations or a substantial change in their ability to do the work. A financial or production reason needs the work to have diminished substantially and permanently.

The compliant steps are:

  1. Other work first. Before dismissing, the employer offers any work that matches the employee’s skills, then other suitable work, with the training it needs.
  2. A warning for conduct. A dismissal for a breach needs an earlier warning, unless the breach is extremely serious.
  3. A hearing. The employee is told the reason and may answer, with an assistant if they want one.
  4. Timing. The employer acts within a reasonable time of learning about the reason.
  5. Delivery. The notice of termination is given in person. One sent by letter or email counts as received seven days after sending at the latest.
  6. Written reasons. On request, the employer gives the reason and the end date in writing.
  7. Final pay. It is due when the employment ends and includes holiday compensation for unused annual leave. Late payment adds up to six days’ pay for waiting time, plus interest.
  8. Employment certificate. On request, the employer gives one stating how long the employment lasted and what the work was.
Length of employment Employer’s notice period Employee’s notice period
Up to 1 year 14 days 14 days
1 to 4 years 1 month 14 days
4 to 5 years 2 months 14 days
5 to 8 years 2 months 1 month
8 to 12 years 4 months 1 month
Over 12 years 6 months 1 month
  • Probation. Either side can end the employment contract without a notice period, but not on discriminatory grounds.
  • Immediate cancellation. Cancelling an employment contract with immediate effect needs an extremely weighty reason and must happen within 14 days of learning of it.
  • Re-employment. An employer with 50 or more employees that dismisses on financial or production grounds offers the former employee any work of the same kind it needs done within four months, provided they are registered as a jobseeker. After 12 years of employment, the duty lasts six months.
  • Compensation. An unlawful dismissal can cost the employer up to 24 months’ pay.

For more information, see terminating employment in Finland.

Frequently asked questions

Does an employment contract in Finland have to be in writing?
No. An employment contract in Finland can be oral, written or electronic, and an oral contract binds both parties just as a written one does. What the law does require is a written statement of the key terms of work. Within seven days of the first day of work, the employer gives the parties, the start date, the reason for any fixed term, any probation period, the place of work, the main duties, how pay is set and the working hours. Within one month, it adds any variable hours, agency work, training rights, annual leave, the notice period, the collective bargaining agreement that applies and the insurance companies used. A written employment contract that contains all of these terms counts as the statement. The only exemption is work that averages under three hours a week over four weeks. When a term changes later, the employer confirms the change in writing no later than the day it takes effect.
How long can a probation period be in Finland?
A probation period in Finland can last six months at most, and it exists only if the employer and the employee agreed on it. It never applies by default. In a fixed-term employment contract, the probation period can be no longer than half the length of the contract, so a three-month contract allows six weeks of probation at most. The employer may extend a probation period by one month for every 30 calendar days the employee was off sick or on family leave during it, but only if it tells the employee before the original period ends. During probation, either party can end the contract without a notice period. The reason may not be discriminatory, and it may not be unrelated to the purpose of probation, which is to find out whether the employee suits the work. The period starts on the first day of work, not on the day the contract is signed.
Does a generally binding collective bargaining agreement apply to a company outside any employers' association?
Yes. Some collective bargaining agreements in Finland are confirmed as generally binding. Such an agreement sets minimum terms for every employer whose employees do the work it covers, whether or not the employer belongs to an employers' association or has ever signed or read the agreement. Pay tables, working hours rules and supplements then apply as minimums. What decides the question is the work the employees actually do, not the line of business in the company's trade register entry. A term in an employment contract below the collective bargaining agreement's minimum is void, and the agreement's term replaces it automatically, even if the employee agreed to less. If the employer applies the wrong terms, an employee can claim the difference for up to five years back while employment continues, plus interest. The only reliable check is the confirmation decision itself, which the official Finlex register publishes. Its index also lists negative decisions, so the decision page has to be opened and read.
What must an employer do before a new employee starts work in Finland?
Before a new employee starts work in Finland, the employer has to have several things in place. It must register with the Tax Administration's employer register before it starts paying wages regularly. It must take out statutory accident insurance before the work begins, which covers injuries at work and occupational diseases. It must arrange earnings-related pension insurance with a pension provider for every employee aged 17 or over who earns at least 71.72 euros a month in 2026. It must arrange preventive occupational health care, described in a written action plan that is reviewed every year. Then, within seven days of the first day of work, it gives the employee the first part of the written statement of key terms, and the rest within one month. If a collective bargaining agreement binds the employer, its pay and working hours terms apply from the first day as well.
Is there a minimum wage in Finland?
Finland has no minimum wage law. Minimum pay comes from collective bargaining agreements instead. When a generally binding collective bargaining agreement covers the work an employee does, its pay tables set the minimum, and they bind the employer even if it belongs to no employers' association and never signed the agreement. An employer bound by an agreement through membership of an employers' association applies that agreement's pay terms. Where no collective bargaining agreement applies and the employer and the employee never agreed on pay at all, the employer must pay a wage that is customary and reasonable for the work. So the first step in setting pay in Finland is to check whether a generally binding collective bargaining agreement covers the work, because an agreed salary below its minimum is void and the agreement's rate applies automatically.
Which payroll contributions does an employer in Finland pay in 2026?
An employer in Finland pays four main contributions on top of salary in 2026. Earnings-related pension insurance averages 24.4 percent of pay in total. The employer carries 17.10 percent on average, and the employee's 7.30 percent is deducted from pay. The employee rate is now the same for every age group. The employer health insurance contribution is 1.91 percent of pay, reported and paid with the withholding tax. Unemployment insurance costs the employer 0.31 percent of its wage sum up to 2,509,500 euros. Above that, the rate is 1.23 percent, and the employee pays 0.89 percent. The fourth is statutory accident insurance, whose premium the insurer sets by industry and risk, because the law fixes no rate. The employer reports every payment to the Incomes Register by the fifth calendar day after payday, and pays withholding tax and the health insurance contribution by the 12th of the following month.
How many days of sick pay does an employer pay in Finland?
An employer in Finland pays sick pay for the day the employee falls ill and the next nine weekdays. An employee who has worked there a month or more gets full pay for that time. One who has worked there less than a month gets half pay. The count is in weekdays, and a weekday includes Saturday. Only Sundays, church holidays and midweek public holidays are left out, so an absence that starts on a Monday runs until the Thursday of the following week. The employer pays for the days in that window that would have been working days. After that, the Social Insurance Institution of Finland, Kela, pays sickness allowance, and its waiting period is the same ten weekdays, so it does not reimburse the employer's period. A collective bargaining agreement often extends the employer-paid period by length of service, so the agreement that applies has to be checked before a day count is used.
How much notice must an employer give to end an employment contract in Finland?
The notice period an employer in Finland gives depends on how long the employment has lasted. It is 14 days in the first year and one month after that. It rises to two months after four years of employment. After eight years it is four months, and after twelve years it is six months. An employee who resigns gives 14 days' notice, or one month after five years. The parties can agree on different periods, but never longer than six months, and if the employer's agreed period is shorter than the employee's, the employee may use the employer's. A collective bargaining agreement can set its own periods. A notice of termination only ends the employment contract lawfully if the employer has a valid reason. For reasons related to the employee, that means a proper reason, such as a breach of obligations after a warning. For financial or production reasons, the work must have diminished substantially and permanently.

Sources

Disclaimer

Taito.ai does not provide legal, tax or accounting advice. This article is for general information only. It describes the law as it stood on the date above and is not advice on any specific situation. Rates and thresholds change. Check with a qualified adviser before acting on anything here.

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