Meeting about employment issues
Employment issues

In employment contracts and employment relationships, employers must comply with the minimum requirements on employment terms and the conditions stated in a nationwide collective labour agreement considered to be representative of the sector. An employee posted to Finland is entitled to the salary determined by a universally valid Finnish collective labour agreement for the sector.

According to the Employment Contracts Act, an employer must provide employees with a description of the most essential terms and conditions of employment if they are not indicated on a written employment contract. An employment contract can be made for a specified period or until further notice. In an employment contract, the employee personally commits to working for the employer under their management and supervision against wages or other compensation.

An employment contract can be made for a specified period or until further notice. An employment contract for a specified period requires a justified reason. An employment contract can be made in writing, orally or electronically.

Accident and pension insurance


An employer must take out accident and pension insurance for their employees; employees must be provided with group life insurance and unemployment insurance in connection with  accident insurance. An employer must also provide occupational health care.

Tax and social security


An employer is responsible for paying any withheld taxes and social security contributions to the tax authorities, and must submit annual notifications to the tax authorities, and the pension and accident insurance companies. Information on the wages and salaries paid to employees must also be submitted.

Terms and conditions of employment


Working hours


Regular working hours are usually at most 8 hours per day and 40 hours per week. In a two week period, working hours are no more than 80 hours and in a three week period no more than 120 hours. The weekly hours may also be arranged in longer and shorter periods during which the average weekly hours do not exceed 40 hours. Working hours can take on alternative arrangements, for example in two or three week periods – this must be done according to the law or through collective agreements.



An employee also has the right to receive pay for the time he/she is on annual holiday. When employment has lasted less than 1 year, holiday leave is normally based on gaining 2 days or 2 1/2 days for each holiday credit month worked. Maximum amount of holiday per year is 5 weeks, if not otherwise determined in a collective labour agreement for a sector. Normal wages are paid for the time an employee is on holiday.

Sick pay


According to the law, an employee who is unable to work due to an illness or an accident is entitled to paid sick leave. Wages are paid for the day when the illness started and for the working days. If at the start of the disability, the employment relationship has lasted for at least one month, the employee will be paid full wages for the said period. If the employment relationship has lasted for a period that is shorter than one month, half of the wages will be paid for the same period.

Parental leave


Parental leave lasts 158 working days and is taken during pregnancy or in the period following birth. It is extended by 60 working days per child in the case of multiple births. Both parents can take the parental leave in up to two separate periods of at least 12 working days each During parental leave, Kela (The Social Insurance Institution of Finland) pays parental allowance..

Employer costs for a business

Required contributions by employers include:

• Employers’ health insurance (social security) contribution

• Unemployment insurance

• Earnings-related pension (TyEL) insurance contribution

• Group life insurance premium

• Occupational accident insurance


When your company hires employees, they must take care of the insurance of their employees as well as the payment of wages, withholding tax and insurance premiums. Statutory insurance and other payments include:

• employment pension insurance
• insurance against the risk of accident and occupational disease
• group life insurance for employees
• unemployment insurance contribution
• social security contribution


Following information updated in September 2018:

Employer’s pension contribution

Average 17.75 %

Employment accident insurance according to risk and the size of the company

                     Average 0.80 %


Unemployment insurance, total wages under 2 083 500 €

0.65 %

Unemployment insurance for the portion of the wage bill exceeding  2 083 500  €

2.60 %

Group life insurance

Average 0.07 %


Employer’s social security contribution

 0.86 %

Total wages under 2 083 500 €

Average 20.13 %

Wages exceeding 2 083 500 €

Average 22.08 %


Source: Confederation of Finnish Industries (EK)


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Cost calculator

Start by picking an employee type:


Employee costs estimation calculator


Local and income tax (26.8%)
Pension cost (5.15%)
Unemployment insurance (0.6%)

Employee receives monthly

€ 2158


Pension contribution (average 17.95%)
Employment accident insurance according to risk and the size of the company (average 0.8%)
Unemployment insurance (0.8%) For companies with total wages over € 2044500, unemployment insurance 3.3%
Group life insurance (average 0.07%)
Employer’s social security contribution (1.08%)
Monthly cost for annual bonus and holiday pay (15.9%)

Total monthly cost for employer

€ 4436

Average employer cost:
22,09% of employee wage for companies with total wages under € 2044500
24,99% of employee wage for companies with total wages over € 2044500

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