Payroll

Payroll Cycle

In Finland, the payroll frequency is monthly, typically paid on the last day of the month.

13th Salary

13th-month salary payments are customary in Finland and are usually paid before the employee’s holiday.

Working Hours

General

The standard working week in Finland consists of 8 hours a day and 40 hours a week.

Overtime

All working hours of more than the standard working hours per week are to be paid as overtime and are regulated by the employment contract/collective agreements etc. It must also be mutually agreed upon before the commencement of any overtime working hours.

In general, maximum overtime limits must not exceed 138 hours over four months and 250 hours annually.  

Overtime hours are paid at 150.00% of the regular salary rate of pay for the first two hours and 200.00% for any subsequent hours. Any overtime work required on a weekend/rest day/Sunday is compensated at 200.00% of the regular salary rate of pay.  

Working Week

Monday–Friday

Leave

Paid Time Off

Annual leave is calculated from April 1 to March 31, and vacation is typically taken between May 2 -September 30.  Employees earn two vacation days per month or 2.5 days per month for continuous employment of up to one year of employment; after that, the entitlement is four weeks’ leave per year. Upon completing 15 years of service, the annual leave entitlement increases to 3 days per month.

The annual holiday is earned and taken on working days. Saturday is also considered a working day even if the employee did not work on Saturdays. At least two weeks of the annual holiday must be taken as an uninterrupted period, however, the employer and the employee may agree on taking the holiday outside the holiday seasons and they may also convert part of the holiday into shorter working hours.

The rules concerning the calculation of the holiday pay depend on the pay system and holiday accrual rules applying to the employee.  The holiday pay must be paid before the start of the holiday. However, for a holiday not exceeding six days, the holiday pay may be paid on the employee’s normal payday.

Public Holidays

There are 10 public holidays.

Sick Days

Employees who have been employed for at least one month are entitled to receive full sick pay for the first ten days of leave, paid for by the employer. If the employee is sick for more than ten days and eligible, their salary payment will reduce by 50.00% as a sickness payment allowance (sairauspäiväraha) from KELA.

Maternity Leave

Maternity leave in Finland is referred to as family leave and incorporates maternity leave, paternity leave, parental leave, and childcare leave.  Generally, Family leave is unpaid, but this is stipulated within the employment contract/collective agreement.  

Specific elements of Family leave have an allowance paid for by Kela, e.g., parental and home care allowances.

A pregnant employee is entitled to 105 days of maternity leave. Working is allowed during maternity leave if it can occur without endangering the safety of the mother, fetus, or child. However, the mother cannot work while on maternity leave two weeks before the due date and the two weeks after giving birth.

Paternity Leave

In Finland, paternity leave can last up to 54 days. Fathers can choose to stay at home for up to 18 days at the same time as the child’s mother and then decide when to take the remaining 36 days. Fathers can use their paternity leave after maternity and parental leave. However, whenever the leave is taken, the employer must take the paternity leave before the child reaches two years old.

New reforms are expected in summer 2022.

Parental Leave

Parental leave is 158 days.  Both parents can take full-time parental leave for a maximum of two leave periods, with a minimum length of the leave of 12 working days. Parental leave may be taken part-time, with each of the parents agreeing with their employer to shorten their working hours and reduce their pay accordingly for at least two months.

Other Leave

Depending on the Collective Agreement/Employment Contract terms, an employee may be allowed additional leave types, following the approval of the employer, for the following leave types:

Childcare leave: Employees are entitled to take unpaid childcare leave for the full-time care of a child under the age of 3 or the care of an adoptive child for two years after adoption. The employer must take the leave before the child enters the school.

Termination

Termination Process

The termination process varies according to how the Employment Agreement and Collective Agreement are in place and is based on the type of contract and reason for termination.  

Notice Period

The period of notice is determined following the Employment Contracts Act; the employer and the employee may agree on the periods of notice no longer than six months. Collective agreements may contain provisions on periods of notice. Suppose the periods of notice laid down in the collective agreement differ from the statutory periods of notice. In that case, the employer and the employee must observe the periods of notice laid down in the collective agreement.

The amount of notice is dependent on the length of service and reason for termination. If the employer terminates the contract, the notice period is as follows.

• Up to one year employment – 14 days’ notice
• One to four years of employment – one months’ notice
• Four to eight years of employment – two months’ notice
• Eight to 12 years of employment – four months’ notice
• Over 12 years of employment – six months’ notice

If the employee terminates the contract, the notice period is as follows.

• Up to 5 years of employment – 14 days’ notice
• More than five years of employment – 1-month notice

Severance Pay

There is no statutory severance pay in Finland.

Probation Period

In Finland, the probationary period cannot exceed six months.

Common Benefits

General

Mobile allowance, internet allowance, fitness and wellness allowance, car allowance, housing allowance, and meal vouchers.

VISA

VISA

Citizens of the Nordic countries (Sweden, Norway, Denmark, and Iceland) may freely enter Finland and reside without a residence permit. They can also take up paid employment without a residence permit for an employed person.

EU citizens and citizens of Iceland, Liechtenstein, Norway, and Switzerland have the right to enter, reside, study, seek work, or practice a profession in Finland for three months without a residence permit. If the stay lasts longer, they must register their right to reside in Finland at a police department.  

Persons from outside EU Area require a work permit and residence permit. Several categories depend on job grade and status. Highly skilled professionals with a job offer in Finland must apply for a specialist permit. Persons residing outside the European Economic Area (EEA) may also need a permit from the National Board of Patents and Registration to serve in a managerial position or carry out other responsibilities in a business.

VAT

General

The standard rate of VAT in Finland is 24.00%.