What do you need to know to hire in Finland?
Finland sets no single minimum wage. Sector collective agreements set the pay floor instead, while the employer pension contribution alone runs 17.1% of wages. Annual leave is 5 weeks, and the standard week is capped at 40 hours. Each guide below takes one layer.
· Finland guide
How does Teamed handle Finnish hiring for you?
Teamed becomes your legal employer of record in Finland for from $599 per employee per month, with zero FX mark-up in any currency.
Payroll, contracts, and the full Finnish employment law stack run on one platform.
Real HR and legal experts manage every Finnish hire, from the first offer letter through to the final payslip. An actual person, not a chatbot or a pooled queue, handles your Finnish team alongside contractor onboarding and entity payroll on one platform. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice, so the pension and insurance lines are visible, not buried.
A Finnish contractor who converts to employment keeps their record, and that same employee can graduate from EOR to your own Finnish entity without re-onboarding. Run the Crossover Calculator to see the month the model flips. EOR is the right model for a first Finnish hire, until it isn't.
- Finland has no statutory minimum wage at all. The pay floor comes from the generally binding (yleissitova) collective agreement for the sector, so the legal minimum for a software engineer and a warehouse worker are set by different documents. Most EOR guides quote a national figure that does not exist here. The hiring guide shows how to read the right agreement before you set a salary.
- There is no general statutory severance payment either. The Employment Contracts Act 55/2001 carries no redundancy formula. The only payout on a clean exit is the notice period itself, paid out if you release the person early. Compensation appears only when a court finds the dismissal unjustified, which runs from 3 months to 24 months of pay.
- The employee pension rate stopped being age-banded in 2026. Every worker now pays the same 7.3% TyEL share, where 2025 split it by age. The employer pays 17.1% on top, so total pension is 24.4% of payroll. The tax and payroll guide sets out every 2026 rate.
Employer contributions in Finland add roughly 20 to 21 percent on top of gross salary. The largest single piece is the earnings-related pension (TyEL) at 17.1%.
On top of pension, the employer pays health insurance at 1.91%, unemployment insurance from 0.31%, and accident insurance averaging 0.7%.
Finland sets no minimum wage in law. The pay floor comes from the sector collective agreement. Payroll runs monthly, with pay due on the last day of the period.
Teamed runs Finnish payroll, contracts, and compliance through a vetted local partner entity. This page is the map. Each guide below is the detail.
Zero FX. No setup fees. 48-hour onboarding. The price your finance team can forecast against without an asterisk.
How much does it cost to hire an employee in Finland in 2026?
A Finnish hire costs roughly 120 to 121 percent of gross salary once employer contributions are added.
Pension is the biggest line at 17.1%. Health insurance adds 1.91%, and unemployment insurance starts at 0.31%.
The employer pays earnings-related pension (TyEL) at 17.1% of wages, health insurance at 1.91%, unemployment insurance at 0.31% on payroll up to 2,509,500 EUR, accident insurance averaging 0.7%, and group life insurance at 0.06%. There is no single national wage to anchor against, so each cost runs against the salary the sector agreement sets. Teamed's Finland fee sits inside the total cost envelope, not outside it.
Teamed's Finland price is a starting rate, with zero FX in any currency pairing. No setup fees. No exit fees. Salaries, taxes, and benefits passed through at cost on every invoice.
The full breakdown, with worked examples at current 2026 rates, is in the cost guide.
Do you need a Finnish entity to hire employees in Finland?
No. An Employer of Record runs Finnish payroll and contracts from day one.
Your own Finnish entity becomes cheaper than EOR somewhere around 5 to 8 employees, depending on salary.
Registering a Finnish limited company means incorporation at the Finnish Patent and Registration Office, a Tax Administration registration for employer payroll, a TyEL pension contract with an authorised provider, and statutory accident and unemployment insurance. Setup and the ongoing monthly filings take real local time. An Employer of Record is faster and cheaper at low headcount. Teamed runs Finnish payroll, contracts, and compliance through a vetted local partner entity from day one.
The crossover point depends on Finnish salary levels and your local accounting costs. For most professional-services roles it lands around 5 to 8 employees. The EOR vs entity guide runs those numbers.
Most EOR providers will not tell you when you have crossed it. We do, and we help you move. You progress from contractor to EOR to your own Finnish entity on one platform under Teamed's Graduation Model, with tenure preserved.
What changed in Finnish employment law recently?
The 2026 state income tax scale was reformed, lowering the top state marginal rate to 37.5%.
From 2026 the employee pension share was standardised to 7.3% for everyone, replacing the old age-banded split.
The 2026 state income tax scale (Laki vuoden 2026 tuloveroasteikosta 1140/2025) runs in five bands, from 12.64% on the first 22,000 EUR up to 37.5% on income over 52,100 EUR. The employee TyEL pension share is now a flat 7.3% for all ages, where 2025 charged older workers more. Employer-side rates also moved for 2026: health insurance rose to 1.91%, and employer unemployment insurance rose to 0.31% on the lower payroll band.
The 2022 family leave reform still sets the parental model: a 40 days pregnancy allowance, then 160 days of parental leave per parent, part transferable. The hiring and tax guides cover each current rate and threshold in detail.
What benefits must you provide Finnish employees in 2026?
The statutory floor is 5 weeks of paid annual leave and a standard week of 40 hours.
Employer-paid sick pay runs to the end of the 9 days after the employee falls ill, once they have a month of service.
Statutory annual leave is 5 weeks under the Annual Holidays Act 162/2005, taken as four weeks in summer and one in winter, accruing at 2 to 2.5 days per month with service. The standard working week is 40 hours under the Working Hours Act 872/2019, and many white-collar collective agreements set 37.5 hours instead. Work on a Sunday or a church holiday carries a 100% pay premium.
On the family side, a 40 days pregnancy allowance precedes 160 days of parental leave per parent, part transferable, funded through Kela. Employer-paid sick pay runs at full pay to the end of the ninth day after falling ill once service reaches one month, then Kela's allowance takes over. Finland sets no minimum wage and no thirteenth-month salary in law, so the pay floor and any holiday bonus come from the sector collective agreement. The benefits guide covers each entitlement in full.
Read the full Finland benefits guide
What are payroll taxes in Finland in 2026?
Employer TyEL pension is 17.1% and employer health insurance is 1.91%.
Employees pay state income tax on a five-band scale, from 12.64% up to 37.5% on income over 52,100 EUR.
On the employer side, Finland charges TyEL pension at 17.1%, health insurance at 1.91%, unemployment insurance at 0.31% on payroll up to 2,509,500 EUR, accident insurance averaging 0.7%, and group life insurance at 0.06%. The employee pays a TyEL pension share of 7.3%, unemployment insurance of 0.89%, and a health care contribution of 1.1% on wage income.
State income tax is progressive across five bands. It starts at 12.64% on the first 22,000 EUR and reaches 37.5% on income over 52,100 EUR, on top of municipal tax. A public broadcasting (Yle) tax of 2.5% applies above 15,150 EUR, capped at 160 EUR. Teamed payroll handles every employee deduction and the monthly remittance to the Tax Administration. The tax and payroll guide sets out every band and threshold.
How do you terminate an employee in Finland?
Notice runs by tenure, from 14 days in the first year to 6 months after 12 years.
There is no statutory severance. The only payout on a fair exit is the notice period, paid out if you release the person early.
Employer notice scales with service under the Employment Contracts Act 55/2001: 14 days up to one year, then one month, two months, four months, and 6 months once service passes 12 years. The employee resigning gives 14 days up to five years of service. A trial period of up to 6 months can be agreed at the start, during which either side can end the contract on shorter terms.
Finland has no general statutory severance or redundancy formula. A fair dismissal needs a valid ground and the right notice, with notice paid out if the person leaves early. Where a court finds the dismissal unjustified, it awards compensation from 3 months to 24 months of pay, rising to 30 months for elected employee representatives. The termination guide runs the full process.
What should you know before hiring in Finland?
Two things catch US buyers out. The first is that there is no national minimum wage to set salaries against.
The second is that an unjustified dismissal can cost up to 24 months of pay, even though there is no severance formula.
The pay floor lives in the sector collective agreement, not in one wage law. Finland sets no minimum wage at all. The generally binding agreement for your sector sets the minimum, so a developer, a nurse, and a driver are floored by three different documents. Read the right one before you name a salary, or the contract can be challenged. The hiring guide shows how.
No severance does not mean a cheap exit. There is no redundancy formula, but a dismissal without a valid ground exposes you to a court award of 3 months to 24 months of pay. Employers of 30 or more staff also carry a standing duty: an equality plan and pay survey every two years (Act on Equality between Women and Men). The hiring guide and the termination guide both cover safe process in detail.
Frequently asked questions
How much does it cost to hire an employee in Finland?
Plan on roughly 120 to 121 percent of gross salary once employer contributions are added. The largest is the earnings-related pension (TyEL) at 17.1%, with health insurance at 1.91%, unemployment insurance from 0.31%, and accident insurance averaging 0.7%. Teamed's Finland fee is one flat number per employee per month, with zero FX mark-up in any currency pairing. The cost breakdown guide has worked examples.
Is there a minimum wage in Finland?
No. Finland sets no statutory minimum wage. The pay floor comes from the generally binding (yleissitova) collective agreement for the sector, so the legal minimum depends entirely on the role and industry. Before you set a salary, you read the agreement that binds the work, not a national rate. The hiring guide shows how to find the right one.
Can a US company hire in Finland without an entity?
Yes. An Employer of Record like Teamed runs Finnish payroll, contracts, and compliance through a vetted local partner entity. You direct the work. Teamed becomes the legal employer of record. Setup takes 48 hours once terms are confirmed. Registering your own Finnish company means incorporation, a Tax Administration employer registration, a TyEL pension contract, and statutory insurance, which take far longer.
What is the statutory notice period in Finland?
Employer notice scales with service under the Employment Contracts Act 55/2001: 14 days up to one year, one month from one to four years, two months from four to eight years, four months from eight to twelve years, and 6 months beyond twelve years. An employee resigning gives 14 days up to five years of service. Collective agreements may set different terms.
Does Finland require severance pay?
No. Finland has no general statutory severance or redundancy payment. The Employment Contracts Act carries no severance formula. On a fair exit, the only payout is the notice period, which can be paid out if the employee is released early. If a court finds the dismissal unjustified, it awards compensation from 3 months to 24 months of pay.
What is the minimum annual leave for a Finnish employee?
Statutory annual leave is 5 weeks under the Annual Holidays Act 162/2005, taken as four weeks in summer and one in winter. Leave accrues at 2 to 2.5 days per month depending on length of service, reaching around 30 working days a year. The standard working week is 40 hours under the Working Hours Act 872/2019.
Finland reads as light-touch on paper. No minimum wage, no severance formula, no thirteenth month. The catch is that the real obligations sit one layer down, in the sector collective agreement and in the unjustified-dismissal rule. Get the agreement wrong and the salary floor is wrong. Get the dismissal ground wrong and a clean-looking exit turns into a claim worth months of pay. Neither shows up in a national rate table, which is exactly why they catch new employers.
Finland has no minimum wage and no severance formula, yet the employer still pays roughly 20 percent on top of salary in pension and insurance.
The cost surprises live in the sector agreement, not the statute.
Read the right Finland guide before the first hire, not after the first claim.
