Finland

Contract Types

In Finland contracts can be Fixed Term, Indefinite or Hybrid. Fixed Term contracts are only legal if for a justified reason which must be stated in the contract and such contracts cannot be terminated before the end date by either party unless the contract includes a termination clause. Justified reasons include project or seasonal work.

Hybrid contracts are fixed term contracts which allow termination or indefinite contracts which end on a specifically agreed occasion, eg when an employee returns from maternity leave.

Contracts are usually governed by the Collective Bargaining Agreement (CBA).

Probation          

The probation period is 6 months but depends on the CBA. The probation period cannot be extended. For Fixed Term contracts the probation period cannot  be more than half the length of the contract.

Working Hours

Normal working hours are 37.5 to 40 hours over a 5 day week depending on the CBA.

Overtime

Hours in excess of contracted hours are paid at a rate of 150% for the first 2 hours and 200% thereafter unless there is agreement to time off in lieu. The contract or CBA should set  out overtime conditions. Employees can refuse to do overtime. An average of 48 hours over 4 months is the maximum that can be worked.

Other Financial

There is no 13th month salary requirement in Finland but it is common to pay one before the employee’s holiday. Some CBAs will provide for a 13th month salary.

Other   

If an employee has a non compete clause in their contract then they are due compensation for the period of the non compete, should they resign or be terminated, even for just cause.

Tax rates valid for: 2024

Corporation Tax: 20%   

Consumption Tax: 24%

25.5% from 1 September 2024  

Employers’ Social Security:

27.6% to 29.14%             

Employees’ Contributions:

15.97% to 23.67%           

Income Tax Rates:          

Up to 20,500 – 12.64%

20,500 to 30,500 – 19%

30,500 to 50,400 – 30.25%

50,400 to 88,200 – 34%

88,200 to 150,000 – 42%

Over 150,000 – 44%

Notice  

Unless the CBA states otherwise, notice for employers is dependent on service:

• Up to 1 year – 14 days
• 1 year to 3 years – 1 months
• 4 years to 7 years – 2 months
• 8 years to 11 years – 4 months
• Over 12 years – 6 months

For employees the notice period is 14 days with up to 5 years’ service and 1 month thereafter unless the contract or CBA stipulates otherwise.

During Probation            

No notice is required during probation.

Dismissal

Employers should always have proper grounds for dismissal and be able to provide evidence, for example, that they have informed the employee and given them a chance to improve.

If the termination is for financial reasons, eg restructuring, then with under 20 employees the employer should consult the affected employees to attempt to reduce the dismissals, eg through part time working.

Severance

No severance is required.

Paid Public Holidays: 11 (13 in practice)

2024 Date

New Year’s Day – 1st January

No Day Given in Lieu

Epiphany – 6th January

No Day Given in Lieu

Good Friday – 29th March

Day Given in Lieu – N/A

Easter Monday – 1st April

Day Given in Lieu – N/A

May Day – 1st May

No Day Given in Lieu

Ascension Day (Thursday 40 days after Easter) – 9th May

Day Given in Lieu – N/A

Mid Summer’s Eve* – 21st June 

No Day Given in Lieu

Mid Summer’s Day – 22nd June

No Day Given in Lieu

All Saints’ Day – 2nd November

No Day Given in Lieu

Independence Day – 6th December

Yes – Day Given in Lieu

Christmas Eve* – 24th December

No Day Given in Lieu

Christmas Day – 25th December

No Day Given in Lieu

Boxing Day – 26th December

No Day Given in Lieu

Comment          

Public holidays falling on Sunday not included. *these holidays are not statutory but are almost always given.

Paid legal entitlement (working days)   

In Finland, the holiday year runs from April to March and employees accrue holiday at the rate of 2 days per month for each complete month during their first year. Thus annual entitlement is 24 days per year during the first year. After this, and up to 15 years’ service, leave accrues at the rate of 2 ½ days per leave earning month, being 30 days. Thereafter it accrues at the rate of 3 days per month (36 days per year). A leave earning month is defined as a month during which the employee worked at least 14 days or 35 hours. Note that Saturdays are included for the purposes of leave, even when the employee does not work on a Saturday, so a full week’s vacation is 6 days.

The CBA may provide for more leave. The Holiday Act provides for 24 days (4 weeks) to be taken between May and September in one block, unless there are operational reasons not to grant this. Similarly additional days taken during the winter period should be taken in one block. Any CBA will override the Holiday Act. Holiday pay is payable depending on the CBA.

Carry over permitted     

Any leave over 24 days may be carried over, or more by agreement, unless the CBA covers carry over. The employee can choose when to use the carried over holiday.

Holiday Allowance         

The CBA will govern the payment of holiday pay. The usual salary is payable but this may be payable before the employee takes his holiday. CBAs may provide for a holiday bonus of 50% of the salary due including any usual additions. This is not a legal requirement but will depend on the CBA in place.

Sick       

After 9 days of sickness (generally) paid by the employer, employees become eligible for sickness allowance from the government. Most employers will also top up the sickness allowance for 1 to 2 months. After 2 months of sickness further evidence is required in order for the sickness allowance to continue. In total, sickness allowance is available for 300 days over a 2 year period.

Maternity          

New mothers are entitled to 105 working days of maternity leave, which can start between 50 and 30 working days before the due date. Maternity allowance is paid during this time.

Paternity

New fathers can take 54 working days leave after the birth. Of these 54 days, only 18 can be taken at the same time as the mother. Paternity allowance is paid during this time.

Parental Leave

Additionally, each parent is entitled to 160 working days of parental leave. Up to 63 days maybe transferred to the other parent. This leave is available until the child is 2 (or until 2 years after the adoption) and can be taken in up to 4 blocks, each being a minimum of 12 working days. Parental allowance is paid during this time.

Adopting parents are also entitled to parental leave.

Employees should give notice of the intention to take such leave a minimum of 2 months in advance. Employees can also apply to the employer to work part time; if they refuse, then they must justify this in writing.

Annual leave is accrued as normal during these leaves.

Child Care Leave

This is unpaid and can be taken up until the child is 3. The CBA may provide for other leaves.

Medical Insurance         

Finland has a very high-quality public health system and private medical insurance is rare.

Pension

Common benefits provided in Finland are company bicycles, holiday bonus, internet, gym, transport and housing allowances.