Running payroll in Finland requires more than setting up a payment schedule. The country’s labour market is shaped by a dense network of collective agreements, statutory employer contributions, and a tax withholding system tied to each individual employee’s personal tax card. If you’re hiring Finnish talent for the first time, this guide covers what you need to know before your first payroll run.
Employment contracts and working hours
Every employment relationship in Finland must be backed by a written contract. Finnish employment law sits within a framework that combines the Employment Contracts Act and, in most industries, a sector-specific collective agreement.
Written employment contracts
A written contract is required and must cover job duties, salary, working hours, leave entitlements, and notice periods. Even when a collective agreement fills in some of the blanks, the individual contract must still be in place. There’s no valid workaround for this requirement.
Working hours
Standard working hours in Finland are 37.5 to 40 hours per week, depending on the sector. The statutory maximum is 40 hours per week. Overtime is regulated under the Working Hours Act, and any overtime arrangements must comply with both that act and any applicable collective agreement for the industry.
Collective agreements and minimum wage
Finland doesn’t have a statutory national minimum wage. Instead, wages are set through sector-level collective agreements known as työehtosopimus, or TES. This is one of the first things a foreign employer needs to establish: whether a TES applies to the industry you’re hiring in, and if so, which one.
How tes works
A collective agreement sets minimum wage floors, working time norms, holiday entitlements, and other conditions for workers in a given sector. The agreements are negotiated between employer federations and trade unions, and they’re legally binding on employers who are members of the relevant employer organisation. For employers outside those organisations, the so-called generally applicable (yleissitova) agreements still apply if the sector is covered by one.
If a TES applies to your industry, you must follow it even if your employment contract offers more favourable terms than the statutory baseline. In practice, most blue-collar and many white-collar sectors are covered.
Typical wage levels
In sectors without a directly applicable TES, or for roles above the minimum thresholds, wages are negotiated individually. Typical rates across covered sectors tend to fall in the range of €11 to €14 per hour, though this varies significantly by industry and role level.
Payroll frequency and pay structure
Payroll in Finland runs monthly. Most employees are paid once per month, typically toward the end of the month or on the last working day. There’s no legal requirement for a different cadence, and monthly payroll is the standard across both private and public sectors.
13Th month salary
Finland doesn’t have a statutory 13th month payment. Whether one is paid depends on the employment contract or the applicable collective agreement. Some agreements include a so-called holiday bonus (lomaraha), which is distinct from the 13th month concept, but no blanket national obligation exists to pay an additional monthly salary.
Holiday pay and holiday bonus
Employees accrue annual leave under the Annual Holidays Act. The holiday bonus, or lomaraha, isn’t a statutory national requirement, but it’s near-universal in practice because it appears in the majority of collective agreements. It’s typically set at 50% of the employee’s holiday pay and is paid out when the employee takes their leave.
On termination, any accrued but untaken annual leave is paid out as a holiday allowance, known as lomakorvaus.
Employer contributions in 2026
Finnish payroll carries a meaningful employer-side cost on top of gross salary. The contributions below apply for 2026 and are remitted monthly alongside payroll.
Breakdown of employer contributions
- TyEL pension insurance: The total pension contribution rate is 24.85%, split between employer and employee. The employer’s share is approximately 17.10%; the employee’s share of 7.30% is deducted from gross wages and remitted by the employer.
- Health insurance: 1.91% of gross wages, paid by the employer.
- Unemployment insurance: 0.31% on payroll up to €2,509,500; 1.23% on the portion above that threshold.
- Accident insurance: Approximately 0.70%, though the exact rate depends on the insurer and the risk category of the work.
In addition to the employer contributions above, the employer deducts from the employee’s gross wages: TyEL pension at 7.30%, unemployment insurance at 0.89%, and advance income tax at the rate on each employee’s personal tax card.
Tax withholding and the tax card
Finland uses a pay-as-you-earn income tax system called ennakonpidätys, which translates to advance tax withholding. The employer is responsible for withholding income tax from each payslip and remitting it to the Finnish Tax Administration, known as Vero.
The tax card (verokortti)
Each employee obtains a personal tax card from Vero, which specifies their individual withholding rate. This rate takes into account the employee’s projected annual income, deductions, and other personal factors. The employee submits this card to the employer at the start of employment, and the employer withholds at the rate shown.
If an employee doesn’t provide a tax card, the employer is required to withhold at a default rate of 60%. That’s a significant deduction, so it’s worth having an onboarding process that prompts employees to provide their card before the first payroll run.
Filing and remittance
Advance tax is remitted monthly to Vero. All employer tax and contribution filings are handled through the OmaVero portal, which is Vero’s online filing system. Payroll reports are submitted via the Incomes Register (tulorekisteri), a centralised system introduced in 2019 that requires employers to report each payroll payment within five calendar days of payment.
Running finnish payroll as a foreign employer
Foreign companies don’t automatically have the right to run payroll in Finland. To employ staff directly, you typically need to establish a legal entity in Finland, which carries registration obligations, ongoing compliance requirements, and administrative overhead.
An alternative is to use an Employer of Record (EOR), which employs the worker in Finland on your behalf. The EOR handles the employment contract, payroll processing, tax withholding, employer contributions, and compliance with the applicable collective agreement. For companies hiring one or a few people in Finland without wanting to set up a local entity, EOR services are often the most practical route.
FAQ
Does Finland have a national minimum wage? No. Finland doesn’t have a statutory national minimum wage. Minimum pay is set by sector-level collective agreements (TES). If a generally applicable agreement covers your industry, you must meet its minimum rates regardless of whether you’re a member of the relevant employer federation.
How often do employers run payroll in Finland? Payroll runs monthly in Finland. Employees are paid once per month, and advance tax and employer contributions are remitted to Vero on a monthly basis.
What happens if an employee doesn’t provide a tax card? If an employee doesn’t submit a personal tax card (verokortti) to the employer, the employer must withhold income tax at a default rate of 60%. Employees should be prompted to retrieve their card from the OmaVero portal and submit it before the first pay date.
Can a foreign company hire in Finland without setting up a local entity? Yes, through an Employer of Record. An EOR acts as the legal employer in Finland, handling payroll, tax filings, contributions, and compliance on your behalf. This lets you hire Finnish employees without incorporating a local company, which makes it a common approach for companies testing a new market or managing a small headcount.
