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overview
Finland
CurrencyEuro (EUR)
CapitalHelsinki
Official languageFinnish
Time zoneGMT +2
Working hours40 hours
Public holidays13 Days (2026)
Payroll frequencyMonthly
Minimum monthly salaryN/A
Date formatdd/mm/yyyy
Payroll and benefits in Finland
As in all countries, payroll in Finland is subject to certain rules and requirements. These are largely defined by Finnish labour law. However, collective bargaining agreements also often contain provisions concerning payroll, which employers need to be aware of. Since almost 90% of Finnish workers are covered by a collective agreement, it’s quite likely that one will impact your operations in Finland.
Employers that want to run payroll in Finland need to know which collective agreement applies to their workers. They also need to understand the intricacies of taxes and social security contributions, including how much to withhold from employees’ salaries and where to remit payment. Lastly, employees need to know about the mandatory benefits they’re required to provide for their employees so they can ensure compliance with the law. We’ll cover everything you need to know about payroll and benefits in Finland in this guide.
Minimum wage in Finland
There is no national statutory minimum wage in Finland (2026). While this is unusual for a European country, Finland follows a similar model to some of its Nordic neighbors. Instead of a single national minimum wage, minimum pay levels are set by sector through collective bargaining agreements (CBAs) negotiated between employers’ associations and trade unions.
These sectoral minimum wages are often universally binding, meaning they apply to all employees in the sector, even if the employer or employee is not formally covered by the collective agreement. As a result, around 90% of employees in Finland are covered by a collective agreement, including all public-sector workers.
Employees who are not covered by a collective agreement are legally entitled to a salary that is customary and reasonable for their sector and role.
What counts towards the minimum wage in Finland?
When determining compliance with minimum pay requirements in Finland, only the base salary counts toward the sectoral minimum wage. Employers must ensure that the employee’s base pay meets or exceeds the applicable minimum rate defined in the relevant collective agreement.
Additional payments and benefits do not count toward the minimum wage, including:
- Overtime compensation.
- Evening, night, weekend, or shift premiums.
- Bonuses or performance-related pay.
- Benefits in kind.
These payments are typically paid on top of the base salary, in accordance with collective agreements and employment law.
Minimum wage in Finland for international students
There is no specific minimum wage for international students in Finland. Students who work alongside their studies must be paid at least the minimum wage applicable to their sector, as defined in the relevant collective agreement. If no collective agreement applies, they are entitled to a wage that is considered reasonable and customary within the sector.
Payroll in Finland
There are certain things that employers need to know before running payroll in Finland. Read on for our guide to the basics.
Basics of payroll in Finland
The payroll cycle in Finland is typically monthly, with employees receiving their wages on the last day of the month. However, employers and employees can agree on a shorter pay cycle. The tax year in Finland is the same as the calendar year, running from 1 January to 31 December. The local currency is the euro (€).
Employers in Finland must provide employees with an electronic or paper payslip each pay cycle. This must include the following key information:
- The employer’s information.
- The employee’s information.
- The pay period.
- The pay date.
- Details of the employee’s basic salary, bonuses, and allowances.
- Any overtime pay.
- Details of fringe benefits.
- Taxes, social security payments, and other deductions.
Finland payroll tax
There are two forms of income tax in Finland: national tax and local (municipal) tax. Members of certain religious institutions also have to pay church tax. National tax is charged on a progressive scale depending on the employee’s income, with rates varying from 6% to 31.25%. Local tax is paid at a flat rate that varies by municipality.
Withholding taxes from employees’ wages is an important part of running payroll in Finland. Normally, each employee has a tax card stating how much tax should be withheld. If an employee doesn’t have a tax card, employers should withhold a flat rate of 60%.
Tax in Finland is payable on wages, salaries, bonuses, stock options, and other forms of compensation. It must be paid to the Finnish Tax Administration no later than the 12th of the month following the payroll run. Employers also must file an ‘earnings payment report’ stating the total salaries paid within five days of each payday.
Social security contributions in Finland
Both employers and employees in Finland pay contributions to the social security institute of Finland, Kela. This applies to both resident employees and non-residents who are not covered by social security in another country. Kela pays for things like pensions, health insurance, and unemployment insurance. Contribution rates for both employers and employees are adjusted annually. In addition, employers have to pay for occupational accident insurance and group life insurance.
Employers are responsible for withholding employee contributions from their wages and remitting them along with their own contributions. Health insurance payments must be paid to the local tax authority by the 12th of the following month, and unemployment insurance contributions are paid quarterly. All other payments are due to the relevant insurance provider.
13th salary in Finland
Unlike in some other European countries, the 13th salary is not mandated by law in Finland. However, it’s common for employees to receive bonuses, which are usually paid in conjunction with their holidays.
Other requirements for payroll in Finland
Payroll in Finland must be run at least once a month. Unless otherwise agreed, employees should receive their pay on the last day of the agreed pay period. Employers must make payments directly to the employee’s bank account. Although there is no formal requirement for payments to be made in euros, this is generally easier since reporting has to be completed in euros.
Statutory benefits in Finland
In Finland, employees benefit from a robust social security system, which is paid for through contributions from both employers and employees. The Finnish social security institute is called Kela, and it handles things like pensions, health insurance, and unemployment insurance. There are also other benefits that employees are expected to provide directly.
Social security benefits in Finland
All employers and employees in Finland make contributions to the social security system, covering pensions, health insurance, and unemployment insurance. Employers are also required to provide:
- Group life insurance: This is mandatory for many employers based on the collective bargaining agreement that applies. It provides protection for employees’ families in the case of death.
- Occupational injury insurance: Similarly, employers must provide employees with occupational injury coverage, which offers protection in case of accidents at work.
Other mandatory employee benefits in Finland
In addition to the benefits provided through Kela, employers in Finland must provide at least the following statutory benefits:
- Redundancy, termination, and severance: There are specific rules that apply to the termination of employment contracts in Finland, which employers must abide by.
- Working hours: Employees in Finland should work a maximum of 40 hours per week or eight hours per day. They also have the right to breaks and rest periods between shifts.
- Overtime: Employees in Finland are entitled to additional pay when they work overtime. Rates are set by collective bargaining agreements or individual employment contracts.
- Leave: Employees are entitled to leave in various situations, such as when they are sick or when they have a baby. All employees are also entitled to a minimum of five weeks of paid holiday each year.
Collective bargaining agreements and employee benefits in Finland
Collective bargaining agreements play a significant role in shaping the labour market in Finland, providing coverage for almost 90% of employees. Collective agreements might include provisions for additional benefits or strengthen statutory benefit entitlements, for example by providing for more paid leave. Employers in Finland need to understand the requirements of the specific agreement that applies to their employees.
Other employee benefits in Finland
Employers in Finland can choose to provide additional benefits to their employees. Though these are not mandatory, they can help to improve employee engagement and attract and retain talent. Below are some of the most common additional employee benefits in Finland.
Extra paid holidays
While all employees in Finland are entitled to a minimum of five weeks of paid holiday per year, some employers choose to provide more. This can be a valuable employee benefit that helps employees to improve their work-life balance.
Bonuses
Many employers in Finland offer their employees annual bonuses. While these aren’t required by law (as they are in some countries), they can help to motivate employees and improve their performance. Some companies also implement profit-sharing schemes to give employees a stake in the business.
Additional pension contributions
Employees in Finland are entitled to the state pension when they retire. Some employers choose to offer private pensions as an additional benefit, helping employees to better save for the future.
Stock options
Employers in Finland may choose to grant their employees stock options or set up other employee share schemes. This can help to tie employees’ motivations to the company’s goals, ultimately improving performance. Since these increase in value over time, they can also be a valuable employee benefit in Finland.
Other benefits
Like in all countries, there are almost limitless ideas for benefits you could offer to your employees in Finland. For example, you could consider providing things like:
- Company cars.
- Meal vouchers.
- Personal development opportunities.
- Wellness benefits.
- Flexible/remote work.
Compliant, seamless payroll and benefits in Finland and beyond
Getting payroll and benefits right is not just a legal issue. Every country also has its own customs, norms and expectations about employee compensation. And if your operations aren’t in line with your workers’ expectations, they may not stick around for long.
Thankfully, we know what we’re doing. When you work with CXC to engage workers in Finland, we’ll handle everything from tax withholding to employee bonuses on your behalf.
Want to find out more?
FAQ's
How does payroll work in Finland?
Employers running payroll in Finland work out each employee’s earnings, deduct tax and the employee’s insurance contributions, then pay the remaining amount and report the pay details to the Incomes Register (Tulorekisteri).
The contract and collective agreement determine pay and payment dates. Monthly salaries are normally paid once a month. Each employee receives a payslip showing their earnings, deductions and how the amount was calculated. Bonuses, taxable benefits and other variable payments also need to be included correctly.
Payroll uses the employee’s tax-card rate and income limit. Employee pension and unemployment contributions are deducted separately where they apply. Employers also fund their own contributions, which are additional employment costs.
Earnings reports are generally due within five calendar days of payment. Where required, the employer’s separate monthly report is due by the fifth day of the following month. Under the ordinary monthly schedule, withholding and employer health insurance contributions are paid by the twelfth. Other insurance premiums go to the relevant organisations.
What are the steps to set up payroll in Finland?
Setting up payroll in Finland involves establishing employer registrations and insurance, collecting employee information and configuring pay around the correct collective agreement.
The company first needs to confirm which business will employ the staff and whether employer registration is required. Foreign employers can have different registration and withholding duties. Pension and other required insurance, together with preventive occupational healthcare, also need to be arranged.
Payroll needs the employee’s identity, bank and tax-card information and their social-insurance status. The role’s classification determines the relevant minimum pay and supplements. Hours, payment dates, benefits and leave accrual must also be reflected in the system.
The employer or provider needs access and authorisation to report to the Incomes Register. Approved payroll data, payments and reporting need a clear process before the first run. Where ordinary tax withholding applies, the employer generally withholds 60% if tax-card data is unavailable. Non-resident tax-at-source arrangements and employers without withholding duties follow separate rules.
Can a foreign company run payroll in Finland without a local entity?
Yes, a foreign company can run payroll in Finland without setting up a local entity. The company can manage payroll in-house or ask a payroll provider to handle the administration.
If the company has no taxable business presence, known as a permanent establishment, it normally does not deduct income tax unless it registers voluntarily. Employees staying more than six months generally pay the tax themselves through prepayments. Employees need clear guidance on their prepayment responsibilities.
The company can choose to join the employer register and deduct tax using each employee’s tax card, as a Finnish employer would. It then takes on the full duties of a registered employer. If it has a permanent establishment, it must deduct tax.
Reporting to the Incomes Register and Finnish earnings-related pension insurance (TyEL) have separate coverage tests. A valid A1 certificate or an applicable social security agreement can keep an employee insured outside Finland. Income-tax withholding does not determine social-insurance coverage.
A team working locally can also create a taxable business presence. Other options include setting up a local entity or using an employer of record, which handles tax deductions, reporting and insurance as the employer.
What are the signs a company should outsource payroll in Finland?
A company may benefit from outsourcing payroll in Finland when corrections, reporting deadlines or gaps in local knowledge put pressure on HR and finance. Mistakes also create risks, including underpaid employees, incorrect reports and missed deadlines.
Repeated errors in collective agreement pay rises, job classifications or overtime calculations are clear signals. So are benefits and absence changes reaching payroll too late, or new employees needing their first payslip corrected.
Growth can expose other gaps. Finance may be trying to reconcile records across several countries, while no one clearly owns Finnish reporting deadlines. A payroll provider can coordinate calculations, payslips, reporting and employee pay questions, helping reduce errors and delays.
The company still needs to supply and approve accurate hours, salary changes and other information, and provide funding on time. The payroll provider handles administration while the company remains the employer and retains its responsibilities. Outsourcing payroll does not require changing who employs the team.
What payroll taxes must employers pay in Finland?
Employers running payroll in Finland pay employer health insurance, pension and unemployment contributions, as well as other required insurance premiums. Where withholding is required, employers deduct the employee’s income tax from wages; it is not an additional employer cost.
For Finnish-insured private-sector employment, the main 2026 employer rates are as follows.
- Health insurance is 1.91% of wages subject to the contribution.
- The employer pension share averages 17.10% for employers with insurance contracts. The actual premium depends on their insurance arrangements.
- Unemployment insurance is 0.31% of annual wages subject to the contribution up to 2,509,500 EUR, and 1.23% on the excess.
Occupational accident premiums depend on earnings and work risks. Group life cover is required where the relevant agreement provides for it. Age, earnings and insurance coverage affect which contributions apply.
Employers also deduct the employee’s 7.30% pension and standard 0.89% unemployment contributions where applicable. For resident taxpayers, employee health contributions are normally included in the tax-card rate. Non-resident tax-at-source cases may require separate withholding. These employee charges are separate from the employer’s own health insurance contribution.
What statutory benefits must employers provide in Finland?
Required employee benefits in Finland include preventive occupational healthcare, relevant social insurance, paid annual leave and sick pay for eligible employees. Collective agreements often give employees more than the legal minimum.
Employers must arrange and pay for preventive occupational healthcare. They can also include general medical treatment, but this is optional unless the employment terms require it.
Employers must arrange earnings-related pension insurance and accident and unemployment cover where required. Group life insurance is required under certain collective agreements, rather than for every employee.
Employees normally earn two or 2.5 days of annual leave per qualifying month, depending on how long they have been employed. Saturdays generally count as leave days.
Sick pay depends on eligibility and length of employment. Family leave does not automatically come with full employer-paid salary, although collective agreements may require it. Agreements can also require holiday bonuses. Employers can choose to offer extra medical, meal and commuting benefits.
What is the minimum wage in Finland?
The minimum wage in Finland depends on the collective agreement covering the work. There is no single national rate. Employers use the employee’s actual duties to find the right job classification and its minimum pay.
A generally binding agreement covers employers across its sector, including companies outside the employers’ association that signed it. The employee’s recognised experience, work location and contracted hours can also affect the minimum amount.
The agreed salary cannot fall below that minimum. Employers may also need to pay extra for shifts, weekend work and overtime. The agreement’s rules determine whether a particular benefit can count towards minimum pay.
If no collective agreement applies, the employer and employee agree the salary. If they have not agreed an amount, the employer must pay what is customary and reasonable for the work. Residence permits can have separate salary requirements, but these apply to immigration eligibility and do not set a minimum wage for every employee.
What are the minimum wages set by collective agreements in Finland?
The commerce agreement gives an example of how the minimum wage in Finland varies by role and location. For group B professional roles in the second year pay band, the monthly minimum is EUR 2,101 outside Helsinki, Espoo, Kauniainen and Vantaa. In those four municipalities, it is EUR 2,185.
These amounts cover a 37.5-hour working week under the pay table running from 1 August 2026 to 30 April 2027.
The professional job classifications took effect on 1 October 2026. Employees normally enter the second year pay band after one year of recognised experience. A relevant vocational qualification can place them in a higher band, so these figures are not starting salaries for every employee.
The agreement also sets hourly rates and extra payments for work such as evening shifts, weekends and overtime. Employers hiring in another sector need to use the agreement and pay classification covering that work, rather than the commerce figures.
What are the payroll compliance penalties in Finland?
Late reporting and overdue tax payments can trigger separate charges for employers running payroll in Finland, while the underlying amounts remain payable.
Earnings reports are generally due within five calendar days. However, the Incomes Register’s monthly late-filing penalty starts after the eighth day of the following month, adjusted for non-working days. The charge is 3 EUR a day, capped at 135 EUR for the first 45 days. It applies at employer level rather than per employee.
After more than 45 days, a further 1% applies to the taxable payment or pensionable earnings reported late, whichever is greater. For a first report of 10,000 EUR in qualifying earnings made 50 days after that penalty boundary, the charge is 235 EUR.
Late withholding and employer health insurance payments separately attract annual interest of 9.5% in 2026. Interest runs from the day after the tax payment was due until it is paid.
How can CXC streamline payroll and benefits to support business growth in Finland?
CXC helps growing businesses manage payroll in Finland by bringing payroll processing, statutory benefits and local expertise into one service. This reduces the administrative work involved in hiring more employees while helping HR and finance teams keep payroll accurate and on schedule.
Finland’s payroll requirements can become more demanding as a workforce grows, particularly when employees are covered by different collective agreements. These agreements may affect pay rates, overtime, holiday bonuses and other employment benefits. CXC’s local payroll specialists help businesses account for these requirements and manage changes as new employees join or existing employment terms change.
For companies expanding across several countries, CXC also provides international payroll support and consolidated reporting. This gives finance teams better visibility of workforce costs and reduces the need to coordinate separate payroll providers in each market.
With CXC managing the payroll administration, businesses can spend more time on recruitment, employee support and their expansion plans. Speak to our team today.
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