Finland Employment Guide

Understanding Minimum Wage Regulations

In this jurisdiction, there is no statutory minimum wage. Instead, compensation is typically determined by collective bargaining agreements specific to the industry or company. For instance, a technology firm might negotiate a different base pay scale than a manufacturing company through its respective union agreements.

Personal Income Tax Structure

The national personal income tax operates on a progressive scale from 6% to 32%. Employees are also subject to a flat-rate municipal tax, which can reach up to 10.86%. The final tax burden can be influenced by additional factors such as church tax obligations and the number of dependents, like children. The following table outlines the national tax rates based on annual income brackets.

Employer Payroll Costs Breakdown

On average, employers can anticipate additional costs equivalent to approximately 20.45% of an employee's gross salary. These mandatory contributions cover various social security and insurance schemes.

• Social Security Contribution - 1.16%
• Public Pension Fund - 18.15%
• Unemployment Insurance* - 0.27%
• Accident Insurance - 0.80%
• Group Life Insurance - 0.07%
• Occupational Health Care - A fixed annual fee of 3.00 EUR

*The unemployment insurance contribution applies to annual salaries up to 2,337,000 EUR. Earnings above this threshold are subject to an additional 1.09% levy. These figures are estimates; for precise calculations tailored to your specific situation, consulting with a provider like SailGlobal is recommended.

Standard Working Hours and Overtime Compensation

The standard workweek is defined as 37.5 hours, typically spread over five days. However, many companies opt for a 40-hour week, which is legally permissible. Overtime pay is not mandated by law but is often stipulated in individual Employment Agreements (EA).

When an EA includes overtime provisions, compensation for work beyond standard hours is governed by the Working Hours Act. A common practice, as seen in many multinational companies operating locally, is to compensate the first two hours of overtime at 150% of the regular hourly rate, with any subsequent hours paid at 200%.