Easily manage employment in Finland

Payroll services in Finland

Finland has a strong economy with key industries in technology, manufacturing, and forestry. With specific labor laws and tax regulations, employers in Finland must ensure compliance with local payroll requirements, including social security contributions, employment contracts, and tax obligations. Understanding these regulations is essential for smooth payroll operations and legal compliance.

Payroll breakdown in Finland

Employers in Finland must adhere to national payroll regulations regarding wages, taxes, and social contributions. Below is an overview of key payroll components:

Minimum wage and working hours

• Minimum wage: Finland does not have a statutory minimum wage; wages are determined by industry-specific collective agreements.
• Payroll frequency: Salaries are generally paid monthly.
• Standard working hours: The normal workweek in Finland is 40 hours, typically spread over five days.
• Overtime: Employees are entitled to additional pay for overtime work, calculated at 150% of the regular wage for extra hours and higher rates for work on public holidays.

Taxation and social security contributions

• Personal income tax: Finland has a progressive income tax system with rates ranging from 0% to 31.25% at the national level, plus municipal taxes ranging from 16.5% to 23.5%.
• Employer contributions:
• Pension insurance (TyEL): 17.39% of the gross salary.
• Unemployment insurance: 0.52% to 2.06% of the gross salary.
• Health insurance: 1.53% of the gross salary.
• Employee contributions:
• Pension insurance (TyEL): 7.15% of the gross salary (for employees under 53 and over 62) and 8.65% for employees aged 53-62.
• Unemployment insurance: 1.5% of the gross salary.
• Corporate tax: The corporate income tax rate in Finland is 20%.
• Tax reporting: Employers must file payroll taxes and contributions with the Finnish Tax Administration (Vero) regularly.

Payroll compliance in Finland

• Employment contracts must be provided in writing and specify terms such as salary, working hours, and job responsibilities.
• Payroll deductions: Employers must ensure accurate deductions for social security and income tax.
• Employers must stay updated on changes to Finland’s labor laws and tax regulations to avoid penalties.

Quick facts: Important considerations for employers

• Payroll frequency: Salaries are generally paid monthly.
• Currency: Payroll in Finland is processed in Euros (EUR).
• Tax reporting: Employers must file payroll taxes and contributions with the Finnish Tax Administration (Vero).
• Payroll deductions: Employers must ensure accurate deductions for social security and income tax.
• Payroll compliance: Employers must stay updated on changes to tax rates and reporting requirements.

Run payroll in Finland with Remote

Managing payroll in Finland requires careful attention to tax regulations, employment laws, and social security requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be with Remote, book a demo today.