Employer of Record (EOR) in Finland
An EOR in Finland allows businesses to enter the market quickly and help maintain compliance with local laws, all while reducing the overhead costs of establishing a local entity. Atlas HXM offers a seamless EOR service that handles all aspects of employment from payroll processing to compliant administration.
Partner with Atlas HXM for a cost-effective, compliant solution to hire and manage your workforce in Finland.
Quick Overview of EOR in Finland
Expanding into Finland doesn't have to mean drowning in paperwork or hefty setup costs. With an Employer of Record (EOR), you can bypass the complexities of local regulations and quickly hire employees, all while maintaining compliance with Finland's labor laws. From payroll processing and tax compliance to benefits management, an EOR takes care of the legal nitty-gritty like social security contributions, so you can focus on growing your business without the need to set up a costly local entity.
The EOR model offers a low-risk, cost-effective alternative to setting up a subsidiary. Establishing a local entity in Finland can cost anywhere from EUR 10,000 to EUR 20,000 plus the cost of maintaining human resources (HR), legal assistance, accountants and more. It can also become highly administrative. By partnering with an EOR, you can avoid these setup costs and enter the market faster, avoiding the overhead of a physical office. This is especially beneficial for startups, SMEs, and businesses testing new markets, who need to act quickly and comply with complex local regulations.
How an EOR Works
Atlas HXM provides EOR services that ensure your business remains compliant with Finland's labor laws while you focus on growing your operations, free from administrative and legal burdens.
Candidate Selection
Atlas HXM does not recruit candidates but will check the employment setup for compliance around new hires like validating right-to-work, reviewing contract terms against Finnish rules, and configuring payroll and statutory obligations correctly.
Employment Contracts
Atlas HXM drafts and administers employment contracts in compliance with Finnish labor law, including the Employment Contracts Act. In the contract, we clearly outline employment terms to reduce the risk of future disputes, such as:
Job title and responsibilities
Salary, benefits, and working hours
Leave entitlements and notice periods
Payroll & Benefits Management
Payroll is processed in euros (EUR), including the following:
Accurate tax withholdings and social security contributions
Statutory benefits such as pension insurance, unemployment insurance, and health insurance
The EOR also helps maintain compliance with mandatory benefits, so employees are protected under Finland's laws.
Ongoing HR Support
Provides HR support, including: Leave management, employee relations and regulatory updates throughout the employee's tenure. This allows businesses to focus on core operations, while Atlas HXM handles ongoing compliance.
What to Choose: EOR vs PEO
Work Life in Finland
Finland's employment framework is designed to balance operational needs with strong employee protections. Here's what you need to know:
Employment Types:
Permanent: Employment under a contract that is valid indefinitely with full statutory benefits and strong job security protections.
Fixed-Term: Hired for a specific project or defined duration, with justified reasons required to avoid automatic conversion to permanent status.
Probation Periods: Maximum 6 months for standard positions, with shorter periods for fixed-term contracts lasting less than 8 months (maximum half the employment duration). Probation periods must be explicitly agreed upon by both parties. During probation, either party can terminate the contract, but not on discriminatory or irrelevant grounds.
Working Hours & Overtime: In Finland, the standard workweek is 40 hours, with a maximum of 8 hours per day. Weekly working hours cannot exceed an average of 48 hours per week over a period of four months. For overtime, employees receive regular pay plus 50% for the first 2 hours of daily overtime and regular pay plus 100% for subsequent daily overtime hours. Weekly overtime is compensated at regular pay plus 50%.
Leave Entitlements
Leave Type | Eligibility / Duration | Payment / Notes |
|---|---|---|
Annual Leave | The accrual year runs from 1 April to 31 March. Employees earn either 2 or 2.5 days of leave per month, depending on length of employment | Regular salary; holiday pay must be issued before vacation start for periods exceeding 6 days. Employees are entitled to a minimum uninterrupted period of 12 days annually |
Pregnancy Leave | 40 working days | Income-based allowance paid by Kela, with a minimum of EUR 31.99 daily; 2 months notice required |
Parental Leave | 320 working days total | Each parent receives a personal quota of 160 days; up to 63 days may be transferred to the other parent. Allowance is income-based, paid by Kela (minimum EUR 31.99 daily). Leave can be taken until the child reaches age 2. 2 months notice required. |
Sick Leave | Up to approximately 300 working days with medical certification | The first day of sick leave (for absences under 5 days) is unpaid unless a collective agreement provides otherwise. The employer pays full salary from day 2 up to 9 weekdays (after 1 month of employment); Kela provides income-based sickness allowance thereafter |
Public Holidays | All statutory holidays | Double daily wages for work on public holidays, paid in addition to any applicable overtime premium |
Payroll & Benefits: Atlas HXM manages payroll in EUR, social security contributions (pension, unemployment, accident insurance), and mandatory benefits administration. Supplemental benefits can include occupational healthcare, meal vouchers, transportation allowances, and professional development options.
Atlas HXM can help you manage these aspects and can help ensure that employees are supported and compliant with Finland's labor laws while businesses can focus on operations without administrative burdens.
What to Choose: Indirect vs Direct EOR
Taxes & Compliance
Finland operates on a calendar-year tax system, running from January 1 to December 31. Employers must submit monthly payroll taxes and social security contributions by the 12th of the following month, annual income tax returns by May 31st for individuals, and annual employer reports by January 31st of the following year. VAT returns are generally due monthly by the 12th of the following month.
Category | Details |
|---|---|
Employer Payroll Tax | Earnings-related pension insurance: ~17.75% of gross salary |
Unemployment insurance: ~0.5% of gross salary | |
Accident insurance: Industry-dependent rates | |
Occupational healthcare and group life insurance | |
Employee Payroll Tax | State income tax: 12.64%–44.25% (progressive) |
Municipal tax: 4.40%–19.70% (varies by municipality) | |
Church tax: 1%–2.25% (if applicable) | |
Pension insurance: ~6.75% of gross salary | |
Unemployment insurance: 1.25% of gross salary | |
Pension System | Earnings-related pensions based on lifetime earnings |
National pensions for residents aged 65+ | |
Combined employer and employee contributions fund the system |
VAT & EOR Costs: Finland applies a 24% VAT rate to most services, including EOR fees. EOR services are generally subject to standard VAT rates as professional services. Businesses may be able to recover VAT paid on EOR services depending on their VAT registration status and business activities.
Atlas HXM handles tax compliance, including progressive income tax calculations, social security contributions, year-end filings, and expatriate tax planning, ensuring businesses remain compliant with local laws while minimizing administrative burden.
Termination
Employees and employers must give written notice for termination, with statutory notice periods based on length of service. Under the Employment Contracts Act, an employer must have proper and weighty grounds to terminate an indefinite employment contract. Employer notice periods range from 14 days (up to 1 year of service) to 6 months (over 12 years of service). Employee notice periods are 14 days (up to 5 years service) or 1 month (over 5 years service). Severance pay is not formally regulated for private sector employees under normal circumstances, but employees receive payment for unused vacation days, outstanding salary, and earned bonuses. The EOR helps ensure proper handling of terminations, including notice periods, final wage calculations, and required documentation.
5 Things to Look for in an EOR Provider in Finland
Local expertise and knowledge of Finnish labor laws, the Employment Contracts Act, Working Time Act, and collective agreement requirements.
Advanced technology for payroll, reporting, and HR system integration with robust employee self-service capabilities.
Strong compliance track record and relationships with Finnish authorities, including Kela and tax offices.
Global presence to support multi-country expansion, with verified security and compliance standards (ISO 27001/27017/27018, GDPR).
Atlas HXM provides direct EOR services, managing payroll, compliance and benefits efficiently. Atlas HXM's unified platform automates HR, payroll, and compliance tasks, while offering premium employee support, global benefits, and access to 9,000+ learning courses. Recognized by Everest Group PEAK Matrix 2025 and NelsonHall NEAT Assessment 2026, Atlas HXM combines compliance, technology, and global expertise.
FAQs
How quickly can I hire employees in Finland through an EOR?
You can typically hire employees within 5-10 business days once all documentation is complete, compared to months required for establishing a local entity.
What is the minimum wage in Finland?
Finland has no statutory minimum wage, but generally binding collective agreements set sector-specific minimum wages that apply regardless of employer membership.
Are there restrictions on terminating employees?
Yes, Finland has strong employee protection laws requiring proper notice periods based on service length, justified grounds for dismissal, and compliance with collective agreements.
How does the vacation system work in Finland?
Employees earn vacation days during the vacation year (April 1 - March 31), typically earning 2.5 days per month for a total of 30 days annually.
What are the main employer payroll contributions?
Employers contribute approximately 17.75% for pension insurance, 0.5% for unemployment insurance, plus industry-dependent accident insurance and occupational healthcare costs.
Can employees work remotely in Finland?
Yes, remote work is permitted under the Working Time Act and typically requires written agreements between employer and employee outlining terms and conditions.