How to hire in Finland through an EOR

Fixed-term contracts in Finland need a justified reason, like seasonal work or a specific project. Without one, they automatically convert to permanent contracts. That catches a lot of companies off guard.

Contract types

Most companies default to permanent, indefinite contracts because they're straightforward to manage over time. Fixed-term contracts come with strict rules to prevent misuse, so it's worth understanding when each type actually applies.

For core hires, stick to permanent contracts. You'll avoid renewal complications and stay in line with Finland's employee protections.

What has to be in the contract

Finnish law doesn't require every contract to be in writing, but you must provide written terms on key points within one month of the start date. Verbal agreements are technically valid but tend to lead to disputes. Always use a written contract in Finnish or Swedish.

Include these essentials:

• Names, addresses, and contact info for both parties.
• Start date and, for fixed-term contracts, the end date and reason.
• Job duties, work location, and regular hours.
• Salary details, pay frequency, and benefits.
• Notice periods and termination rules.
• Probation period (max 6 months for most roles; up to 8 months under some collective agreements).
• Applicable collective agreement (TES), if any.
• Pension and accident insurance provider.

Probation allows you to end the contract with shorter notice and without giving a reason, but you need to tell the employee in writing at the outset. Once probation ends, full protections apply. If you leave out key details, courts will fill the gaps using the Employment Contracts Act, and those defaults usually favour the employee.

Contractor vs employee

Misclassification is a serious risk in Finland. Courts focus on control: if you direct how, when, and where the work happens, provide tools, and maintain ongoing oversight, that person is likely an employee under the Employment Contracts Act.

Key tests courts look at:

• Whether there's an employment contract or a service agreement.
• Whether you're setting the methods and schedule.
• Whether the person is entitled to vacation, sick pay, parental leave, and pension contributions.

If you misclassify, reclassification runs back to the original start date. You'll owe back taxes, social security contributions (the employer pension share runs 18-25%), vacation pay, and benefits. Tax authorities can issue fines, and if the worker takes legal action, unjust termination claims can result in compensation of up to 24 months' salary.

Non-compete clauses are also tightly regulated. They're only enforceable if they're reasonable in scope, such as limited in time and geography, and you pay compensation to the employee during the restriction period. On IP, employees own their inventions by default unless the contract explicitly states otherwise, and courts will scrutinise those clauses carefully.

If you're unsure about classification or contract drafting, working with an EOR is a practical way to get it right from the start and avoid disputes down the line.

Finland gives employees up to 30 days of paid annual leave after their first year. That's five weeks if Saturdays count as workdays in your industry.

Time off

Employees earn annual leave over the accrual year, April 1 to March 31. To count a month as full, an employee needs to work at least 14 days or 35 hours that month.

In the first year, they earn 2 days per month, up to 24 days. After that, it's 2.5 days per month for 30 days total. Leave must include a continuous 12-day stretch, with 24 days taken in summer (May 2 to September 30) unless you and the employee agree otherwise.

Finland has 11 public holidays. Most fall on weekdays and don't come out of annual leave. Independence Day is the only one with a legal requirement for a paid day off.

All leave types

Here's what the law requires for key leave types. For many, pay comes from Kela (Finland's social insurance institution), and job protection applies across the board. Percentages below are of daily pay.

Mandatory benefits

You're required to pay into social security, which covers health, pension, and unemployment. Employers contribute around 20-25% of gross salary; employees pay 8-11% through withholding.

Breakdown for 2025:

• Pension: Employer 17.5-18.3%, employee 7.15%.
• Health insurance (Kela): Employer 1.06% on first €2.3M payroll, employee ~1.5%.
• Unemployment: Employer 0.5-1.5%, employee 1.5%.
• Accident insurance: Employer 0.5-2% depending on risk.

There are no unusual mandates like meal vouchers or transport subsidies. Those show up often in collective agreements, but they're not required by law.

What people actually expect

The legal minimums in Finland are already generous, but if you want to stay competitive, you'll need to go a bit further. Most companies offer 30+ days of leave, and some add 1-2 extra days or give employees more flexibility over timing.

Private health insurance has become standard. Public wait times can be long, so candidates expect faster access to specialists and dental coverage. Offers without it tend to get passed over.

Remote work stipends of €20-50/month for home office costs are common, as are wellness perks like gym memberships or mental health days.

If you stick to the bare minimums, expect a slower hiring process. Finnish candidates compare offers against Nordic peers and established local employers. Budget an extra 5-10% on top of salary to stay in the running for experienced hires.

Finland made it easier to end employment contracts as of January 1, 2026. That said, the country still leans heavily toward employee protections, so documentation matters more than ever if you want to avoid an unfair dismissal claim.

Firing someone

You can terminate for valid grounds, including a serious breach of obligations, a long-term inability to work due to personal circumstances, or a permanent reduction in available work. From 2026, person-related terminations only require a "proper reason" rather than the previous "proper and weighty reason." That lowers the bar for issues like neglect or misconduct, but you still need to warn the employee first and give them a genuine chance to improve.

Unfair dismissal applies if you fire someone for illness, disability, union activity, political opinions, civic duties, or for using legal protections. Temporary work shortages don't qualify as grounds, and neither does hiring a replacement. Protected categories include age, gender, race, religion, and pregnancy. Finnish courts tend to side with employees when documentation is thin, so keep records of every warning and performance conversation.

Production or financial terminations still require proper and weighty reasons. Fixed-term contracts can't be ended early without agreement, or you'll owe damages. Always check the applicable collective agreement before proceeding.

Notice periods

Notice periods are based on tenure and follow either the Employment Contracts Act or the relevant collective agreement, whichever gives the employee better terms. Employers must provide written notice. Employees can resign at any time but must also follow the applicable notice period.

Collective agreements often extend these to anywhere from 1 to 6 months depending on role and tenure. During probation, which can run from 1 to 6 months, either side can give 14 days' notice.

Severance

Finnish law doesn't require severance pay. It's uncommon and only comes into play if a collective agreement or individual contract specifically includes it. There's no statutory formula or cap.

Some agreements provide 1 to 2 weeks' salary per year of service, but typically only for production-related terminations after longer tenures. Person-related dismissals generally don't come with any payout. If you're handling a redundancy, it's worth negotiating a settlement upfront to avoid disputes later.

Work permits and visas

You can hire foreign nationals through an EOR. The EOR acts as the legal employer and sponsors the work permit. Finland doesn't have a digital nomad visa.

EU, EEA, and Swiss citizens don't need a permit. Everyone else applies for a residence permit for work, which is tied to the specific job and employer. Specialists in fields like IT and research get faster processing. Key requirements include a job offer, a salary that meets the collective agreement minimum (often €3,000+ per month), health insurance, and proof of qualifications. Standard processing takes 1 to 4 months. Specialists can sometimes get a decision in 2 weeks if the case is urgent.

The EOR manages the application through the Enter Finland portal, including any labor market test required for non-specialist roles, which means proving no local or EU worker is available for the position. Renewals follow the same process. Family members can apply to join. Post-Brexit, UK workers need permits like any other non-EU national.

A few other things worth knowing

Finland follows EU GDPR closely. You'll need employee consent to process personal data, a DPO if your processing meets the threshold, and a process to report breaches within 72 hours. Fines for non-compliance can reach into the millions.

Trade union density sits above 60%, and collective bargaining agreements cover around 90% of workers across most sectors. These agreements set terms on pay, hours, and dismissal that often go beyond the legal minimums. Your EOR should know which CBA applies to each role and make sure you're compliant. Even non-union employees are typically entitled to CBA benefits where applicable.

The 2026 termination reform only affects person-related dismissals, not economic ones. If misconduct occurred before December 31, 2025, the older "proper and weighty reason" standard still applies. There are no other major legal changes from 2024 to 2026 beyond this. Keep an eye on CBA updates, as some agreements are being revised to reflect the new law.