Finland

Finland has consistently ranked at the top position in the World Happiness Report since 2018. The Nordic country offers its people countless parental leaves, supports the unemployed, and free healthcare and education for all. Small and medium businesses employ a vast majority of the Finnish population. The country's main exports are paper, machinery, oil, and vehicles.

Major economic hubs:

Helsinki, Espoo, Tampere, Vantaa

Skills in demand :

Software Engineers, Nursing Professionals, Medical Practitioners, Educators.

Collective agreements form the basis of Finnish labor laws. All employees working in Finland, irrespective of their nationalities, are covered under Finland's labor and occupational safety legislation.  

Employee Contract

Finland's official languages are Finnish and Swedish. However, employment contracts may be in any language understood by the employee.

General Components of Salary Package in Finland

Salaries are one way companies recognize and reward their employees for working hard. Salaries may include both monetary benefits like pay rates, bonuses or profit sharing agreements as well as non-monetary rewards such as health care plans with no deductibles that come straight out of your paycheck every month.

The general components of Salary Package in Finland are —

Resident Tax Information

In Finland, taxation on income is progressive and has a flat tax rate for social security benefits. All residents of the country are taxed worldwide, while non-residents or foreign employees have their taxes imposed only in relation to what they earn within this Nordic nation's borders

Social Security

It is mandatory for employers to register their employees with the Finnish Social Security.  

The Finnish social security provides –  

1. Pension premiums
2. Accident insurance
3. Health insurance
4. Group life insurance premiums
5. Unemployment insurance

Statutory Benefits

Statutory benefits must be provided by employers looking to employ talent in Finland.  

Statutory benefits in Finland include —

• Social security: All employers must contribute towards the Finnish social security.  
• Social security covers all Finnish citizens and foreign employees.
• 13th-month pay: It is customary to provide the 13th-month pay to all employees in  
• Finland. Employers must provide the 13th-month pay to employees before the  
• employee’s annual leaves.
• Statutory leaves: All statutory leaves as laid out by the Finnish labor law are  
• mentioned in the previous section. Employers may provide the additional leaves to  
• employees, but it must be clearly outlined in the employment contracts.
  

Fringe Benefits

Employers commonly provide fringe benefits that do not form a part of an employee’s compensation. Fringe benefits are provided to an employee in addition to their regular salary.  

Commonly provided fringe benefits include –

• Employment expenses
• Interest expenses
• Household expenses
• Accommodation costs
• Donation deductions

Other widely provided fringe benefits include —

• Meal vouchers
• Company equipment
• Additional paid annual leaves
• Flexible work arrangements

Exempt Benefits

Certain deductible benefits in Finland include

Employment expenses with a standard deduction of EUR 750

Interest expenses from certain loans are exempt. However, if the expenses exceed a certain amount, taxes shall apply Household expenses for a maximum of EUR 3,500 are exempt

Accommodation costs up to EUR 450 monthly are exempt

Donation deductions (cash deductions) for a minimum of EUR 500 and a maximum of EUR 500,000 are exempt

Long-term Incentives

The best way for an employer to show their appreciation of hard work and dedication is through long-term benefits. Employees will often be rewarded with company specific goals, such as stock options or other forms of equity ownership that provide incentives over time horizons greater than one year when they achieve certain performance milestones within the business unit/organization where employed.

A few commonly provided long-term incentives in Finland include

• Additional contributions toward pension funds
• Private health insurance, dental cover, and/or life insurance
• Performance-based incentives
• Employee stock options

Termination Process

Termination in Finland can be done on a mutual consent basis. An employer in Finland may terminate the employment contract of a regular employee for redundancy or any other reasons. An employee can terminate the employment contract without giving any reason to the employer. Upon completion of the employment, employees are entitled to a written certificate on request.

Notice Period

The notice period for employees during the probationary period is from 14 days to 30 days, while for permanent employees, it ranges from 14 days to 180 days.

Severance Pay

Employees in Finland are not entitled to severance pay unless expressed in the agreement.