Employment in Finland

Here you can find information on some of the most common employment terms and standards in Finland.

Professional organisation (labour union)

Finland along with other Nordic countries have over a hundred years’ history of working collectively with employers in developing and cooperating in the labour market. This means, in practice, all aspects of the labour market are negotiated between professional organisations and the employer organisations. 

In Finland, it’s completely fine to belong to a professional organisation. It’s quite common that even your manager will belong to a professional organisation.  

Highly educated employees typically join the organisations based on education. TEK is the labour union for graduate engineers, architects and other university degrees in the field of technology. 

Collective agreements (työehtosopimus, TES)

Agreeing collectively is a key element of the Finnish work life. In Finland, the basic terms and conditions of work are regulated by law. However, collective agreements are used to provide additional conditions that are not regulated in law. For example, annual salary increases, minimum salaries, paid sick leave and holiday benefits. 

It’s important to remember that there’s not just one collective agreement but many collective agreements and each agreement represent a certain field in the Finnish labour market. In addition, these collective agreements ensure that every person in that particular field will receive the same benefits and working conditions. 

TEK and other professional organisations negotiate the collective agreements with the employers’ associations every few years to update the terms and conditions of your work.

Employee representatives (shop stewards)

Normally in Finland there are employee representatives at the work place, who are there to support you in the daily working life. They promote the interests of employees in the work place and participate in local negotiations for all employees and can agree on local benefits and obligations. They also serve as a direct link of communication between the employees and the management. 

If you are uncertain who your employee representative is, you can ask your employer or colleagues.

Cooperation negotiations (yt-neuvottelut)

When a company needs to reorganise or they may need to reduce staff either temporarily or permanently, the employer must, by law, enter into cooperation negotiation with the employee representatives in order to find the best solution for the workforce. Often, these talks lead to temporary layoffs or permanent dismissals, however, it’s not always the case. When this happens, you will be notified by your employee representative who will keep you up-to-date on the progress of the talks. 

Read more on collective agreements at TEM's website here and here

Unemployment fund

Finland has a two-tier support system that compensates for the loss of earnings due to unemployment. You can receive a basic allowance or labour market support from Kela – the Social Insurance Institution of Finland, or an earnings-related unemployment benefit by belonging to an unemployment fund. The compensation from the fund is proportional to your earnings and is therefore usually bigger than the support received from Kela. Read more from KOKO fund's website.

Work hours

The work hours are stated in your employment contract; however, they are regulated by the law. There are, for example, regulations on the maximum length of the shift and the minimum time of rest between work shifts. Usually employees electronically clock in and clock out, but in some work places the employees are allowed to report their work hours by themselves. Working overtime is not illegal, but it should be agreed by both the employer and the employee and compensated according to the law and collective agreements. If you have any questions on your work hours, you can ask your local employee representative or HR. 

Holidays (annual leave)

In Finland, all employees are entitled to holidays. The number of days depends on your employment contract (full-time/part-time, temporary/fixed). When you begin your employment, you accumulate your entitled holidays based on your work contract and how long you have been working for your employer. Usually, those working in full-time, fixed contracts receive approximately 30 days annual leave. There are a number of bank holidays throughout the year in addition to your entitled annual leave. 

It’s quite normal to take your main holiday between May and September, as it normally corresponds with children’s school holidays. 

There is a number of regulations regarding annual leave. If you have any questions, you can ask your local employee representative or HR, or as a TEK member you can contact us

You can find more information on work hours and holidays from TE Office's website.

Income tax 

The Finnish income tax system is highly automated and strongly regulated. When you enter into a work contract, you negotiate your gross salary. From this gross salary, your employer will withhold your income tax, welfare payments, pension and insurance. Then, you will receive your net salary after these deductions. 

It’s vital that you provide your tax card to your employer. Otherwise, your employer is legally obliged to withhold 60 % of your salary. 

The income tax is calculated after every year you work. Based on that calculation, you will receive a tax decision where you will either pay more tax or receive a tax refund. It’s really important that you provide the tax authority with your bank account details, even if you leave Finland. 

When you receive a tax decision for the previous year, it is important that you check if you are entitled to request tax deductions. For example, you may be able to ask for deductions on travel costs to work, house repairs and your TEK membership fees etc. Please check vero.fi for more information. 

Pension 

Everybody working in Finland is accumulating a pension and has the right to receive a occupational-related pension when reaching the retirement age. Even if you live abroad when you retire, you will still receive your pension from Finland, but you have to claim it from your own country through your national pension authority. 

It’s important to remember that you cannot take your Finnish pension contributions with you if you leave Finland before you retire. Those contributions will stay in Finland until you retire. 

Please check Eläketurvakeskus or KELA for more detailed information.