PEO Finland

Professional Employer Organization (PEO)

Employer of Record (EOR) | Remote Work

peo finland

World Bank Ease of Doing Business Ranking

ease of doing business in finland
  • DB Rank – 20
  • DB Score – 80.2

Rankings on Doing Business topics – Finland

rankings on doing business topics finland

Topic Scores

topic scores finland

Global PEO in Finland

Finland, renowned for its exceptional quality of life, advanced social welfare systems, and impressive technological innovations, stands out as a prime example of a progressive and equitable (Professional Employer Organization) PEO country. With a robust economy and a strong emphasis on education, Finland nurtures a skilled workforce capable of contributing to various industries. The PEO model aligns seamlessly with Finland’s values of inclusivity and work-life balance, providing businesses the opportunity to access this highly skilled talent pool without the administrative burdens of traditional employment. In this collaborative framework, both employees and employers benefit, as Finnish PEOs facilitate smooth onboarding, HR management, and legal compliance, allowing companies to focus on their core objectives. Finland’s PEO landscape reflects the nation’s dedication to efficiency, fairness, and innovation in the realm of global employment solutions.

What Is a PEO?

A PEO, or Professional Employer Organization, is a company that provides a range of HR and payroll services to small and medium-sized businesses. These services can include employee benefits, payroll, compliance with labor laws, and recruiting and training.

PEOs work by entering into a co-employment agreement with the businesses they serve. In this arrangement, the PEO becomes the employer of record for the business’s employees, taking on responsibilities such as payroll, tax withholding, and employee benefits. The business, however, retains control over its day-to-day operations and the supervision of its employees.

PEOs can help businesses streamline their HR and payroll processes, reduce costs, and free up time and resources to focus on their core business activities. They can also provide access to a range of benefits and resources that small businesses may not be able to afford or manage on their own.

PEOs are also understood as employer of record / EOR at times.

Finland – Country Overview

Finland, a sovereign state in Northern Europe shares border with Norway to the North, Russia to the East, and Sweden to the Northwest. Trade is important to Finland’s highly industrialized, free-market economy with exports accounting for more than one-third of GDP in recent years. Its competitive manufacturing industry produces high-quality wood, engineering, telecommunications, and electronic products and equipment.

World Economic Forum’s The Europe 2020 Competitiveness Index has declared Finland as the most competitive country in Europe.

Finland excels in exporting technology for mobile phones and promotes startups in the gaming, information technology, and biotechnology sectors. Its efficient business framework drives productivity and innovation. The country’s economy is expected to grow from 239.77 USD Billion in 2019 to 270.00 USD Billion in 2020.


Euro (€)

Principal Language

Finnish, Swedish


Parliamentary Representative Democratic Republic

Capital City


Major Cities

Helsinki, Tampere, Turku, Oulu, Jyväskylä

Employment Contracts in Finland

Employment contracts can either be fixed- or indefinite term.

Fixed-term contracts are issued for:

  • Seasonal work
  • Substitute work
  • Fixed-term projects
  • One-time work

Employers must provide employees a written document with detailed employment terms before their first salary period ends. This document must contain the following information:

  • The time when the work begins
  • The duration of any temporary contract and the reason why it is temporary
  • The length of any trial period
  • The place of work
  • The main duties of employees
  • The collective agreement that applies to the work
  • The basis for determining the pay and the payment period
  • The regular working hours
  • The manner of determining annual vacation
  • The notice period in case of termination of the contract and the basis for calculating this period

Employers and employees can agree that the work begins with a probationary period. The maximum probationary period is 4 months.

Working Hours in Finland

Regular work schedule is 8 hours per day and 40 hours per week, and weekly working hours can be averaged over a period of no more than 52 weeks. Employees can take rest for at least 30 minutes if the daily work hours exceed 6 hours. Employees are also entitled to a continuous rest period of minimum 11 hours between shifts and at least 9 hours for periodic work.

Employers are required to provide a continuous rest period of a maximum of 35 hours each week to employees. The weekly rest period can be scheduled over 2 weeks if the time off each week is not less than 24 hours.

Employee Leave in Finland


Employees are entitled to the following paid public holidays:

  • Easter Saturday
  • First of May
  • Midsummer’s Eve
  • Independence Day
  • Christmas Eve

Collective bargaining agreements generally contain provisions on other holidays with full salary entitlements such as New Year’s Day, Good Friday, 12th Day, Easter Monday and Ascension Day. Employees who work on a public holiday are entitled to double pay.

Maternity Leave

Pregnant employees are entitled to 105 days of maternity leave that can start 30 to 50 days before the expected date of birth. Though Finnish law doesn’t require employers to pay salaries to pregnant employees during maternity leave, this obligation is generally specified in the collective agreement.

Paternity Leave

Fathers are entitled to a maximum of 54 days of paternity leave along with the parental allowance. Both the parents can take a maximum of 18 days from these days to stay at home. The paternity leave can either be paid or unpaid, and if unpaid, the Social Insurance Institution pays for the paternity leave.

Sick Leave

Employees are entitled to 9 days of sick leave with full pay each year and with 50% pay if working for less than 1 month. Following this period, the Finnish National Pension Institute pays employees a daily allowance for illness at 70% of regular wages.

Parental Leave

Parental leave for a maximum of 158 days can be taken following maternity leave either by the father or the mother or be divided between them. Even part-time parental leave is also available.

Child Care Leave

Under the Employment Contracts Act, employees can take child care leave after parental leave until the child reaches the age of 3. A child care benefit is paid by the Social Insurance Institution to families that choose not to enroll their child in municipal day care. The parents of small children can take temporary child care leave of 4 days in case the child gets ill suddenly, and can also request for shortened work hours until the child goes to school.

Other Paid Leave

  • Paid vacation days in Finland are earned according to the time spent working during each “leave-working month,” starting with two days per leave-working month.
  • After one full working month, employees are entitled to up to 9 days of paid sick leave.
  • Parental leave in total is set at 317 weekdays:
  • Women are entitled to 105 days of paid maternity leave.
  • Men are entitled to 54 working days of paid paternity leave.
  • The remaining days may be split by either parent as they choose.


Tax and employer contributions 

Finland’s income tax rates for employees are progressive, ranging between 6% and 31.25% for thresholds ranging from €19,200 to €82,900+.

The country also has a municipal tax on employee income which fluctuates between 16.5% and 22.5% plus a church tax of 1%-2%. The corporate tax rate is currently set at 20%.

As for employer contributions, the total cost can be as high as 21.% to account for social support while employees can expect to pay 1.36% of their salaries for health insurance, 7.15% for pension insurance, and 1.4% for unemployment insurance. A lot to take in, we know.

Employee Benefits in Finland

Employees can choose to retire on old-age pension between the ages of 63 and 68, and can accrue higher pension if they continue to work longer. The pension is accrued at 1.5% of the annual income but the rate increases with age. For employees between the ages of 53 and 62, the pension is accrued at 1.9%, and at 4.5% for those between the ages of 63 and 68.

Employees working part-time continue receiving the part-time pension to compensate for the associated lost earnings. Employees aged between 60 and 67 can also choose for part-time retirement.

Employees who suffer from a disorder, illness, or handicap that restricts their capacity to work and is likely to continue for at least 1 year, are paid disability pension. Employees whose incapacity to work is assessed as temporary qualify for rehabilitation benefits.

Workers’ Compensation

Employees are required, under the Employment Accident Insurance Act, to cover their employees against occupational injuries and diseases. Employees are covered by workers’ compensation in the following set of conditions:

  • At work
  • When on work-related business (in Finland or abroad); on the way to or from work
  • When conducting a work-related assignment ordered by the employer
  • In circumstances created due to work at the workplace or an area belonging to or outside it
  • When attempting to save or protect the employer’s property or human life in connection to their work

Table of Contents