If you want to stay ahead of the competition when expanding your company to Finland, you'll need a compensation and benefits plan that attracts exactly the kind of employees you need. But...
Read MoreIf you want to stay ahead of the competition when expanding your company to Finland, you'll need a compensation and benefits plan that attracts exactly the kind of employees you need. But at the same time, you'll still need to meet all Finland compensation laws and stay within any restrictions for compensation and benefits. Plus, you'll have to do all this while growing your business and hiring the right employees.
Reading Time: 5 minutes
If you want to stay ahead of the competition when expanding your company to Finland, you’ll need a compensation and benefits plan that attracts exactly the kind of employees you need. But at the same time, you’ll still need to meet all Finland compensation laws and stay within any restrictions for compensation and benefits. Plus, you’ll have to do all this while growing your business and hiring the right employees.
You don’t have to do it all alone. Globalization Partners can help by hiring employees on your behalf, handling Finland benefit management, and taking on the liability.
Finland compensation laws don’t dictate a minimum wage, but collective agreements may specify minimum salary requirements for specific sectors. If an employee works over their limit, they are entitled to overtime of 50% for the first two hours and 100% for any hours over that. However, you can agree to exchange overtime wages for more time off.
Employee bonuses are not mandated, but they are common. For example, a collective bargaining agreement may include a provision for a holiday bonus of around 50% of the pay for that annual holiday. Employers can pay this bonus to employees before or after the holiday.
When you map out your Finland benefit management strategy, you must look at both statutory and supplemental benefits. Guaranteed benefits in Finland include annual leave that employees accrue over the time they work for the company. Employees typically earn two days of vacation per each month they work. However, a collective bargaining agreement could outline longer vacation periods.
Employees in Finland get health insurance through the country’s social security plan called the Social Insurance Institution. Maternity leave is 105 days while paternity leave is up to 54 working days.
Another portion of Finland benefit management involves choosing what additional benefits you will offer to bring in top talent. Employees are already insured for employment-based benefits such as earnings-related pension, vocational rehabilitation, and more. The law also requires employers to give their workers occupational health care services.
Sourcing the best benefits can be difficult, especially when you aren’t entirely familiar with Finland’s employment laws. Instead, you can work with Globalization Partners for your Finland benefit management program. We make sure every employee gets statutory benefits as well as additional options. As the Employer of Record, we take the liability off your shoulders and put it on ours.
Collective bargaining agreements outline the majority of Finland’s benefits and compensation restrictions. When you draft an employment contract, you’ll have to meet or exceed the requirements set in your employee’s agreement.
When you expand to a new country, the team you hire will be integral to your success. With benefits planning, you can add a competitive edge to your business and encourage growth.
Benefits are essential to developing your business abroad. While these provisions for your employees play a part in compliance, they’re also vital for maintaining your business. Benefits packages show your employees you care about their well-being. They can keep morale high, improve employee retention, and encourage job seekers to apply for your open positions.
While you’ll be responsible for a series of required provisions, fringe benefits can truly set your company apart. Possible supplemental benefits can include:
Employment laws in Finland detail a range of benefits that every employer must provide for their workers. These requirements include:
Social insurance contributions include pensions, health care, social security, and unemployment benefits.
With the country’s many required benefits, being competitive in the job market may feel like a challenge. When it’s time to design your benefits plan for your expansion, you need to consider your company’s resources and what employees need and expect from you. Finding the balance between these two factors will keep your company competitive and successful. The following steps can help you get started.
During this first step, you need to understand your company’s earnings and expenses. When you determine how much money you have to spend, you can allocate funds to your benefits budget.
It’s also helpful to evaluate your goals during this stage and how your use of benefits will contribute. For example, if you want to compete with leaders in your industry, you can create a similar benefits package to the ones offered by the top companies in the area.
Job seekers will apply for and accept jobs with generous benefits packages. If your company can uncover what employees need from their employers, you can use this information to your advantage. Conducting surveys of employees in your area can help you understand employee needs.
Employees will also have expectations about benefits based on industry standards. You can learn about the common benefits in your industry by researching companies similar to yours.
With the information you gathered, you can develop your benefits plan. Start by setting funds aside for the required benefits. You can then allocate the remaining budget to fringe benefits based on what employees want and expect from companies in your industry.
The actual cost of benefits varies from company to company based on the provisions they offer. Many factors affect what benefits a business provides, including industry, location, and company size. It’s helpful to allocate a percentage of your income to your benefits plan. We recommend around 25 percent in Finland.
A set percentage is advantageous because it scales with your business. As your revenue grows, you can provide more for your employees and support your success with a happy team.
Benefits calculations will vary much like the cost. Among the required benefits, like social insurance, you can find information about calculations in the employment laws. For example, in the private sector, labor organizations determine an appropriate pensions contribution each year. In 2021, pension contributions averaged 24.4 percent of earnings.
This total percentage is split between employees and employers. Employees contribute 7.15 percent or 8.65 percent if they’re ages 53 to 62. Employers contribute 16.95 percent. Note that these contributions are unique to your industry and are subject to change each year.
The country deems any benefits from employment as taxable income. However, there are exceptions and regulations for the specific fringe benefits. Provisions like housing and meals will have an associated value, and this number should be treated as income.
Exceptions to this rule include commuter passes and company bicycles. These provisions combined allow for up to €3,400 of tax-free benefit. Bicycle-related income is tax-free until it exceeds €1,200.
With country-wide universal health care, private health insurance packages are not required or common in Finland. Contributions to national health insurance support the universal healthcare system, and employers are required to contribute to this fund. Employees contribute 1.53 percent, and employers provide 2.04 percent.
While health insurance is not required, the law does require employers to actively care for employee health and well-being.
Finland compensation outsourcing is an excellent option for companies who lack the time or resources to learn every part of Finland’s compensation and benefits laws. With HR professionals and legal experts, Globalization Partners offers the resources you need to succeed when you hire employees in new countries. Get in touch with us to learn more.
If you’re ready to grow your business, or you have questions about a specific country, complete the form. One of our experts will be in touch shortly.
