Finland HR and payroll glossary

Avainhenkilö Key employee (source-tax scheme)

avainhenkilö

Qualifying foreign experts who move to Finland and meet a salary threshold can choose a flat 25% source tax on their pay instead of progressive income tax for a limited period. The scheme must be applied for and affects net-pay offers to senior foreign hires. Source

Kunnallisvero Municipal income tax

kunnallisvero

A flat income tax set by the municipality of residence: 5.30% in Helsinki for 2026. Rates have been low since the 2023 reform moved health and social services from municipalities to the wellbeing services counties and the state. Source

Sairaanhoitomaksu Health care contribution

sairaanhoitomaksu

A contribution to public health insurance levied through taxation: 1.10% of municipal taxable income for wage earners in 2026 (1.06% in 2025). It is included in the employee's withholding rate. Source

Tulorekisteri Incomes Register

tulorekisteri

The national database to which employers report every payment of wages, shortly after each pay date. The tax authority, pension insurers, Kela and other agencies all take their data from it. Source

Työtulovähennys Earned income tax credit

työtulovähennys

A credit against state income tax for people in work: 18% of pay, capped at EUR 3,430 in 2026, reduced by 2% of net earned income above EUR 35,000, to EUR 3,119 above EUR 50,550. Source

Valtion tulovero State income tax

valtion tulovero

The progressive national income tax on earned income. The 2026 scale is 12.64% up to EUR 22,000, 19% to 32,600, 30.25% to 40,100, 33.25% to 52,100 and 37.50% above. With municipal tax and contributions the top marginal rate on pay is about 52%. Source

Verokortti Tax card

verokortti

The card issued by the Tax Administration that gives each employee's personal withholding rate and annual income ceiling. Employers withhold at that rate, and at a higher additional rate on pay above the ceiling. Source

Yle-vero Public broadcasting tax

A personal tax that funds the public broadcaster Yle: 2.5% of net earned income above EUR 15,150, capped at EUR 160 a year in 2026, so most employees pay EUR 160. Source

Päivärahamaksu Health insurance daily allowance contribution

sairausvakuutuksen päivärahamaksu

The employee's contribution that funds sickness and parental daily allowances: 0.88% of pay in 2026 for ages 16–67, collected through the tax withholding rate. It is not charged if annual wage income is below EUR 17,255. Source

Sairausvakuutusmaksu Employer's health insurance contribution

työnantajan sairausvakuutusmaksu

The employer's health insurance contribution, 1.91% of pay in 2026 (1.87% in 2025), reported and paid to the Tax Administration with withheld taxes. Source

TyEL Employees Pensions Act contribution

työntekijän eläkelaki (TyEL-maksu)

The earnings-related pension contribution, paid to a private pension insurer chosen by the employer. In 2026 the employee pays 7.30% of pay (from 2026 the same rate for all ages 17–62) and the employer on average 17.10%, a total of 24.40%, with no ceiling. The employer's actual rate depends on its insurer and size. Source

Työttömyysvakuutusmaksu Unemployment insurance contribution

työttömyysvakuutusmaksu

Paid by both sides in 2026: the employee 0.89% of pay (ages 18–64), the employer 0.31% on a total payroll up to EUR 2,509,500 a year and 1.23% on the part above. Source

Lomaraha Holiday bonus

lomaraha

A holiday bonus, usually 50% of holiday pay, paid under most collective agreements rather than by law. Because collective agreements are often generally binding, many employers must pay it even if they are not members of an employers' association. Source

Vuosiloma Annual holiday

vuosiloma

Under the Annual Holidays Act employees earn 2.5 working days (counted Monday to Saturday) per full month once they have worked a year by 31 March, so 30 days a year, about 5 weeks (2 days a month in the first year). Usually 24 days are taken in summer and 6 in winter. Source

Koeaika Probation period

koeaika

A trial period of up to 6 months if agreed, extendable by one month for each 30 days of sickness or family leave. Either side may end the contract during it, but not on discriminatory or otherwise inappropriate grounds. Source

Muutosneuvottelut Change negotiations

muutosneuvottelut

The statutory consultation an employer with a workforce above a size threshold must hold with employee representatives before redundancies, layoffs or major reorganisations. Dismissals made without proper change negotiations can lead to compensation claims. Source

Työehtosopimus (TES) Collective agreement

työehtosopimus

Finland has no statutory minimum wage. Minimum pay, holiday bonus, working hours and many other terms come from sector collective agreements, many of which are declared generally binding (yleissitova) on all employers in the sector, members or not. Source

Työsopimuslaki Employment Contracts Act

työsopimuslaki

The main employment law. Dismissal needs a proper and weighty reason related to the employee, or financial and production-related grounds with no other work available. The employer's notice is 14 days up to 1 year's service, rising to 6 months after 12 years. There is no statutory severance, but unlawful termination costs 3–24 months' pay. Source

Vero Finnish Tax Administration

Verohallinto

The tax authority (website vero.fi). Employers register with it, withhold tax according to employees' tax cards, and pay withheld tax and the employer's health insurance contribution monthly. Pension contributions go to the employer's pension insurer instead. Source