Work, taxes and the welfare state in Finland explained

Quick answers

Does Finland have a minimum wage?

The law has no general minimum wage. Minimum pay is agreed in the sector's collective agreement (työehtosopimus, TES), and the employer may not pay less.

What is a tax card?

The Tax Administration's information on your tax rate (verokortti). Your employer withholds tax from your pay based on it. Without a tax card the withholding is 60 percent.

What does Kela do?

Kela, the Social Insurance Institution (Kansaneläkelaitos), pays residence-based benefits, for example child benefit, the national pension and the general benefit for the unemployed.

Who organises health care?

Public health care is organised by 21 wellbeing services counties (hyvinvointialueet). Helsinki organises its own services.

This chapter covers working life, taxes and social security in Finland. Our course is based on public sources such as laws, InfoFinland, the Tax Administration and Kela, and we will update it when the Finnish Immigration Service (Migri) publishes its official material.

What is agreed in an employment contract?

When you start a job, you and the employer make an employment contract (työsopimus). It covers the work, the pay and the working hours. The contract is usually made in writing, but an oral contract is also valid.

An employment contract is usually valid until further notice (toistaiseksi). A fixed-term contract usually needs a justified reason, for example seasonal work. Since June 2026, no reason is needed if the employee has not worked for the same employer in the previous five years. Then the contract can last at most one year. There can be a trial period (koeaika) at the start, which under the Employment Contracts Act is at most six months.

Does Finland have a minimum wage?

Finnish law has no general minimum wage. Minimum pay is agreed in collective agreements (työehtosopimus, TES). They are sector agreements between unions and employers’ associations on, for example, pay, working hours and holidays. Some collective agreements are generally binding (yleissitova). Then all employers in the sector must follow them.

Under the Working Hours Act, regular working hours are at most 8 hours a day and 40 hours a week. Overtime (ylityö) is paid at a higher rate, at least 50 percent more. You earn two or two and a half days of annual holiday (vuosiloma) for each month in which you work at least 14 days or 35 hours.

What do trade unions and unemployment funds do?

The Constitution protects the freedom to form and join trade unions. You may join a trade union (ammattiliitto), but you do not have to. Trade unions negotiate pay and terms of employment. Finland has about 80 trade unions, and they belong to three central organisations: SAK, STTK and Akava.

An unemployment fund (työttömyyskassa) is a different thing from a trade union. A member of the fund can get an earnings-related daily allowance (ansiopäiväraha) when unemployed, if they have been a member and have worked long enough.

Who takes care of safety at work?

The employer is responsible for making work safe and healthy. If a workplace has at least ten employees, they elect an occupational safety and health representative (työsuojeluvaltuutettu). Since the start of 2026, the occupational safety and health authority has been the Finnish Supervisory Agency (Lupa- ja valvontavirasto), which inspects workplaces.

Since the start of 2025, jobseekers have been served by the municipal employment services (työllisyyspalvelut). At the same time the TE offices were closed. If you become unemployed, register at once as a jobseeker on the Työmarkkinatori online service.

How are taxes paid in Finland?

Tax money pays, for example, for health care, education, early childhood education and care, and national defence. According to the Constitution, state taxes are laid down by an act of law, and municipalities have their own right to levy taxes.

Earned income is taxed progressively (progressiivinen): the higher your income, the higher your tax rate. State income tax, municipal tax (kunnallisvero), the health insurance contribution and the Yle tax are withheld from your pay. Members of the Evangelical Lutheran and Orthodox churches also pay church tax (kirkollisvero).

What is a tax card?

The tax card (verokortti) shows your tax rate. You get it from the Tax Administration (Verohallinto), and a new tax card comes at the turn of the year. You can also find it in the OmaVero service. Give your tax card information to your employer before your first payday. Without a tax card, the employer must withhold 60 percent of your pay.

Every year the Tax Administration sends a pre-completed tax return (esitäytetty veroilmoitus), which you must always check. If too much tax was withheld, you get a tax refund (veronpalautus). If too little, you pay back taxes (jäännösvero).

When you shop, you pay value added tax (arvonlisävero, alv). The general rate is 25.5 percent. For example food and medicines have a rate of 13.5 percent from the start of 2026.

What does the welfare state offer?

The Constitution guarantees everyone the right to basic income security, for example during unemployment, illness and old age. This is called social security (sosiaaliturva).

Kela, the Social Insurance Institution (Kansaneläkelaitos), pays residence-based benefits. Kela supports, for example, families with children, unemployed people and students. From 1 May 2026, Kela pays the general social security benefit (yleistuki) to unemployed people who are not entitled to the earnings-related allowance. Child benefit (lapsilisä) is paid for children under 17, and it is tax-free.

Public health care is organised by the wellbeing services counties (hyvinvointialueet). There are 21 of them, and Helsinki organises its own services. The emergency number is 112.

Pre-primary education, basic education and upper secondary education are free. Compulsory education (oppivelvollisuus) lasts until a young person gets an upper secondary qualification or turns 18.

The earnings-related pension (työeläke) is earned through paid work. If your earnings-related pension is small or you have none, Kela pays the national pension (kansaneläke) and the guarantee pension (takuueläke). The retirement age depends on your year of birth.

What should you remember from this chapter?

• How an employment contract differs from a collective agreement, and that there is no statutory minimum wage.
• Regular working hours: 8 hours a day and 40 hours a week.
• A trade union and an unemployment fund are different things, and membership is voluntary.
• Taxation is progressive, and without a tax card the withholding is 60 percent.
• Kela pays residence-based benefits, and the wellbeing services counties organise health care.
• Basic education is free, and compulsory education lasts until age 18 or an upper secondary qualification.

Practise chapter 8

Test yourself with the chapter 8 questions. We wrote these practice questions ourselves; they are not official test questions. The questions are in Finnish, because the test is taken in Finnish or Swedish. The practice test mixes questions from all chapters.

Difficult words in this chapter

työsopimus

employment contract: the agreement between employee and employer on the work, the pay and the working hours

työehtosopimus

collective agreement: an agreement between unions and employers' associations on the minimum terms in a sector; short form TES

ammattiliitto

trade union: an organisation of employees that negotiates pay and terms of employment

työttömyyskassa

unemployment fund: a fund that pays its members an earnings-related allowance during unemployment

verokortti

tax card: the Tax Administration's information on what percentage of your pay is withheld as tax

arvonlisävero

value added tax: a tax included in the price of most goods and services; short form alv

Kela

the Social Insurance Institution (Kansaneläkelaitos), which pays residence-based benefits

hyvinvointialue

wellbeing services county: an area that organises social and health services and rescue services