Annual leave and holiday pay in Finland

Annual leave

Annual leave is determined by the applicable collective agreement and the Finnish Annual Holidays Act. If the collective agreement does not specify rules regarding annual leave, the provisions of the Annual Holidays Act apply.

The leave accrual year runs from April 1 to March 31 (the period during which annual leave is accrued).

Summer leave period: May 2 to September 30
Winter leave period: October 1 to April 30

According to the Annual Holidays Act, employees accrue up to 30 days of annual leave during the leave accrual year if they are entitled to “full holidays.” Accrued leave is primarily intended to be taken as vacation. However, any unused leave at the end of an employment relationship can be compensated monetarily.

How is leave accrued?

To accrue annual leave, an employee must work at least 14 days or 35 hours in a month. During the first year of employment, employees accrue 2 days of leave per month, totaling 24 days of annual leave. After the first year, employees accrue 2.5 days of leave per month, amounting to 30 days of annual leave per year.

For employees paid based on hours or tasks rather than weekly or monthly salaries, annual holiday pay is calculated as a percentage of their earnings if they work at least 35 hours per month. If the employment has lasted less than one year by the end of the accrual year, holiday pay equals 9% of the wages paid during the accrual year. If the employment has lasted more than one year by March 31, the percentage increases to 11.5%.

Using annual leave

Of the accrued annual leave, 24 weekdays must be allocated to the summer leave period. The remaining six days (winter leave) must be taken before the next summer leave period. Ideally, expiring leave should be used by May 2.

Employers must grant summer and winter leave in continuous periods unless operational needs prevent this. Employees must have at least a continuous 12-weekday leave period under the Annual Holidays Act. By mutual agreement, leave exceeding 12 weekdays can be taken in one or several periods.

Before deciding on the timing of leave, employers must allow employees to express their preferences. Employers should consider employee requests and ensure fairness in scheduling. Once the timing is decided, the employer must inform the employee at least one month in advance, or no later than two weeks if the one-month notice is not possible.

Mandatory Saturdays as leave days

In the Annual Holidays Act and most collective agreements, Saturdays are considered part of a five-day workweek, making them leave days. If a collective agreement defines the workweek as Monday through Friday, Saturdays are not counted as leave days.

Public Holidays

Public holidays, such as Christmas and Finland’s Independence Day, do not count as leave days. Taking leave during these days does not reduce the number of accrued leave days. Similarly, Midsummer Eve, Midsummer Day, and Easter Saturday are not counted as leave days. Good Friday and Easter Monday are public holidays and do not count as leave days either.

For example, if an employee takes leave during a week when Finland’s Independence Day falls on a weekday, only five leave days are used for the week-long leave.

Impact of Collective Agreements on Leave

Collective agreements may influence leave accrual and usage. Different industries may have specific exceptions or clarifications regarding leave calculation. Leave may also accrue during certain periods of sick leave or family leave. Employees should consult their employer’s collective agreement for details.

Holiday Pay

The Annual Holidays Act does not mandate holiday pay. However, holiday pay is typically determined in collective agreements. In the absence of a collective agreement, the employer decides whether to pay holiday pay. Companies can pay holiday pay for statutorily accrued annual leave, usually amounting to 50% of the vacation pay.

For example, summer holiday pay may be paid in June, and winter holiday pay in March, or alternatively, based on the number of leave days taken. It is common for companies to require employees to return to work after their leave to be eligible for holiday pay.

Employees may, with their manager’s approval, convert summer holiday pay into time off if operational needs allow. Full summer holiday pay (24 days) can be converted into 12 weekdays, or two weeks, of additional leave.

Illness during annual leave, holiday pay, or compensatory leave

If an employee falls ill during annual leave, they are entitled to have leave days exceeding six sick days postponed. According to the Annual Holidays Act, the postponement requires an explicit request from the employee. These sick days cannot reduce the employee’s right to a four-week annual leave (Annual Holidays Act, Chapter 5, Section 22).

Employees must promptly submit a written request to postpone their leave and provide a medical certificate.

The right to postpone leave under the Annual Holidays Act does not apply to holiday pay or compensatory leave. These days are consumed as agreed, even during illness.

For assistance or further information regarding annual leave, please contact our payroll team! You will find the contact details further down on this page.