First employee in Finland: what it costs on top of the salary

Published 15 September 2026

The first hire changes more than the headcount. From the first payday your company owes contributions and insurance premiums on top of the salary, withholds the employee's own share, and reports every payment within days. Here is what that adds up to in 2026, worked through for a salary of 3 000 euros a month.

What you pay on top of the salary

Five items sit on top of the gross salary. Only the pension is large.

Earnings-related pension (TyEL). In 2026 the total TyEL contribution averages 24.40 % of wages. The employee pays 7.30 % of it, the same at every age, and you withhold that from their pay; the employer's share averages 17.10 %. Your own rate comes from your pension company: for a contract employer the 2026 basic contribution is 24.85 %, plus the company's administration charge, less client bonuses. You need a TyEL contract once you employ someone on a continuing basis, or pay more than 10 272 euros in wages over six months.

Unemployment insurance. The employer pays 0.31 % on the first 2 509 500 euros of annual payroll and 1.23 % above that, so a small company pays 0.31 %. The employee's 0.89 % is withheld from pay.

Employer's health insurance contribution. 1.91 % of wages in 2026, paid to the Tax Administration. It is due even when no tax is withheld.

Accident insurance. Statutory accident and occupational disease insurance (työtapaturma- ja ammattitautivakuutus) is compulsory and must be in place before the work begins; it cannot be taken out retroactively. The premium depends on how hazardous the work is and on the insurer. The Workers' Compensation Center puts the range at 0.05 % to 5 % of wages and forecasts an average of 0.48 % for 2026.

Group life insurance. Compulsory when your sector's national collective agreement requires it, which in practice covers almost every employee with accident insurance. It comes with the accident policy and costs little: a forecast average of 0.053 % of wages in 2026.

What you withhold from the employee

From the gross salary you deduct:

tax at the rate on the employee's tax card, or 60 % if they have not given you one
their pension contribution, 7.30 %
their unemployment insurance contribution, 0.89 %

The employee's own health insurance contribution is already inside the tax card percentage. None of this costs you anything: it comes out of the salary, and you pay it on.

An example: 3 000 euros a month

An employee aged 30 on 3 000 euros a month, in a small company, at 2026 rates:

gross salary: 3 000.00 euros
pension, employer's average share of 17.10 %: 513.00 euros
health insurance contribution, 1.91 %: 57.30 euros
unemployment insurance, 0.31 %: 9.30 euros
accident insurance at the 2026 average of 0.48 %: 14.40 euros
group life insurance at the 2026 average of 0.053 %: 1.59 euros

That is 3 595.59 euros a month, just under 20 % on top of the salary, or about 43 100 euros a year before any holiday bonus. Treat it as approximate: accident insurance is priced per insurer and line of work, and your pension company's rate replaces the average.

On the employee's side, 219.00 euros of pension and 26.70 euros of unemployment insurance come off, leaving 2 754.30 euros before tax.

Reporting to the Incomes Register

Every pay run goes to the Incomes Register (tulorekisteri) on an earnings payment report within five days of payday, the day the money is available to the employee. If the fifth day is a weekend or a holiday, you can report on the next business day. By the 5th of the following month you also file the employer's separate report, which carries the month's health insurance contribution. Your pension company and the Employment Fund invoice you from the same data.

With one employee you are usually a casual employer: you need not join the employer register, you file the separate report only for months with wages, and your tax period is always the calendar month. Registration becomes compulsory once, for example, you regularly pay two or more employees.

When the money goes out

On payday only the net pay leaves your account. The rest follows, and each item sits in the books as a liability until it is paid:

Tax Administration: the withheld tax and the employer's health insurance contribution, paid in MyTax by the 12th of the month after the payday month, or on the next business day if the 12th is a weekend or a public holiday.
Pension company: a monthly TyEL invoice for both shares. If you report to the Incomes Register on time, it is normally due on the last day of the month after the payday month.
Employment Fund: both shares of unemployment insurance, invoiced four times a year, in April, July, October and January.
Accident insurer: the accident and group life premiums, on the insurer's invoice.

Holiday pay builds up every month

An employee earns paid leave as they work: two days for each full month if the employment has lasted less than a year by 31 March, and two and a half days once it has lasted a year. On a monthly salary they keep their pay while on holiday, so holiday pay is not an extra salary, but it is earned now and paid later. Leave earned but not yet taken at the end of your financial year is a holiday pay liability (lomapalkkavelka), and it has to be booked under accrued liabilities together with the employer contributions on it. A holiday bonus (lomaraha) is not required by the Annual Holidays Act; if your collective agreement has one, for example 50 % of the holiday pay, it is a real extra cost.

If the employee is you

If you work in a managing position in your own Oy and own more than 30 % of it alone, or more than 50 % together with family members, you are insured under YEL, the self-employed persons' pension, not TyEL. Voting rights count as well as shares, so check where you stand before your first payslip.

What we do

We run payroll for small employers from the first hire: the payslips, the Incomes Register reports, the payments on the 12th and the bookings behind them, holiday pay liability included. If you are about to hire, book an introduction and bring the salary you have in mind; we can go through the first month's numbers with you. See what we do.

Sources

Please note: this is general information about Finnish rules, not advice for your own situation, and the rules change. Ask us before you act on it.

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