Hiring your first employee in Finland: real costs and employer duties 2026

The first hire is the moment a company in Finland stops being simple. The salary itself is the easy part: around it sit pension insurance, the Incomes Register, occupational health care and a collective agreement you may not know applies to you. Here is what your first employee actually costs in 2026 and what has to be in place before the first workday, in plain English.

The real cost: budget about 1.2 times the gross salary

Statutory employer side costs in 2026 add up to roughly 20 percent on top of gross pay. For a 3,000 EUR monthly salary the math looks like this:

Two notes on the numbers. The accident insurance premium depends on the industry and insurer, so office work is cheaper than construction. The 0.31 percent unemployment rate applies to annual payroll up to 2,509,500 EUR, which covers every small business. On top of the monthly figures, remember that the employee earns paid annual holiday, 2 or 2.5 days per month worked, so in practice you fund roughly one extra month of salary per year, plus a holiday bonus if your collective agreement requires one.

Before the first workday: five things that must exist

• A written employment contract. Duties, salary, working hours, trial period, the collective agreement that applies. Finnish law accepts an oral contract, but you do not want one.
• TyEL pension insurance. Taken from a pension company such as Ilmarinen, Varma or Elo. This is mandatory for practically every employment relationship, even a small part-time one.
• Accident insurance. Statutory workers compensation from a non-life insurer, taken before work starts.
• Occupational health care. A statutory agreement with an occupational health provider is required even for one employee. The basic preventive package is enough to be compliant.
• The right collective agreement (TES). Most industries have a generally binding collective agreement that overrides your contract on minimum pay, holiday bonus and sick pay. Check yours before you promise terms.

Register in the Tax Administration's employer register when you employ two or more people permanently, or at least six temporary employees. With one employee you can act as a casual employer, but every insurance and report above still applies.

Every payday: the routine

• Withhold tax according to the employee's tax card and pay the net salary.
• Report the pay to the Incomes Register (tulorekisteri) within 5 calendar days of the payday. This deadline is strict and late filings collect penalty fees.
• Pay the withheld tax and the health insurance contribution to the Tax Administration by the 12th of the following month.
• TyEL, unemployment and accident insurance are billed by the insurers based on the reported salaries.

The mistakes I see first-time employers make

• Hiring through invoices to avoid the paperwork. If the person works under your direction, with your tools and only for you, Finnish law treats it as employment no matter what the contract says. The insurances and taxes arrive later, with interest.
• Skipping occupational health. It is the most commonly forgotten statutory item, and it is checked in inspections.
• Missing the 5-day Incomes Register deadline. The report is per payday, not per month.
• Ignoring the collective agreement. Minimum wages and holiday bonuses come from the TES, not from what you agreed in the room.