Your first employee in Finland: an employer’s checklist for 2026

Checklist before the first working day

1. 1Make an employment contract and give a written statement of the key terms of employment.
2. 2Check whether a generally binding collective agreement (TES) covers your industry. It sets the minimum pay, supplements and often group life insurance.
3. 3Take out TyEL pension insurance with an earnings-related pension company.
4. 4Take out statutory accident insurance before work begins.
5. 5Make a written agreement on occupational health care.
6. 6Get the tax card details and agree on the payday and pay period.
7. 7Find out whether the company must register in the employer register.
8. 8Set up payroll and Incomes Register reporting so that the first salary is paid correctly.

Employment contract: what it must contain

Under the Employment Contracts Act, a contract can be made orally, in writing or electronically. The employer must still give the employee a written statement of the key terms of employment if they are not in a written contract. The easiest way is a written contract that covers everything. No statement is needed if the working time averages three hours a week or less over four consecutive weeks.

The statement must include at least:

• the employer and the employee and their domicile or place of business
• the start date and, for a fixed-term contract, the end date and the reason for the fixed term
• the place of work and the main duties
• the basis for pay and other remuneration and the pay period
• the working time
• how annual leave is determined and the notice period
• the applicable collective agreement
• the trial period, if one has been agreed
• any right to training provided by the employer
• the insurer that provides the employee’s pension and accident insurance

Part of the information must be given within seven days and the rest within a month of the start of work. A trial period can be agreed: up to six months, and in a fixed-term contract no more than half of its duration. If a generally binding collective agreement covers the industry, its terms are the minimum, and the contract cannot agree on worse terms. If no collective agreement applies and pay has not been agreed, the employee must be paid a customary and reasonable wage.

Tax card and withholding

The employer withholds tax from the salary according to the employee’s tax card. Payroll software can fetch the tax card details directly from the Tax Administration through the Vero API, or the employee hands over the tax card. The employee may also tell the employer to use a higher rate. If there is no tax card, the withholding is 60%.

The employee’s health insurance contribution is already included in the withholding rate. In addition, the employee’s share of the pension contribution (7.30% in 2026) and of the unemployment insurance contribution (0.89% in 2026) is deducted from the salary. Withholdings and the employer’s health insurance contribution are paid in MyTax (OmaVero) by the 12th day of the month after the payment month.

Incomes Register: two reports and their deadlines

• An earnings payment report for each employee within 5 days of the payment date. The payment date is the day the salary is available to the employee. If the deadline falls on a Saturday, Sunday or public holiday, you can report on the next working day.
• An employer’s separate report on the employer’s health insurance contribution once a month, by the 5th day of the month after the payment month.
• All wages are reported whatever the amount: there is no euro threshold. The report is filed even if the company is not in the employer register.
• A company in the employer register must file the separate report also for months with no wages paid (the “No wages payable” entry).

Late reports incur a late-filing fee, and if a report is not filed at all, the Tax Administration can impose a negligence penalty of up to €15,000 per missing report. If no reports arrive, the Tax Administration estimates the wages and imposes the taxes and a tax increase. Incomes Register data also goes to the pension company and the Employment Fund, which invoice on that basis.

Employer register: when registration is mandatory

A regular employer must always register in the Tax Administration’s employer register. A company is a regular employer when it:

• pays wages on a permanent basis to two or more employees,
• pays wages on a permanent basis to one employee and also to one or more temporary or short-term employees, or
• pays wages to at least six employees at the same time, even if all of them are temporary.

A company with only one permanent employee, or with 1–5 employees whose employment does not last the whole calendar year, is an occasional employer and does not have to register. Wages are still reported to the Incomes Register. An occasional employer always pays employer contributions monthly, as it cannot apply for a longer tax period. You register in MyTax or with a change notification in the YTJ.

Employer contributions in 2026

• Pension contribution (TyEL): on average 24.40% of the salary. The employee share is 7.30% for all age groups, leaving the employer an average of 17.10%. Your exact rate comes from your pension company.
• Unemployment insurance contribution: the employer pays 0.31% of the payroll up to €2,509,500 and 1.23% on the part above it. The employee share is 0.89%. It applies to employees aged 18–64. The employer’s own obligation starts when the wages paid in a calendar year exceed €1,500 in total, but the employee share is always withheld from pay, even below that limit. The Employment Fund (Työllisyysrahasto) invoices four times a year based on Incomes Register data.
• Employer’s health insurance contribution: 1.91% of the salary (1.87% in 2025), for employees aged 16–67.
• Accident insurance: the premium varies by industry and company and is invoiced by the insurer.
• Group life insurance: paid if the collective agreement requires it, usually invoiced together with the accident insurance.

Example: on a gross salary of €3,000 a month, with the average TyEL rate the employer pays €513.00 in pension contributions, €9.30 in unemployment insurance and €57.30 in health insurance. That is €579.60, about 19.3% of the salary, plus accident and group life insurance. In addition, €219.00 in pension contributions and €26.70 in unemployment insurance are deducted from the employee’s salary. Tax is withheld from the gross salary, and the employee’s shares are deducted on top of that.

The percentages are the 2026 rates. Sources: Tax Administration, social insurance contributions (updated 8 December 2025), the Employment Fund (2026 unemployment insurance contributions) and the Finnish Centre for Pensions (statutory social insurance contributions 2026). The TyEL rate is an average; your pension company tells you your own rate. Rates change every year.

Mandatory insurance

• TyEL insurance covers employees aged 17 or over whose monthly earnings exceed the lower limit of the insurance obligation. The limit is so low that practically every salary is covered. Pension cover must be arranged at the latest before the wages must be reported to the Incomes Register.
• According to the Tax Administration, accident insurance is required if you pay more than €1,500 in wages in a calendar year. It must be in force from the moment the employee starts work.
• Group life insurance can become mandatory if the collective agreement that applies to the employer requires it.

Occupational health care

The employer must arrange preventive occupational health care at its own expense, already for the first employee. A written agreement is made with the service provider, and the employer must have a written action plan that is reviewed every year. Medical care on top of that is voluntary.

On application, Kela reimburses 60% of the approved costs of preventive occupational health care and 50% of medical care, up to a calculated maximum. The reimbursement is claimed afterwards for each financial period, within 6 months of the end of the period.

Pay slip and paying the salary

The salary is paid to the bank account given by the employee and must be available on the due date. A monthly salary is paid once a month unless agreed otherwise. With every payment the employee gets a pay slip showing the amount of pay and how it was determined. In practice the slip shows the gross salary and supplements, benefits in kind, the tax withheld, the employee’s pension and unemployment contributions and the net pay.

Annual leave and holiday pay in brief

• Leave accrues at two weekdays (Mon–Sat) for each full accrual month if the employment has lasted less than a year by the end of the holiday credit year. After that it is two and a half weekdays a month. The holiday credit year runs from 1 April to 31 March.
• A full accrual month is a month with at least 14 working days. If the employee works on fewer days, a month counts as full with at least 35 working hours.
• Holiday pay is paid before the leave starts. For a leave period of up to six days it can be paid on the normal payday.
• If the employee is not on a weekly or monthly salary and works fewer than 14 days a month, holiday pay is 9% of wages, or 11.5% if the employment has lasted at least a year by the end of the holiday credit year (31 March).
• When employment ends, unused leave is paid as holiday compensation. The Annual Holidays Act does not require a holiday bonus (lomaraha); it usually comes from the collective agreement or the employment contract.

Common mistakes with a first employee

• Work starts before the accident insurance is in force.
• Salary is paid without a tax card: 60% is withheld and the employee waits for the excess tax to come back.
• The 2025 rates stay in the payroll software. In 2026 the employee’s unemployment contribution is 0.89% (previously 0.59%) and the pension contribution is 7.30% for everyone.
• The earnings payment report or the separate report is late. A company in the employer register forgets the “No wages payable” entry for a month without pay.
• The collective agreement is not checked, and pay, supplements or the holiday bonus fall below the generally binding TES.
• No occupational health care agreement is made, or the Kela reimbursement is not claimed within 6 months.
• The salary is paid in cash or without a pay slip.

We run payroll from your first employee

Tilitoimisto Debit Credit helps companies hire their first employee correctly: we check the pay terms of the contract against the collective agreement, calculate salaries with the 2026 rates, prepare pay slips and Incomes Register reports on time, and take care of employer contributions and holiday pay. We work in Finnish and Russian. Get in touch and we will go through your company’s situation before the first payday.

Official sources

• Vero: social insurance contributions 2026
• Vero: how to report wages and employer contributions
• Vero: employer register
• Vero: tax card instructions for employers (in Finnish)
• Employment Fund: 2026 unemployment insurance contributions (in Finnish)
• Vero: negligence penalty for Incomes Register reporting (in Finnish)
• Kela: occupational health care reimbursement (in Finnish)
• Suomi.fi: recruitment checklist for employers
• Finlex: Employment Contracts Act (55/2001)
• Finlex: Annual Holidays Act (162/2005)
• Finlex: Occupational Health Care Act (1383/2001)