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The true cost of an employee in Finland: a guide to employer contributions
Statutory employer contributions add about 19.3% on top of salary, plus accident and group life insurance that only your insurer can quote. Every rate, with its source.
TL;DR
- Statutory employer contributions for 2026 total about 19.3% on top of gross salary.
- The pension contribution (TyEL) averages 17.10% for a contract employer in 2026.
- The unemployment insurance contribution is 0.31% of payroll, up sharply from last year.
- Accident insurance has no published rate, but the occupational safety charge within it is fixed at 1.75%.
- You must insure employees for unemployment and accident cover once you pay over EUR 1,500 in wages in a calendar year.
- The employer health insurance contribution applies to employees aged 16 to 67.
Someone asks what a EUR 4,000-a-month hire actually costs. The honest answer has two halves: a part you can look up to the decimal, and a part only your insurer can tell you.
The lookup-able part is about 19.3 per cent on top of gross salary for 2026. The rest — accident and group life insurance — has no published rate anywhere, by design.
Which employer contributions have a published rate?
All figures below are the 2026 rates published by the Tax Administration, with 2025 alongside so you can see which way they moved.
| Contribution | Paid to | 2026 | 2025 |
|---|---|---|---|
| Employer’s health insurance contribution | Tax Administration | 1.91% | 1.87% |
| Pension contribution (TyEL), contract employer average | Pension company | 17.10% | 17.38% |
| Unemployment insurance, up to EUR 2,509,500 of payroll | Työllisyysrahasto | 0.31% | 0.20% |
| Unemployment insurance, on the part above that | Työllisyysrahasto | 1.23% | 0.80% |
For a company under the payroll cap, that is 19.32 per cent.
On a EUR 4,000 monthly salary:
| Monthly | |
|---|---|
| Gross salary | EUR 4,000.00 |
| Pension, 17.10% | EUR 684.00 |
| Health insurance, 1.91% | EUR 76.40 |
| Unemployment, 0.31% | EUR 12.40 |
| Statutory subtotal | EUR 4,772.80 |
| Accident and group life insurance | quoted by your insurer |
Note what moved: the unemployment insurance contribution rose in both bands for 2026, while the pension contribution eased down. See the table above for the exact percentages in both years.
Next: if you budgeted headcount on last year’s numbers, the unemployment line is now roughly 55 per cent higher than you planned for.
What does the employee pay, and why isn’t it your cost?
Employees carry their own contributions, deducted from their pay. They are not an on-cost to you, but they explain why net pay is lower than people expect:
| Employee contribution | 2026 | 2025 |
|---|---|---|
| Pension, ages 17–52 and 63+ | 7.30% | 7.15% |
| Pension, ages 53–62 | 7.30% | 8.65% |
| Unemployment insurance | 0.89% | — |
| Health care contribution | 1.10% | — |
| Daily allowance contribution | 0.88%, or 0% if income is under EUR 17,255 | — |
One structural change in 2026: the age brackets for the pension contribution equalised — see the table above for the 2025 figures by age band. If you have staff aged 53 to 62, their net pay went up this year.
The Ministry of Social Affairs and Health confirms the total 2026 TyEL contribution at 24.4 per cent of pay, combining the employer and employee shares in the tables above. The employee’s health insurance contribution is inside their withholding rate, so you do not collect it separately.
Next: open your payroll provider’s contribution report and check pension and unemployment insurance appear as employee deductions, not on your own contribution line.
Which two contributions have no published rate?
Accident and occupational disease insurance has no published rate. This is not an oversight. Premiums are company-specific, pricing rests on free competition, and each insurer’s calculation bases are not public.
What the law does regulate is how insurers may price. Two models exist:
- Tariff-based — the default for most employers. The premium comes from the insurer’s risk classification for your industry, and the insurer must take your documented preventive safety work into account.
- Special-basis — available once your volume of work is large enough. Your own claims history feeds directly into the premium.
That second point is worth acting on. Documented safety work is one of the few levers you have on this line, and it only counts if it is documented.
One component is published: an occupational safety charge of 1.75 per cent of the compulsory insurance premium, which the insurer passes to the Workers’ Compensation Center and on to the Finnish Work Environment Fund.
Group life insurance is different in kind — you need it only where the collective agreement binding on you requires it. The insurer collects it alongside the accident premium and invoices it separately, and it too varies by industry and company. Which agreement binds you is settled in Which collective agreement binds you?
Next: ask your insurer for your current accident insurance rate as a percentage of payroll. Most employers know the euro figure and not the rate, which makes the number impossible to plan with.
When does each contribution obligation start?
The thresholds are not the same, so a very small payroll does not trigger everything at once.
| Contribution | Triggered when | Employee ages |
|---|---|---|
| Health insurance | Employee is insured in Finland under the Health Insurance Act | 16–67 |
| Pension (TyEL) | Monthly earnings exceed the lower insurance limit | 17+, end depends on year of birth |
| Unemployment insurance | You pay over EUR 1,500 in wages in a calendar year | 18–64 |
| Accident insurance | You pay over EUR 1,500 in wages in a calendar year | all |
| Group life insurance | Your collective agreement requires it | — |
Two details catch people out. The health insurance contribution is payable even where no withholding can be made — for instance where pay is given purely as a benefit in kind, or where the tax card requires no withholding. And accident insurance must be in force the moment the employee starts work, not from the end of the month.
There is also a rule that surprises small employers: you must always withhold the employee’s unemployment contribution from their pay, even if your annual payroll never crosses EUR 1,500. If it does not, the withheld amount stays with you.
One exclusion worth knowing: no health insurance contribution is payable on a fee for work paid to a contractor rather than as salary (työkorvaus). Which is only a saving if the classification is genuinely right, and that is covered in Worker classification in Finland.
Next: check each new hire’s date of birth against the age thresholds in the table above before you run their first payslip.
What isn’t included in the 19.3%?
The 19.3 per cent is statutory social insurance only. Three further costs are real but sit outside it:
- Occupational health care, which you are obliged to arrange. It is a service cost rather than a percentage, and Kela (Finland’s social insurance institution) reimburses part of it.
- Holiday pay and any holiday pay supplement (lomaraha). These are pay rather than on-costs, but they raise the annual total — and the supplement is a collective agreement benefit, not a statutory one. See How does annual leave accrue?
- Sick pay, which you carry for the day of illness plus nine weekdays before Kela takes over. See Sick pay in Finland.
Next: check your payroll setup itemises occupational health care, holiday pay and sick pay separately from the 19.3 per cent statutory line above.
How does Taito.ai help with this?
Taito.ai sets up and keeps maintained the employment record that decides who is in scope for contributions: start and end dates, age, and which collective agreement applies. Those inputs stay current for whoever runs your payroll.
Sources
- Tax Administration — social insurance contributions (all employer and employee contribution rates above)
- Ministry of Social Affairs and Health — 2026 pension contributions confirmed
- Työllisyysrahasto — paying the unemployment insurance contribution
- Workers’ Compensation Center — insurance premiums
- Act on the Financing of Unemployment Benefits 555/1998
- Kela — reimbursement of occupational health care costs
- Kela — the employer’s sick pay period before Kela takes over
Rates are confirmed annually. Every figure here carries the year it applies to — check the source before using one in a calculation for a different year.
Disclaimer
Taito.ai does not provide legal, tax or accounting advice. This article is general information about the law as it stood on the date above, not advice on your situation, and it is not a substitute for it. Rates and thresholds change. Check with a qualified adviser before acting on anything here.
