Employer payroll costs: Employer’s social security contributions
As an employer, you are responsible for your employees’ pension cover and other statutory social security benefits. When you hire an employee, the total cost includes not only the salary but also earnings-related pension, accident, unemployment, health insurance, and group life insurance contributions.
This page helps you understand:
Employer contributions typically add approximately 20–25% on top of an employee’s salary.
What does it cost to hire an employee?
Employing a worker involves costs in addition to the salary paid. Statutory employer contributions include:
- Earnings-related pension contribution (TyEL)
- Occupational accident and occupational disease insurance contribution
- Unemployment insurance contribution
- Health insurance contribution
- Group life insurance contribution
If you are an entrepreneur or represent a micro-enterprise and are considering hiring your first employee, it is a good idea to estimate the total employment costs before making a recruitment decision.
You can calculate the total cost of employing an employee using our salary calculator.
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Go to the salary calculator
The TyEL contribution is the largest employer social security contribution
TyEL insurance (earnings-related pension insurance) accrues benefits such as a partial old-age pension, disability pension, old-age pension and survivors’ pensions.
Every employee aged 17 or over who works under an employment contract must be insured under the Employees Pensions Act (TyEL), regardless of nationality, working hours or the number of employees.
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TyEL insurance earnings threshold
Take out TyEL insurance for your employee when the salary you pay exceeds the annual earnings threshold. The threshold changes each year.
In 2026, the threshold for TyEL insurance is €71.72 per month. Once this amount is exceeded, you are required to provide earnings-related pension insurance for your employee.
Even if the salary remains below the TyEL threshold, you must always report the wage information to the Finnish Incomes Register.
TyEL contribution rate in 2026
The basic TyEL contribution for a contract employer in 2026 is 24.85% of payroll, plus a company-specific administrative cost component.
If your payroll in 2024 was less than €2,455,500, your TyEL contribution rate with Ilmarinen will be no more than 25.03%, including administrative costs.
The TyEL contribution is shared between the employer and the employee. In 2026, the employer’s share is on average 17.10% of gross payroll. The employee’s share is 7.30% of salary and is withheld directly from the employee’s pay.
In the Employer’s webservice, you can view your company’s current TyEL contribution rate, estimate future contributions and see any discounts you may be entitled to.
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Check your TyEL contributions online
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Calculate the cost of TyEL insurance
Other employer social security contributions
In addition to TyEL contributions, employers must also take care of other statutory insurance and social security contributions.
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Occupational accident and occupational disease insurance protects employees against workplace accidents and occupational diseases.
The premium is determined by factors such as payroll, the risk level of the work and the type of insurance. The average contribution in 2026 is 0.51% of payroll.
Accident insurance is mandatory, and the employer pays the full premium.
Learn more about accident insurance (op.fi)
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Unemployment insurance contributions help fund unemployment benefits. In 2026, the employer’s unemployment insurance contribution is:
- 0.31% of payroll up to €2,509,500
- 1.23% on the portion exceeding €2,509,500
The employer pays the contribution to the Employment Fund.
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Group life insurance is usually arranged together with accident insurance.
In 2026, the contribution is 0.06% of payroll, and the employer pays the full cost.
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Health insurance covers costs and loss of income related to illness, pregnancy and family leave.
The employer’s health insurance contribution in 2026 is 1.91% of payroll. The employer pays this contribution to the Finnish Tax Administration as part of employer tax payments.
Self-employed persons insure their own work with YEL insurance
When a self-employed person hires employees, statutory employer insurance and reporting obligations also apply. As a result, employer social security contributions become part of the employee’s total employment cost.
If you are planning to hire your first employee, estimate the total costs in advance and ensure that all necessary insurance policies are in place.
Frequently asked questions about employer contributions
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Employer payroll costs consist of:
- TyEL contribution
- Accident insurance
- Group life insurance
- Unemployment insurance contribution
- Health insurance contribution
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The total cost of employing someone consists of the salary paid plus the employer’s statutory contributions and insurance premiums.
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Yes, if the conditions for TyEL insurance are met. In 2026, the TyEL insurance earnings threshold is €71.72 per month.
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- Calculate employment costs: Employer calculators and tools
- Check your company’s TyEL contributions: Log in to the online service
- Find out whether you are: a contract employer or an occasional employer
- Learn how the TyEL contribution is calculated: Read more about TyEL contributions