Hiring your first employee
When you hire an employee, you also need to take care of your employee’s pension cover. In some cases you are also responsible for their other social security.
Take care of your employee’s pension security
When you become an employer, you take on new responsibilities. One of them is taking care of your employee’s pension security. The pension cover of your employee is your responsibility when
- the employee is between 17 and 68 years of age
- you pay him or her at least EUR 65.26 per month in 2023 (EUR 62,88 in 2022).
Your employee’s pension cover is your responsibility regardless of whether you hire him or her for a fixed term or for an indefinite period or whether you hire one or several employees.
There are two alternative ways for you to take care of your employee’s pension cover: take out employees’ pension insurance, i.e. TyEL insurance, or just pay the TyEL contribution. The alternative you should choose depends on whether you are a temporary employer or a contract employer.
You are also responsible for your employee’s other social security
As an employer, you may be responsible for your employee’s other social security in addition to his or her pension cover. This is the case when you pay a salary of more than EUR 1,300 to your employee during a calendar year. You also pay additional employer costs, i.e. non-wage labour costs, in addition to the salary. These additional employer costs consist of three insurance contributions. The insurances are
- workers’ compensation insurance
- unemployment insurance
- group life insurance.
Take out these insurances for your employees. You can take out the workers’ compensation insurance and the group life insurance with the insurance company of your choosing. However, you can take out the unemployment insurance only with the Employment Fund. Read about the Employment Fund’s services (tyollisyysrahasto.fi).
Always deduct the unemployment contribution
Always deduct the unemployment insurance contribution, even if the salary you pay to the employee does not exceed the lower limit. In that case, you as an employer will keep the share that you deduct. If the wages and salaries you pay exceed the lower limit set by the tax authority, also pay the social security contribution, i.e. the health insurance contribution, in addition to these three insurance contributions.
This is how you pay insurance contributions
Pay the social insurance contributions in full to the pension and insurance companies. Deduct the employee’s share from their pay when paying wages. Learn about employees’ social security and contributions.
Responsibilities, but also many benefits!
In addition to these mandatory expenses, also prepare for other costs, such as sick leave pay and costs related to occupational health care and parental leave. Kela will reimburse part of these for you.
As an employer, you have many obligations, but having a new colleague also has many benefits. Good luck!
Learn about insuring employees and file an insurance application conveniently online
Example of additional employer costs
If you pay your employee a salary of EUR 2,000 per month, your employee costs you around EUR 2,650, including the mandatory additional costs.
Use our calculator to find out your employee’s non-wage labour costs. The calculator shows you an itemisation of the non-wage labour costs, i.e. how much you pay in pension contributions and in other mandatory insurance contributions.