Hiring your first employee in Finland: the paperwork, in order

Karma Accounts · Published 1 October 2026 · Updated 3 November 2026

Hiring your first employee in Finland takes a handful of steps, and their order matters. Accident insurance must be in place before the work starts. The key terms of employment must be in writing within seven days of the first working day. Occupational health care is compulsory from the first employee. From the first payday, each pay run is reported to the Incomes Register within five days. What all of this costs each month is in our article on the costs of a first employee.

How payroll works with a first employee, step by step

Check whether you must register as an employer. With one regular employee you are a casual employer and need not join the Tax Administration's employer register. Registration is compulsory when you regularly pay wages to two or more employees, or to six or more at the same time.
Agree the employment contract. Give the key terms in writing within seven days of the first working day, unless a written contract already covers them.
Take out accident insurance before the employment begins. The obligation applies once the wages you pay, or have agreed to pay, in a calendar year exceed 1 500 euros (the limit for 2024–2026).
Arrange TyEL pension insurance. A continuing employee, or more than 10 272 euros of wages over six months in 2026, means a TyEL contract with a pension company; below that, a temporary employer pays the contributions without one.
Ask for the tax card. Withhold tax at the rate on the card; without one, 60 %.
Give a payslip on every payday, showing the amount of the pay and how it was worked out (Employment Contracts Act, chapter 2, section 16).
Report to the Incomes Register (tulorekisteri) within five days of the payment date, and file the employer's separate report by the 5th of the following month.
Pay the employer's contributions, the withheld tax and the employer's health insurance contribution, in MyTax by the 12th of the month after the payday.
Keep track of holiday. The employee earns two days of annual leave for each full holiday credit month if the employment has lasted less than a year by 31 March, the end of the holiday credit year, and 2.5 days once it has lasted a year. Leave earned but not taken at your year end is booked as a holiday pay liability.

We do steps 6 to 9 on every payday as our payroll service, for 15 euros per payslip plus VAT. The sections below go through each step in more detail.

Before the first working day

Check your collective agreement. If a generally binding collective agreement covers your sector, you must follow its minimum pay, working hours and other terms even if you are not a member of an employers' association.
Take out accident insurance. Statutory accident and occupational disease insurance must be in place before the work begins; it cannot be taken out afterwards.
Agree on occupational health care. It is compulsory from the first employee. Make a written agreement with a provider and an action plan with them. Kela reimburses 60 % of the approved costs of preventive care and 50 % of medical care, within a ceiling per employee.
Assess the risks of the work. The Occupational Safety and Health Act requires you to identify the hazards of the work and plan how to manage them, however small the workplace.

In the first week: the terms in writing

An employment contract can be oral, but the employee must then get a written statement of the key terms. The first group of terms is due within seven days of starting work:

the employer's and employee's domicile or place of business
the start date of the work, and any trial period
where the work is done
the main duties
the basis of pay and other remuneration, and the pay period
the working hours.

The rest of the statement is due within one month. The duty applies once the employee works at least three hours a week over four consecutive weeks. A written employment contract that covers these terms does the same job, and the Occupational Safety and Health Administration publishes a model statement.

Before the first payday

Ask for the tax card. Without one you must withhold 60 %.
Arrange TyEL pension cover. Earnings-related pension contributions are due on your employee's wages from the start. If you employ someone on a continuing basis, or pay more than 10 272 euros in wages over six months in 2026, you need a TyEL insurance contract; below that, as a temporary employer, you pay the contributions to a pension company without one.
Set up payroll. Each payslip shows the gross pay, the withholdings and the net pay.

From the first payday

Incomes Register: every pay run within five days of payday, and the employer's separate report by the 5th of the following month.
Payments: the withheld tax and the employer's health insurance contribution by the 12th of the following month. Your pension company and the Employment Fund invoice you from the same data.
Employer register: with one employee you are usually a casual employer. Registration becomes compulsory when you regularly pay wages to two or more employees, or to six or more at the same time.
Records: keep a record of the working hours and of annual holidays, and keep each payslip.

Hiring your first employee: frequently asked questions

What insurance do I need when I hire my first employee in Finland?

You take out two policies yourself: statutory accident insurance and TyEL pension insurance. On top of that you pay the unemployment insurance contribution, which is not a policy you buy, and in most sectors the collective agreement requires group life insurance. Occupational health care is compulsory too, but it is a service, not insurance.

What	When it is compulsory	Who with
Accident insurance	wages over 1 500 € a year, before work starts	a non-life insurer
TyEL insurance	pay of at least 71.72 € a month (2026)	a pension company
Unemployment insurance contribution	ages 18–64, wages over 1 500 € a year; the employee's share is always withheld from pay	invoiced by the Employment Fund
Group life insurance	when the collective agreement requires it	the accident insurer

Accident insurance (työtapaturma- ja ammattitautivakuutus) is compulsory once the wages you pay, or have agreed to pay, in a calendar year exceed 1 500 euros. Because agreed wages count, a first hire is usually over the limit before the first working day. The policy must be in force before the work begins and cannot be taken out afterwards; see before the first working day.

TyEL insurance covers an employee from the month after they turn 17, once their pay is at least 71.72 euros a month in 2026. You need a contract with a pension company when the employment is continuing or wages exceed 10 272 euros over six months; below that you pay as a temporary employer without one. See before the first payday and our article on the TyEL contribution.

The unemployment insurance contribution is not something you buy. The Employment Fund (Työllisyysrahasto) invoices it four times a year from the wages you report to the Incomes Register, once the year's wages exceed 1 500 euros. You pay both your share and the employee's share, which you withhold from the pay; see from the first payday.

Group life insurance (ryhmähenkivakuutus) is based on an agreement between the labour market organisations. It is compulsory when a collective agreement that binds you, or your sector's generally binding collective agreement, has a provision on it. It is handled by the insurer that holds your accident insurance, and it pays a lump sum to the employee's spouse and children under 22 if the employee dies.

Occupational health care is compulsory from the first employee. You make a written agreement with a provider and a written action plan, and Kela reimburses part of the cost. What each insurance costs as a percentage of pay is in our article on the costs of a first employee.

If the employee is you

A working owner of an Oy with more than 30 % of it alone, or more than 50 % with family, is insured under YEL, not TyEL. The other steps above still apply to the people you hire. See our article on YEL in 2026.

Running the payroll and these reports is part of what we do for small employers. If you want an accounting company in Finland to take the first payslip off your desk, payroll is 15 euros per payslip on our price list.

Sources

Please note: this is general information about Finnish rules, not advice for your own situation, and the rules change. Ask us before you act on it.

Payroll from the first hire

Payslips, the Incomes Register report within five days and the amounts to pay by the 12th worked out, for 15 € a payslip plus VAT. See payroll services.

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