As an employer there are few different payments you need to make with the gross pay. Employer has obligations to make certain contributions, which include withholding tax according to employee's tax card, insurance payments and pension payments.
When you pay salary to your employee using Palkkaus.fi the counter counts in automatically pension payments, social security payment, tax and unemployment insurance payment. Palkkaus.fi settles pension, social security and tax payment to the right authorities on behalf of the customer. Työllisyysrahasto will send an invoice by quarter of the unemployment insurance.
The employee will also pay their part of the side costs. They pay a part of the pension, social security payment and the unemployment insurance.
Below is a metric of how side costs form and how much they are in 2020.
|Side cost||For who?||Exceptions|
|TyEL-insurance (employees pension insurance)||17–67-year old employees. Employers payment is 15,55% of the gross pay.||Not mandatory if employees incomes from the same employer are less than 60,57€ per month.|
|Accident and life insurance||For every employee. Price varies depending on the risks at work. Typically around 1-2%.||Not mandatory if the employer pays salaries maximum on 1300€ per year.|
|Employees unemployment insurance (TVR)||17–64-year old employees. Employers payment is 0,45% and employees payment is 1,25% of the gross pay.||Not mandatory if the employer pays salaries maximum on 1300€ per year.|
|Employers social security payment (sava)||16-67-year old employees. Employers payment is 1,34% of the gross pay.||No exceptions.|
|Increases from the collective agreement||Only if the agreement obligates. These are not included in the example in this article. Increases are such as the bonus holiday pay.||When the industry has a binding agreement evey employer has to follow it. Not all industries have their own agreement.|
|Withholding tax (employer does not pay for the cost but takes care of the settlement)||Tax will be withheld from the employees gross pay according to employees tax card.||If a household pays salaries less than 1500€ a year tax is not mandatory to withhold from employee.|
All settlements have been collected to the chart below since employees age has an effect on the side costs.
|17 – 52||X||X||TT: 7,15%||X|
|53 – 62||X||X||TT: 8,65%||X|
|63 – 64||X||X||TT: 7,15%||X|
|65 – 67||X||-||TT: 7,15%||X|
Please notice that the payment obligatory has also salary limits. The employer part of TyEL has been different on some years for temporary and contract employers.
Here is an example of employers side costs in 1000€ gross pay:
|Monthly gross pay||1000 €|
|TyEL-payment: employers payment 15,55 %||+155,50 €|
|Social security payment: 1,34 % from gross pay||+13,40€|
|Unemployment insurance: employers payment 0,45 %||+4,50€|
|Total cost for the employer||1173,40 €|