When do you need to register as an employer?
You must register your association in the Employer Register if either of these applies:
- You pay wages or salaries regularly (for example, every month), or
- You employ more than one person at the same time, even if only for a short period.
It’s best not to register “just in case” and wait until your wage/salary payments move from occasional (e.g. one-off fees) to regular payroll. If you’re unsure whether your association is considered as an occasional or regular payer, check the Finnish Tax Administration’s classification: 🔗Vero – Employer Register
Table of contents
Before you start – What do you need to know?
Who is the employer in an association?
When an association decides to hire a paid employee, the board of the association becomes the legal employer, even if day-to-day management is delegated to a project manager or external service.
Before hiring, the board must make a formal decision, ensure funds are available, and confirm that the employment fits the association’s purpose and strategy.
🔗The Association Act states that the board is responsible for:
- Ensuring compliance with labour laws and collective agreements*
- Arranging taxes, insurances, and payroll reporting
- Providing a safe and lawful working environment
- Approving and overseeing employment contracts and conditions
The board must act collectively in these matters. Legal responsibility cannot be delegated, even if tasks are handled by someone else.
*What are the key laws to know?
The main laws regulating the employer-employee relationship are:
🔗Employment Contracts Act
🔗Working Time Act
🔗Annual Holidays ActOther laws regulating employment rights and obligations include, for instance, the Non-discrimination Act, the Act on the Protection of Privacy in Working Life, the Occupational Safety and Health Act and the Occupational Health Care Act.
You do not need to know all these rules heart but it’s important to understand your responsibilities and know where to find reliable information. All employment legislation can be found on 🔗finlex.fi.
Want to read more on the board’s responsibilities?
🔗MLL – Association as Employer: Board’s Role (PDF, in Finnish)
🔗Suomi.fi - Employer’s Responsibilities and Obligations
🔗Yrittäjät - Hiring Your First Employee (PDF)
Which public actors are involved when becoming an employer?
Before going further, it’s good to know which public actors your association will need to work with. You will be in contact with them at different steps of the employment process, as each of them is responsible for different parts of employment (e.g. taxes, insurance, workplace safety, or employee rights).
Suomi.fi: Finland’s central e-service portal, that gives access to employer information and tools from public actors like Vero, Kela, and TyEL providers.
Vero: Finnish Tax Administration, responsible for employer registration, collecting income taxes, and handling employer contributions.
Income Register: National database for reporting all paid wages and compensations in real time.
Finnish Centre for Pensions (ETK): Public authority that supervises how pension laws (like the Employees Pensions Act, i.e. TyEL) are followed and provides guidance to employers and pension providers.
Employment Fund: collects unemployment insurance contributions from both employer and employee and manages benefits such as adult education allowance.
Kela: Provides social benefits such as sickness allowances and family leave compensation. It also reimburses employers for costs related to occupational health services.
Occupational Safety and Health Administration (Työsuojelu): Oversees safe and healthy working conditions, enforces labour laws, and operates through 🔗Regional State Administrative Agencies (AVI) .
Finnish Workers' Compensation Center (TVK): coordinates Finland’s statutory accident insurance system and provides information on work-related accidents and insurance providers.
*What is a collective agreement?
A collective agreement, or TES, set minimum conditions of employment, for example in terms of pay, working hours and holidays. It applies if:
- the employer is a member of an employer association that signed the agreement, or
- the agreement is generally binding in the sector of activity.
If no collective agreement applies, employment laws define the minimum conditions.
You can find collective agreements that are generally binding on 🔗Finlex website..
Step-by-step: How does an association become an employer?
Register as an employer
You must register your association with the 🔗Employer Registerif you pay wages regularly or employ more than one person at the same time.
You can register:
When you set up your organisation
When submitting your association’s start-up notification (Y1a form) to the Business Information System (YTJ), include appendix 6212 (Association's details to the Finnish Tax Administration).
You receive your business ID (Y-tunnus) automatically when your application is processed. This ID is also your tax number with Vero.
Later, if needed
you can register by filing a notification of changes on ytj.fi, using the Y4a form and appendix 6214 for associations.
Check applicable collective agreements (TES)
In Finland, collective agreements (TES) set minimum employment terms (such as pay, working hours, and holidays) more precisely than the law. Some TES become universally binding, meaning all employers in that sector must follow them, even if they’re not members of an employer organisation.
How to check which TES applies to your association?
- Find generally binding collective agreements on 🔗Finlex webpage.
- Browse union websites (SAK, JHL, Jyty, Tehy, Erto, etc.)
- Browse employer organisations’ websites (EK, KT)
Examples of TES
🔗SOSTES – Social and health services sector (Super, Tehy, Erto, HALI)
🔗Social sector organisations (Erto and HALI, in Finnish)
Note: this TES applies to Moniheli and other similar organisations.
Arrange statutory insurances
Before your first employee starts work, you must secure the following mandatory insurances:
- Employee Pension Insurance (TyEL)
- Unemployment Insurance
- Accident Insurance (sometimes called “workplace insurance”)
In addition, you may take out group life insurance. This is optional unless your sector’s collective agreement requires it. It pays a lump sum to the employee’s beneficiaries if the employee dies while employed. It does not replace accident insurance. For most social and health NGOs, group life insurance is required by their collective agreement.
a) Employee Pension Insurance (TyEL)
If your association hires an employee aged 17–67 who earns more than 70,08€/month (2025 threshold), you are legally required to take out Employees’ Pension Insurance (TyEL) for them.
This must be done before the first salary is paid.
Why this insurance is important?
Because it secures your employee’s future pension and provides benefits such as disability and survivors’ pensions. It is required by law (🔗Employees Pensions Act, in Finnish) and applies even to part-time or fixed-term contracts.
Who supervise and manage TyEL?
- ETK ( 🔗Finnish Centre for Pensions ) ensure that employers have taken out the insurance and reports non-compliance to authorities.
- Your chosen pension insurance provider handles the contract and collects payments.
How to take out TyEL insurance?
Compare rates and services and sign a contract with one of the following providers:
Find all contact info at 🔗Työeläke.fi – Contact information.
After that, every month, you can deduct the employee’s share of TyEL from their salary and pay both employer and employee shares to the pension provider.
Check current contribution levels on 🔗ETK – Contribution Levels.
b) Unemployment Insurance
If your association has to pay more than 1500€/calendar year in total wages, you must register and pay contributions to the 🔗Employment Fund .
This mandatory contribution is called “unemployment insurance” and finances unemployment benefits.
It applies for employees aged 18-65, and both employer and employee pay for it. Check the 🔗current contribution rates.
c) Accident Insurance
d) Group Life Insurance (if required)
If your sector’s collective agreement (TES) mandates it, you have to take Group life insurance alongside your accident insurance.
The insurance is valid during work and leisure time. It pays a lump sum to the employee’s beneficiaries if the employee dies while employed.
Want to know more?
🔗 About the Employees' Group Life Assurance (TVK)Set up occupational health care
An employer is required by law to provide preventive occupational health care even if there is only one employee. Every employee is entitled to occupational health care, regardless of the nature and duration of the employment relationship.
The aim of occupational health care is to support an employee’s work capacity throughout their working career. It also to promote a safe and healthy workplace environment.
How to arrange occupational health care?
- Sign a contract with an occupational health care provider (e.g. Terveystalo or a municipal health service).
- You can apply for partial reimbursement of costs from Kela (the Social Insurance Institution of Finland). The reimbursement covers part of the occupational health care expenses. See 🔗Kela - What is reimbursable occupational health care? (in Finnish)
Set up payroll & report wages to the Incomes Register
When you start paying your first employee, you must organise payroll correctly and report wages the 🔗 Incomes Register. This means calculating salary, withholding taxes and social contributions, paying the net salary, and reporting on time.
What do you need to do?
- Get a valid tax card (verokortti) from your employee. This card tells you how much tax to withhold from the employee’s salary. If no tax card or prepayment register entry is given, their withholding tax rate is 60% (🔗Suomi.fi).
- Calculate and withhold taxes and social contributions like pension and unemployment insurance. You can use tools like 🔗Palkka.fi – Payroll calculator (in Finnish).
- Pay the employee’s net salary to their bank account on time.
- Report all wages, fees, allowances, and volunteer allowances (up to 20 days/year), even it’s tax-free, to the Incomes Register within 5 days of payment. See 🔗Kela - How to report wages and employer’s contribution.
Correct payroll management ensures you follow the law and avoid penalties. Timely reporting keeps your employee’s social security, pension, and tax records accurate.
How to manage payroll?
You can set up a system to manage salaries, taxes, and statutory deductions, or use online payroll tools designed for employers, like:
🔗 Palkka.fi: Free payroll service from the Tax Administration (in Finnish)
🔗 Palkkaus.fi: Payroll calculation and reporting tools, in Finnish and English. Check 🔗pricing.
Ensure workplace safety & health compliance
As the employer, your association is always responsible for:
- Ensuring that the workplace is safe and healthy.
- Identifying and managing risks, even if you employ only one person.
- Consulting with employees about safety and health matters.
- Cooperating with any elected occupational safety representative, if there is one:
A representative must be elected if your association has at least 10 employees. Employees choose someone among themselves, and the representative will cooperate with you to improve working conditions, safety, and health.
If you have fewer than 10 employees, there is no legal obligation to elect a representative, but employees can still choose someone informally, and you must cooperate with them.
You cannot transfer these responsibilities to the employee or representative. Even in a small association, if an employee raises a safety concern, you must listen, assess the risk, and take appropriate action.
Remember: Employers must also arrange occupational health care. See the earlier section in this guide for details.
Where to get support?
- Occupational Safety and Health Administration (Työsuojelu) is the authority in Finland that enforces occupational safety laws, inspects workplaces, and can help guide you on legal requirements and best practices. See 🔗Työsuojelu – Safety and health in the workplace
- The Centre for Occupational Safety (TTK) is a national non-profit that provides practical tools, training, and materials to support employers and employees. Read 🔗TTK – Occupational safety: Employers' general obligations.
- Your union or unemployment fund : Some unions offer members access to online platforms such as EduHouse, which include trainings on occupational safety and health topics.
Keep records & fulfil ongoing reporting duties
From the start, make sure you have a system for storing key employment records (contract, job description, payslips, working time logs). These must be kept safely for legal and financial reasons.
Ongoing employer duties:
- Report salaries to the Incomes Register on time.
- Pay all employer contributions (taxes, insurances) to the correct authorities.
- Monitor your budget regularly to ensure employment remain affordable for your association.
Why is it important?
Keeping accurate records and meeting reporting deadlines is required by law, helps avoid penalties, and ensures transparency for your members, funders, and authorities. Regular financial checks protect your association from unexpected costs.
Pro-tip: Use a simple checklist or calendar to track reporting and payment deadlines.
More information
Below is a handy checklist summarizing all the key steps covered in this guide.
Use it to quickly verify you’ve completed each requirement before hiring your first employee.
You’ll also find resources to deepen your knowledge about being an employer.
Hiring Your First Employee: A Guide for New Employers (Valjas)
This article explains how to calculate the full costs of hiring, manage taxes and insurance, and choose the right payroll tools. It also offers tips for smooth onboarding and ongoing employment management.
Hiring Employees (Suomen Yrittäjät)
A more in-depth guide to hiring employees in Finland. Includes detailed instructions on registering as an employer, employment contracts, legal obligations, and practical matters for associations and businesses.
Palkkaus ABC (Palkkaus.fi, in Finnish)
A beginner-friendly guide to payroll in Finland. Explains the basics of paying salaries, reporting to the Incomes Register, and handling employer contributions like TyEL and accident insurance. Includes practical tips, example calculations, and step-by-step instructions for managing payroll with or without digital tools.
