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What are the indirect expenses of an employee’s salary?

In Finland, the side costs of an employee’s salary consist of the employer’s statutory insurance contributions, such as occupational pension insurance, unemployment insurance, accident insurance, and health insurance. In addition, depending on the collective agreement, the indirect expenses may include instalments that affect the amount of indirect expenses. Such instalments include group life insurance contributions and holiday compensation. These instalments must be taken into consideration when calculating the employee's side costs.

Is there a fixed multiplier for estimating the side costs of an employee's salary in Finland?

The amount of compulsory expenses paid by an employer for an employee depends on the age of an employee and the total amount of wages paid to all employees in the company during the year. The average rate of statutory side costs in 2021 is around 19.74 %. This alone is not adequate to estimate the actual amount of side costs as the non-statutory expenses, such as holiday compensation, are added on top of the multiplier.

The basic multipliers used to estimate the employer's indirect expenses vary between 1.3 and 1.5, depending on the situation. A factor of 1.3 covers side costs and holiday compensation. A factor of 1.5 is a safety factor that covers more special fringe benefits, such as sickness insurance. The multipliers do not take job-specific work equipment or protective equipment into account. If the employee's indirect expenses are to include costs specific to the job, the multiplier should be increased.


  • Employer's indirect expenses average 19.74 % of the salary
  • The employer's health insurance contribution is 1.53 % of the salary
  • The Employees Pensions Act (TyEL) contribution averages 16.95 % of the salary
  • The employer's unemployment insurance contribution is 0.5 % of salary if the total amount of wages paid by the company does not exceed 2 169 000 € per year. For the excess, the contribution is 1.9 % of the salary.
  • The accident insurance contribution averages 0.7 % of the salary
  • Group life insurance contribution averages 0.06 % of the salary (compulsory if required by collective agreement)
Työntekijän palkan sivukulut kerroin Yrittäjän taloustärppi indirect expenses of an employee’s salary
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