Can a Sole Trader Hire an Employee in Finland? Your First Hire Explained

Yes. A sole trader in Finland, known as a toiminimi, can hire employees. You do not need to set up a limited company (Oy) just to take on your first member of staff.

Perhaps you are turning down work, spending evenings on tasks someone else could handle, or preparing for a busy season. Hiring can give your business room to grow. Before you agree a start date, though, you need a budget and a practical plan for being an employer.

One distinction matters from the outset: the money you take out of your own toiminimi is a private withdrawal. An employee receives wages, which must be reported to Finland’s Incomes Register, Tulorekisteri. Incomes Register: earnings payment data.

Want help getting the finances ready? tulos.ai offers an accounting service tailored to sole traders. We agree the bookkeeping work, required filings and arrangements for employee payroll before you start. You provide the agreed information; your accountant handles the work covered by the service. Ask about accounting support for your toiminimi.

Start with the full cost of the hire

A salary offer is only one part of the budget. You also need to allow for employer contributions, time away from work and the practical costs of bringing someone into the business.

The actual cost depends on the role, pay, insurance requirements and applicable collective agreement. Build the calculation around your own circumstances rather than assuming a single percentage covers everything. Suomi.fi: calculating employment costs, in Finnish.

A simple planning example: suppose you budget €3,200 a month for the employee’s total cost. If each additional billable hour leaves €40 after other direct costs, but before this staffing cost, you need 80 billable hours to cover that budget: €3,200 ÷ €40 = 80. Your other fixed costs and target profit still need covering. The €3,200 is an illustrative assumption, not an estimate of the employer charges on a particular salary.

Check the employment terms before making an offer

Find out whether a collective agreement, usually called a TES in Finland, applies to the work. It can determine minimum pay, supplements, working hours and pay during absence.

A written employment contract makes the arrangement easier to manage. Record the duties, start date, workplace, hours, pay, pay period and applicable collective agreement. Agree the duration of employment and any probationary period, checking the conditions that apply to each. Suomi.fi: employment agreements, in Finnish.

Before payroll is set up, collect the employee’s basic details, tax-card information and bank account. Decide how hours and absences will be recorded, who approves them and when payroll needs the information.

Arrange insurance and occupational healthcare

Check the requirements for employee pension insurance (TyEL), occupational accident and disease insurance, and unemployment and health insurance contributions. Group life insurance may also be required under the applicable collective agreement. Age and earnings can affect which obligations apply. Finnish Tax Administration: social insurance contributions, in Finnish.

Even one employee needs employer-arranged preventive occupational healthcare. Additional medical treatment is voluntary. Agree the services and necessary documentation with an occupational healthcare provider before the employee starts. Kela: occupational healthcare.

Do you need to join the Employer Register?

With only one permanent employee, a business generally counts as a casual employer for Finnish tax purposes and does not have to join the Employer Register. You must still report wages.

Registration is required for a regular employer: for example, a business paying wages regularly to at least two employees, to one permanent employee plus temporary staff, or to at least six temporary employees at the same time. Finnish Tax Administration: Employer Register.

The tax authority’s casual-employer classification is separate from the pension insurer’s temporary-employer rules. Check the pension arrangement independently. Incomes Register: employer classifications and separate reports, in Finnish.

Give every payday a clear process

Agree who supplies the inputs, calculates and checks pay, submits reports and pays the net salary through the bank. The employee must receive a payslip when wages are paid. Employment Contracts Act, Chapter 2, section 16, in Finnish.

For ordinary cash wages, the earnings payment report is generally due within five calendar days after payday. If the deadline falls on a weekend or public holiday, it moves to the next working day. Incomes Register: reporting deadlines, in Finnish.

The employer’s separate report is generally due by the fifth day of the following month. Registered employers also report months with no wages; an unregistered casual employer’s reporting depends on the payments made. Incomes Register: employer’s separate report, in Finnish.

Keep payslips, payments and insurance invoices connected in the bookkeeping. Wages and employer costs need the appropriate treatment in the business tax return. For the wider monthly routine, see our guide to sole trader bookkeeping in Finland.

Paying yourself or a family member is different

A toiminimi owner cannot be their own employee. Money taken for personal use is a private withdrawal, not salary.

Wages paid to your spouse, as defined for tax purposes, or to your child who turns no more than 14 during the tax year are not deductible business expenses. Where spouses work in the business together, business income can instead be divided between them on the tax return. Check the arrangement before putting a family member on payroll. Finnish Tax Administration: deductions for self-employed individuals.

Rules on employing young people must also be checked separately. The tax treatment does not establish what work a child may do or which hours are permitted. Suomi.fi: agreements with young employees, in Finnish.

Accounting support that grows with your toiminimi

Your first employee creates a new monthly routine. With tulos.ai’s accounting service, a professional handles the agreed bookkeeping while you follow the figures and documents in the same workspace.

We start by reviewing your business, existing records and the help you need. We then agree the scope, responsibilities and price. If you need employee payroll and related filings, we include those requirements when preparing your service proposal.

• You provide the inputs: receipts, invoices and the agreed pay and working-time information.
• Your accountant handles the agreed work: reviewing records, making entries and completing the filings covered by your contract.
• You keep visibility: view reports and work from the same material as your accountant in tulos.ai.
• Software use is included in the accounting service: usage-based third-party charges are handled separately.

Tell us how many employees you plan to hire, whether they will receive hourly or monthly pay, and which collective agreement applies. We will use that information to define the bookkeeping and payroll support your business needs.

Request a quote for sole trader accounting and payroll. You can also explore our financial management solutions for sole traders.

First-employee checklist

• Define the role, required hours and purpose of the hire.
• Budget the full cost and the additional sales needed to cover it.
• Check the collective agreement and put the employment terms in writing.
• Establish whether Employer Register registration is required.
• Arrange the applicable insurance and preventive occupational healthcare.
• Collect employee details, tax-card information and bank details.
• Set a deadline for approved hours, absences and other payroll inputs.
• Assign responsibility for payroll calculations, reports and bank payments.
• Arrange reporting authorisations and a system for tracking deadlines.
• Agree the accountant’s responsibilities, handling of payroll records and price.

Common questions about hiring through a toiminimi

Must I change to an Oy when I hire someone?

No. Hiring an employee alone does not require a change of business form. Review that decision separately if the scale of your business or your other needs change.

Can my first employee work part-time?

Yes. Set out the hours and other terms in the contract, check the applicable part-time employment conditions and fulfil the employer obligations relevant to the arrangement. Suomi.fi: employment agreements, in Finnish.

Can I arrange payroll through your accounting service?

Yes. Mention payroll when requesting your quote so we can agree the work, required information, timetable and price. Employee payroll should be expressly included in the agreed scope of service.

Get your bookkeeping ready for the first hire

Tell us what your business does, how you currently handle the accounts and how many people you expect to employ. We can then agree an accounting service and the payroll support that fit your working month.

Contact tulos.ai for a tailored toiminimi accounting quote.

Sources checked on 21 October 2026. This guide covers ordinary employee hiring by a sole trader operating in Finland. Check the terms applicable to the individual employment relationship separately.