Starting a Cooperative in Finland

Payroll system


A cooperative can pay remuneration for work:

  1. as a salary, if the employee has an employment relationship. The cooperative takes care of the statutory non-wage labor costs (pension schemes, other statutory insurance fees and health insurance contributions paid to the tax authority);
  2. as a salary, if the employee works as an entrepreneur in the cooperative (less than 3 members).  The employee must have an entrepreneur pension scheme. The accident insurance is voluntary, but the health insurance contribution is paid to the tax authority;
  3. as a remuneration for work, if the employee has no employment relationship with the cooperative. The employee takes care of all statutory insurances’ fees and contributions;
  4. by invoice, in which case the employee invoices through an entity files in the tax prepayment register. This entity can be a cooperative, a limited company, a sole trader, an invoicing service or an association.

Characteristics of an employment relationship and an agency relationship have been discussed in the tax guidance:

Here is an example of payroll calculations (the percentages are from 2020)

Paid annual leave 9 %9.00
Taxable revenue109.00
tax retention 20 %-21.80
Pension scheme retention TYEL-7.15
unemployment insurance contribution retention 1.25 %-1.36
To be paid78.05

Non-wage labor costs paid by the employer according to the total revenue

Gross salary109.00
Employer’s pension scheme contribution TYEL 18.15 %19.78
Health insurance contribution 1.34 %1.46
Statutory insurance fees ca. 1.5 %1.64
Total salary+other costs131.88

The Finnish Parliament lays down yearly the social insurance contributions i.e. statutory non-labor wage costs. Updated information is available at the pension insurers’ sites or at

In consequence, the cooperative has to sell work at the minimum price of €131.88 (plus the VAT to be added), in order to be pay a net salary of €78.21 for the employee.