A cooperative can pay remuneration for work:
- 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);
- 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;
- 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;
- 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: https://www.vero.fi/syventavat-vero-ohjeet/ohje-hakusivu/48037/palkka-ja-ty%C3%B6korvaus-verotuksessa/
Here is an example of payroll calculations (the percentages are from 2020)
| Salary | 100.00 |
| Paid annual leave 9 % | 9.00 |
| Taxable revenue | 109.00 |
| tax retention 20 % | -21.80 |
| Pension scheme retention TYEL | -7.15 |
| unemployment insurance contribution retention 1.25 % | -1.36 |
| To be paid | 78.05 |
Non-wage labor costs paid by the employer according to the total revenue
| Gross salary | 109.00 |
| 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 costs | 131.88 |
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 www.stm.fi
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.