Payroll processing for employees – how do I add an expense to the UKKO service? – UKKO Sole Trader

Have you hired employees for your company and is payday approaching?

In this article, we provide more information about payroll processing for employees and reporting wage information.

In the UKKO Yrittäjä limited company service, the entrepreneur must handle payroll processing for employees and the necessary reports to the Finnish Tax Administration themselves, for example through the Palkka.fi service.

In our service, you can currently only calculate and report the owner-entrepreneur’s own salary and tax-exempt travel expense reimbursements.

Does my company need to register in the Employer Register of the Finnish Tax Administration?

A company operating as a regular employer must always register in the Employer Register.

A company is considered a regular employer in the following situations:

The company regularly pays wages to two or more employees.
The company regularly pays wages to one employee and, in addition, to one or more employees whose employment relationship is temporary or intended to be short-term.
The company pays wages to at least six employees at the same time, even if their employment relationships are temporary and intended to be short-term.

An employer that pays wages occasionally does not need to register in the Employer Register.

A company is considered an occasional employer if either of the following conditions is met:

The company has only one permanent employee.
The company has one to five employees whose employment relationship does not last for the entire calendar year.

Please read our article, which explains in more detail when registration in the Employer Register is required and when it is not mandatory. If necessary, you can contact the Finnish Tax Administration for more detailed instructions and further information.

If your company is registered in the Employer Register of the Finnish Tax Administration, the employer’s separate report must be submitted for every tax period, even if no wages were paid to employees during that period. This is known as a “no wages paid” report. Submitting this separate report is not included in the UKKO service.

If you have calculated employees’ wages through the Palkka.fi service during the tax period, you do not need to submit a separate employer’s report for the wages, as the information is transferred directly from the Palkka.fi service to the Incomes Register.

How do I calculate my employee’s salary?

Option 1: Start using the Palkka.fi service

The easiest way to calculate and report an employee’s salary is to use the Finnish Tax Administration’s free Palkka.fi service.

When you process payroll through the Palkka.fi service, you can choose to have the service automatically submit your reports to the Incomes Register. In this case, you do not need to separately report the wage information to the Incomes Register or submit the employer’s separate report.

Please note that if you calculate your own salary as an entrepreneur in the UKKO service, you must ensure that the information reported to the Incomes Register includes both your own salary and the employees’ salaries.

In practice, this means that you must always correct the Incomes Register report so that it includes all of your wage information. The Incomes Register only accepts one report, meaning that if two reports are submitted, the information in the first report will be replaced by the new report.

If you also calculate your own salary as an entrepreneur directly through the Palkka.fi service, the information will be updated correctly in the Incomes Register and no further action is required from you.

Option 2: Report the information to the Incomes Register yourself

If you do not use Palkka.fi, you must submit two types of reports to the Incomes Register. Do not submit an annual report for information that you have already reported to the Incomes Register.

Submit an earnings payment report

Report the wage information to the Incomes Register using an earnings payment report for each income recipient separately. Submit the information within five days of the payment date. The payment date is the day on which the payment is available to the recipient, meaning the payday. If the deadline falls on a Saturday, Sunday or another public holiday, you may submit the information on the following weekday.

Submit the employer’s separate report

Submit the employer’s separate report on the employer’s health insurance contributions to the Incomes Register once a month. The deadline is the fifth day of the calendar month following the month in which the wages were paid. If the deadline falls on a Saturday, Sunday or another public holiday, you may submit the information on the following weekday.

Adding an employee’s salary payment to the UKKO service

Once you have paid the employee their salary, withholding tax and other additional costs deducted from the gross salary, create a new expense in your UKKO customer account:

Attach a detailed payroll report to the expense. The report must show the gross salary and all deductions made from it. It must also specify any tax-exempt kilometre and daily allowances paid to the employee, as well as any other tax-exempt or taxable benefits.
Enter the employee’s name as the supplier and select “This is a private individual”.
Select “Salaries and travel expense reimbursements” as the transaction type and choose the appropriate specification. If you are reporting both salary and tax-exempt reimbursements, always enter them as separate lines so that you can select the correct specification for each amount.
Enter the net salary amount as the expense amount and select 0% as the VAT rate.
Match the net salary paid to the employee with the corresponding bank transaction and mark the expense as paid.

Create a separate expense in your customer account for the additional payroll costs, including the withholding tax and other payments made to the Finnish Tax Administration:

Attach either the same payroll report or the payment breakdown available in your company’s MyTax service. The payment breakdown will be available in the “Payments made and refunds” list once the payment has been made and the Finnish Tax Administration has allocated it to the correct tax types.
Enter the Finnish Tax Administration’s details as the supplier.
Select “Taxes” as the transaction type and “Taxes for other tax periods” as the specification.
Enter the amount paid to the Finnish Tax Administration as the expense amount and select 0% as the VAT rate.
Match the amount paid to the Finnish Tax Administration with the corresponding bank transaction and mark the expense as paid.

The additional payroll costs must be paid to the Finnish Tax Administration by the 12th day of the month following the month in which the wages were paid.

If your company pays TyEL contributions as a contractual employer, you will receive separate invoices from the pension insurance company. Always record these as separate expenses in your customer account.

When does a limited company need TyEL insurance for its employees?

If your company has no permanent employees and pays less than 10 272 € in wages over a six-month period, you can operate as a temporary employer. (This threshold applies to the year 2026.)

In this case, you are not required to enter into a TyEL insurance agreement with any pension insurance company. However, you must report the wages to the Incomes Register and pay the TyEL insurance contributions as usual.

A TyEL insurance agreement must always be entered into if your company has at least one employee in a continuous employment relationship or if the wages paid to your employees exceed 10 272 € during a six-month period (in 2026).

You are a contractual employer when you have entered into an insurance agreement with a pension insurance company.

You can find more detailed information about TyEL insurance on Varma’s website. If necessary, you can also contact Varma for further information or to become a contractual employer.

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