How do I report unpaid wages, accrued holiday pay, bonuses and fees in the financial statements?

In the financial statements, you must report salaries and other personnel expenses that arose before the end of the financial year but have not yet been paid. Report the information as part of your financial statement materials, broken down by employee and expense type.
 

How to report unpaid salaries

1. Determine the end date of the financial year.
2. Check whether an employee performed work or became entitled to salaries before the end of the financial year.
3. Separate the salaries that will be paid only after the financial year has ended.
4. For each unpaid wage liability, report at least:
   • the employee’s name
   • the type of payment, such as monthly salary, hourly salary, a bonus or a fee
   • the period for which the payment has accrued
   • the unpaid gross amount
   • the estimated payment date
   • any employer contributions, itemised separately if they are included in the calculation.
5. Submit the breakdown with the financial statement materials requested by UKKO.fi.
    

Example of unpaid wages

An employee’s December salary is EUR 3,000. The salary will be paid in January, after the end of the financial year.

Report the following in the financial statements:

• unpaid salary: EUR 3,000
• employer contributions itemised separately (for example health insurance contribution, Employees’ Pensions Act (TyEL) contribution, unemployment insurance contribution and trade union membership fee)
• pay period: December
• payment date: January
• employee: the employee’s name

The salary belongs to the financial year during which the work was performed, even if the salary is paid during the following financial year.
 

How to calculate accrued holiday pay liability

Accrued holiday pay liability refers to the value of holidays that an employee has accrued but has not yet taken. Report the accrued holiday pay liability based on the situation on the balance sheet date.

The calculation method depends on the employee’s pay structure and on whether the 14-day or 35-hour rule applies to the employee.
 

Monthly-paid employee

For a monthly-paid employee, the accrued holiday pay liability is generally calculated as follows:

Accrued holiday pay liability = remaining holiday days × daily salary

In a six-day holiday accrual system, the daily salary can be calculated by dividing the monthly wage by 25:

Daily salary = monthly salary ÷ 25

In a five-day system, use the applicable divisor for that calculation method.

Example

• monthly salary: EUR 3,000
• remaining holiday days: 10
• daily salary: EUR 3,000 ÷ 25 = EUR 120
• accrued holiday pay liability: 10 × EUR 120 = EUR 1,200
   

Hourly-paid employee – 35-hour rule

If the 35-hour rule applies to the employee, the accrued holiday pay liability is calculated as a percentage:

Accrued holiday pay liability = holiday pay percentage × cumulative salaries for the holiday credit year − holiday pay already paid during the same holiday credit year

The holiday pay percentage is usually:

• 9% if the employment relationship has lasted less than one year
• 11.5% if the employment relationship has lasted at least one year

Always check whether the employee’s collective agreement affects the calculation.
 

Hourly-paid employee – 14-day rule

If the 14-day rule applies to the employee, holiday pay is calculated based on the average daily salary and the coefficient specified in the Annual Holidays Act:

Accrued holiday pay liability = average daily salary × coefficient corresponding to the remaining holiday days

The average daily salary takes into account the salaries paid during the holiday credit year, the number of days worked and, where applicable, overtime hours.
 

How to report bonuses and fees

Report a bonus or fee in the financial statements if it is payable to an employee or another recipient based on work performed, a target achieved or another basis relating to the financial year, but it has not yet been paid.

For each bonus or fee, report:

• the recipient’s name
• the basis for the bonus or fee
• the financial year or period to which it relates
• the calculated or estimated gross amount
• the date of the decision or the basis on which the payment arises
• the planned payment date
• any employer contributions, itemised separately.
   

Example of a bonus

An employee will be paid a EUR 1,200 bonus in March 2027 based on the company’s 2026 result. The bonus is based on a target achieved during the 2026 financial year.

If the bonus is payable to the employee and its amount can be determined or estimated reliably, report it as a personnel expense in the 2026 financial statements, even though it will be paid in March 2027.
 

Please also note

• Report salaries and fees for the financial year to which the work or other performance relates—not solely according to the payment date.
• Report accrued holiday pay liability by employee, or at least in a format that allows the amounts to be verified by employee.
• Keep unpaid salaries, accrued holiday pay, bonuses and fees separate from one another.
• Report employer contributions separately from salaries if they are not included in the unpaid salary amount.
• If an employee’s employment relationship ended before the balance sheet date, also take into account holiday compensation for unused holidays.
• Holiday bonus is not the same as accrued holiday pay liability. Its treatment may be based on a collective agreement, an employment contract or the company’s established practice.
• If the payment is a board fee, report it separately. The insurance and tax treatment of a board fee may differ from that of employee wages.
   

Frequently asked questions

Should I report unpaid salaries as a gross or net amount?

Report unpaid salaries primarily as a gross amount. Itemise any employer contributions separately.

Should I report salaries that have already been paid?

No. The financial statements should include only salaries belonging to the financial year that were still unpaid on the balance sheet date.

Should I report a bonus if its amount is not yet certain?

Report the bonus if it relates to the financial year and its amount can be estimated reliably. If the basis or amount of the bonus is unclear, explain the situation separately when submitting the financial statement materials.

Should employer contributions be added to the accrued holiday pay liability?

Employer contributions must be taken into account as a separate liability and expense. Report the accrued holiday pay and the related employer contributions separately.

How do I report a board fee?

Report a board fee separately and state who it is payable to, on what basis it has accrued and when it will be paid. The treatment of a board fee may differ from that of employee salaries.