First employee? This is how payroll starts in practice 

Hiring your first employee is a significant moment for many entrepreneurs. It signifies that the company has moved forward and growth has begun to take shape. At the same time, it brings new responsibilities, one of the most central of which is payroll. Many entrepreneurs find themselves wondering at this stage what needs to be taken into account and where to actually begin. 

Before the first salary payment 

Before the first salary is paid, it is important to ensure that the basics are in order. The employment relationship begins with a clear agreement, and a written employment contract provides security for both parties. In addition, the employee needs a tax card so that withholding tax can be handled correctly. The company must also clarify its position as an employer and take care of the necessary insurance. One often forgotten matter is accident insurance, which is mandatory from the very first employee onwards. Although these matters may seem bureaucratic at first, they form the foundation for smooth salary payments. 

Mitä palkanlaskenta oikeasti tarkoittaa? 

Payroll is not merely a transfer of money to an employee's account; it involves several stages and obligations. The agreed salary is just the starting point from which necessary deductions are made, such as income tax (ennakonpidätys) and the employee's pension contribution. At the same time, the employer incurs their own associated costs, which are not directly visible in the amount paid into the employee's account. These include, among others, the employer's pension contribution, unemployment insurance premium, and accident insurance premium. In total, these associated costs typically increase the actual cost of a salary by about 20–30 percent higher than the agreed gross salary, which often surprises an entrepreneur hiring their first employee. 

Payslip and notifications 

A payslip must be provided to the employee for every payment of wages, clearly showing how the wage has been calculated. This is not merely a formality, but an important part of a transparent and trustworthy employment relationship. Following wage payment, obligations continue in the form of notifications and payments. Wage information must be reported to the income register within five days of payment, and employer contributions must be settled on time. Furthermore, all information must be correctly recorded in the accounting. At this stage, many entrepreneurs realise that payroll is a process, not a single event. 

The most common challenges at the beginning 

When it comes to a new employee, mistakes are common, and it's not surprising. Notifications may be delayed, payroll calculations may be incomplete, or the employee's total cost may be underestimated. These situations are human errors, but they can cause unnecessary stress and extra work later on if things have to be corrected retrospectively. 

When is it advisable to ask for help? 

Payroll is a sub-area where accuracy is particularly important. That's why many entrepreneurs decide to outsource it early on. When you start to have more employees or your own time is no longer sufficient to handle all obligations, external help brings certainty and frees up time for other activities. At the same time, you can be confident that everything will be handled on time and correctly. 

The first employee is a sign that the company is heading in the right direction. When the basics of payroll are in order from the start, you can avoid many problems and focus on what's most important, which is growing your own business. 

If payroll raises questions or you want to ensure everything is handled correctly from the start, it's advisable to seek help promptly. Konkretia Kirjanpito Oy will gladly assist you clearly and practically.