Payroll at the Turn of the Year 2026
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Turn of the year 2026
Thank you for this year. In this info letter we have collected some payroll changes for year 2026.
In-Kind benefits 2026
Tax Administration’s decision for benefits 2026 can be found here.
With regard to car benefits, the temporary 85 euros reduction for low-emission cars will end at the end of 2025, while the temporary 170 euros reduction for zero-emission cars will continue until the end of 2029.
If an employer offers employees the opportunity to charge their own car or company car with limited benefit at work, the monetary value of the benefit arising from its use will be 30 euros per month for a fully electric car and 20 euros per month for a car that can be charged from an external source and is powered by electricity and gasoline/diesel.
The tax exemption for bicycle benefits will end. Bicycle benefits committed to on or after 24.4.2025, will be taxable from the beginning of 2026. Under the transitional period, bicycle benefits committed to before 24.4.2025, will be tax-exempt until the end of the contract period or for a maximum of five years from the date of introduction.
Tax-exempt allowances for business travels 2026
Daily allowance is 54 euros full amount, 25 euros partial amount and meal allowance is 13,50 euros.
Allowance for passenger car is 0,55 euros per kilometer.
Tax Administration’s decision for tax-exempt allowances 2026 can be found here.
Salary related expenses 2026
- Employer’s health insurance contribution 1,91 %
- Employer’s pensions act contribution 17,10 % on average
- Employer’s unemployment insurance contribution 0,31 % until salaries total 2 509 500 eur, from that above 1,23 %
- Employer’s accident insurance contribution 0,51 % on average, varies between companies
- Employer’s group life insurance contribution 0,06 % on average
- Employee’s pensions act contribution 7,30 %
- Employee’s unemployment insurance contribution 0,89 %
Changes in employment law 1.1.2026
Several legislative changes are coming in early 2026, which we are still awaiting confirmation from Parliament at the time of writing. Some of the government's proposals are expected in week that beginnings 15.12.2025.
On 1.1.2026, amendments to the Employment Contracts Act are scheduled to come into force, lowering the threshold for termination. Currently, a valid and compelling reason is required for termination based on personal grounds, but in the future, a valid reason will suffice, and the compelling nature of the reason will no longer need to be assessed. A list of examples of valid reasons will be included in the law.
An amendment to fixed-term contracts is also scheduled to come into force on 1.1.2026. In the future, a fixed-term contract of up to one year could be concluded without a justified reason if it is the first employment contract between the employer and the employee or if the employee has not been employed by the employer during past five years.
In addition, the notice period for layoffs will be shortened from 14 days to 7 days, and the obligation to rehire employees will be abolished for employers with fewer than 50 employees. We will provide more detailed information about these changes once they have been approved.
Changes in payroll
Please remember to inform us of any changes to your payroll, for example, changes on pension and accident insurance companies happen often at the turn of the year and we will need new insurance numbers before the first payroll of the year.
We wish you have a nice holiday season and successful year 2026!
Aallon Group, Payroll Services
