Reverse payroll calculation ancillary costs
In freelance musicians’ work, it is important to understand employer-side payroll costs, especially in situations where an agency calculates the fee so that the employer’s social security contributions are included in the agreed total amount (so-called reverse payroll calculation).
In reverse calculation, employer payroll costs are converted into reverse percentages using the formula:
contribution rate / (100 + contribution rate) × 100
For example, if the employer’s TyEL (earnings-related pension insurance) contribution is 17.1%, the reverse percentage is:
17.1 / 117.1 × 100 ≈ 14.6%
In this case, a total amount of 100 euros includes 14.6 euros in TyEL contributions, leaving 85.4 euros as gross pay. When a TyEL contribution of 17.1% is added to 85.4 euros, the total cost is again 100 euros.
Employer Payroll Costs in 2026 (average)
| Employer contribution | % of gross pay | Reverse % |
|---|---|---|
| TyEL (employer’s share) | 17.1% | 14.6 |
| Health insurance contribution | 1.87% | 1.83 |
| Unemployment insurance | 0.31% | 0.309 |
| Accident insurance (average) | 0.50% | 0.497 |
| Group life insurance | 0.06% | 0.059 |
Total employer payroll costs:
≈ 19.8% on top of gross pay
≈ 16.9% as reverse contributions included in the total amount
Employee Contributions (not part of reverse calculation)
From 2026 onwards, the employee pension contribution is uniform across all age groups:
- TyEL (employee’s share): 7.30%
- Unemployment insurance: 0.89%
- Health insurance contribution: 1.10%
- Daily allowance contribution: 0.88%
These contributions are deducted from the employee’s gross pay and are not employer payroll costs or part of the social security package included in the invoiced amount.
Travel Expense Reimbursements 2026
The domestic full-day allowance changed at the turn of the year.
The daily allowance amounts for 2026 are as follows:
- Half-day allowance 25 euros (travel over 6 hours)
- Full-day allowance 54 euros (travel over 10 hours)
The maximum amount of mileage reimbursement when using a private car decreased in 2026 and is 55 cents/km. An additional 4 cents/km for each additional passenger.