How much does it cost to run a one man limited company?

One of the things I wondered before starting my own company was: how much does it cost to run a limited company? How does xxxx € billed to my company relate to the amount I’m getting as an employee?

To be honest I didn’t make the calculations beforehand. I just went for it. 🙂 But now I know a bit more and I can share my knowledge to whomever out there wondering about starting their own business.

Assumptions and disclaimers

  • You run a limited company (osakeyhtiö), owned 100% by you. Taxation for sole proprietors is different.
  • Your company is in Finland 🇫🇮
  • You don’t have any employees
  • I’m basing this on my experiences as an IT consultant, I’m assuming you don’t have to invest into heavy machinery or such
  • These calculations may be wrong and probably I’m missing something as I’ve run my company only a few months (please let me know if I’m missing something :))

Direct expenses

  • YEL-insurance ~200€ / month (after first 4 years this will be 250€)
    • Here we have chosen a relative small annual income for your YEL-insurance (12600 € / year).
    • This affects not only the pension you’ll some day get, but also the level of basic income in longer sick and parental leaves.
    • (For reference, YEL-insurance for 60000€/year income is roughly 1000€ / month)
  • Insurances ~30€ / month. This is where you will have variance, depends totally what kind of insurances you want to have. I have health insurance and liability insurance.
  • Book-keeping ~65€ / month. You can get it cheaper if you wanna do it yourself, but I’ve chosen to hire an accountant and have them also calculate my salaries.
  • Social security payment is roughly 1% of the salary you choose to pay yourself. So with 5000€ monthly salary this will be 50€ / month.
  • Bank stuff, business debit card and web service interface for accountant ~20€ / month.
  • Yearly financial statement done by accountant 250€ / year
  • Invoicing software (Zervant) 70€ / year
  • Total: ~400€ / month.

Indirect expenses

  • Obviously you pay for your holidays, training, and whatever time you’re not billing your customer. Don’t think that you will be billing 37,5h weeks through the year. 80% is a better guess.
  • If you get sick, you get money from Kela only after 4 days. And if you only pay minimum YEL-insurance, you’re not really getting anything.
  • There are unemployment funds, but they’re a lot more expensive than they’re for employees. I’ve chosen not to be part of those and save up some buffer instead.

Indirect benefits

  • You get to buy all kinds of gadgets like computers and phones for your company. This benefits you in two ways: 1) if the gadget is used for creating income for your company (you can be creative here), you can deduct that in your company’s taxes; 2) you can deduct the value added tax (ALV)
  • You can rent yourself a working room from your home

How much salary to pay?

So, how much do you want to pay yourself? One thing to consider here is that even for those “tax free” diviends, you will be paying roughly 27% tax. (20% company tax from the profit and then the smallest diviend tax% is 7,5%). So, I’ve thought this so that I want to pay enough so that my personal tax% is close to that 27%, perhaps a bit less. If I pay too much salary, my personal tax% will rise higher, but on the other hand I don’t want to pay too little, because then my tax% would be “too small” and I don’t reap the benefits of tax progression.

But this area is complicated, and also depends really much on your case. Maybe you want to save more for the company? Maybe you’re investing the money you’re saving up for the company?


For me, the biggest benefits of running a limited company are the ability to control how much salary you pay yourself and the possibility to buy all kinds of stuff for the company. After that there is a lot of micro-optimization to do — I myself haven’t yet done much.

I’d love to hear experiences of feedback about this article! Next I’m planning to write about the bureaucracy of running a limited company.

3 thoughts on “How much does it cost to run a one man limited company?

  1. Really interesting post! I’ve been living in Finland for a long time and I got to know all the bureaucracy stuff pretty well. One thing that I thought limited company owners can do is to pay themselves a very small salary and then claim e.g. housing allowance from KELA (as the owner in question wouldn’t hit the benefit threshold). Highly unethical of course, but would it be possible to “hack” the system like that, or am I being too naive here?

    1. Yes, that indeed is possible. And you even don’t need to pay a small salary, it’s enough that your YEL-work income (“työtulo”) is small one. But for me personally that would cross the line for being too unethical of course. 🙂

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