Employer's Obligations in the Event of Death – Salary, Leave and Insurance
· 4 min read
Termination of employment
When an employee dies, the employment relationship ends automatically on the date of death. This is one of the few situations in which employment terminates without a notice period and without action by either party.
Employer's immediate actions
- Notify the staff -- sensitively and in accordance with the wishes of the deceased's family
- Stop salary payments -- for the period after the date of death
- Calculate the final salary -- up to the date of death
- Investigate group life insurance -- notify the insurance company
- Contact the family -- agree on practical matters
Employment documentation
The employer must prepare an employment certificate at the estate's request. This may be needed for applying for benefits.
Final salary and holiday compensation
The estate has the right to all employment-related claims up to the date of death.
Salary claims
- Salary up to the date of death (including the date of death)
- Holiday compensation for unused leave days
- Holiday bonus (if included in the collective agreement)
- Performance bonuses for the earning period
- Overtime compensation and other supplements
Payment to the estate
The final salary is paid to the estate's account. The employer needs:
- Information about the estate's bank account
- Shareholders' contact details
- A possible power of attorney from the estate representative
The salary must be paid on the normal pay date or at the latest upon termination of employment, i.e., in practice on the next pay date after the date of death.
Taxation
Tax is withheld from the final salary as normal. The salary is reported to the income register under the deceased's personal identity code. The claims are taken into account in the deceased's final tax assessment and in the estate inventory.
Group life insurance
Group life insurance is a significant financial safety net for the deceased's family. It is included in almost all collective agreements in Finland.
Compensation recipients
Group life insurance compensation is paid directly to:
- The spouse or registered partner
- A cohabiting partner, if they have a shared child or at least 5 years of cohabitation
- Children under 18
Compensation amount
The sum depends on the deceased's age and family situation:
- Spouse's basic compensation: approximately 5,000--16,000 euros
- Child supplement: approximately 7,500 euros per child
- Accident supplement: compensation doubles if the death was caused by an accident
Employer's role
The employer notifies the insurance company of the death and provides the family with the necessary information. Compensation is usually paid within 2--4 weeks. Group life insurance compensation is tax-free up to a certain limit.
Pension matters
Occupational pension
Occupational pension insurance ends on the date of death. Pension rights accumulated up to the date of death are not paid to the estate as inheritance, but they form the basis for the survivors' pension.
Survivors' pension
The deceased's surviving spouse and children under 18 can apply for a survivors' pension from the occupational pension company:
- Widow's/widower's pension -- depends on the deceased's accumulated pension and the surviving spouse's own income
- Child's pension -- paid to children under 18
- Application -- contact the deceased's most recent occupational pension company
The survivors' pension is applied for separately from Kela's national pension system and from the occupational pension company. They complement each other.
Employer's pension contributions
The employer reports the final salary to the income register, and pension contributions are calculated automatically. A separate notification to the pension company is usually not needed.
Rights of next of kin and communication
Paid bereavement leave
The death of a close relative entitles to paid leave in most collective agreements:
- Death of a spouse or child: 1--3 days
- Death of a parent: 1--2 days
- Death of a sibling: 1 day (varies by agreement)
- Day of the funeral: generally paid
Employer conduct
A good employer:
- Gives the family time and space for grief
- Handles official matters flexibly
- Actively informs about group life insurance and other benefits
- Helps with practical matters, such as returning personal belongings from the workplace
The deceased's belongings at the workplace
The employer collects the deceased's personal belongings and hands them over to the family. Work equipment (computer, phone) is returned to the employer. If the deceased had a company apartment or car, the return is agreed separately.
Read more about handling insurance matters and first steps after a loved one's death.
Frequently asked questions
When does the employment relationship end?
The employment relationship ends automatically on the date of death without a notice period.
What salary claims does the estate have?
Salary up to the date of death, holiday compensation, holiday bonus, and any bonuses.
How is group life insurance claimed?
The employer notifies the insurance company. The compensation is paid directly to the spouse and children.
Is a family member entitled to paid leave?
Most collective agreements include 1–3 days of paid bereavement leave due to the death of a close relative.
Frequently asked questions
When does the employment relationship end?
The employment relationship ends automatically on the employee's date of death without a notice period. The employer does not need to make a separate decision. The employment does not transfer to the estate. There are no exceptions – death is always grounds for termination of employment.
What salary claims does the estate have?
The estate is paid salary up to the date of death, holiday compensation for unused leave days, any performance bonuses for the earning period, and holiday bonus if included in the collective agreement. These claims are estate assets and are taken into account in the estate inventory.
How is group life insurance claimed?
The employer notifies the insurance company of the death, which initiates the compensation process. The compensation is paid directly to the spouse and children under 18 without a separate application. The employer provides the family with the necessary information about the insurance and the insurance company's contact details.
Is a family member entitled to paid leave due to a loved one's death?
Most collective agreements include the right to 1–3 days of paid leave due to the death of a close relative (spouse, child, parent). The leave generally covers the day of death and the day of the funeral. If there is no collective agreement, the matter is agreed with the employer. The Employment Contracts Act does not directly regulate bereavement leave pay.
What happens to the employee's pension contributions?
Occupational pension insurance ends on the date of death. Accumulated pension rights are not inherited, but the surviving spouse and children can apply for a survivors' pension from the pension company. The survivors' pension consists of a widow's/widower's pension and a child's pension, the amounts of which depend on the deceased's accumulated pension.
Read also
A practical guide to the first hours after a loved one's death. Who to contact, what documents you need, and how to take care of yourself.
A guide to handling insurance matters after a loved one's death: claiming life insurance, group life insurance, cancelling policies, and Kela benefits.
A clear guide to estate banking matters: the deceased's account, paying bills, bank-specific instructions and required documents.