The adverse effects of precarious employment on mental health are well-established, yet the mediating mechanisms require further elucidation to understand their impact. In line with Allan et al.’s (2021), work precarity framework, subjective psychological experiences (in this study, job insecurity, moral distress, and work/family (in)balance) are investigated as mediating mechanisms linking the “objective situation of precarious employment” (using the EPRES scale) to mental health. As hypothesized, psychological experiences of work precarity mediate the detrimental effects of precarious employment on mental health in a large sample of Belgian and Finnish healthcare workers (n = 9041). These findings provide a novel exploration of the complex mediational pathway of subjective psychological experiences. Our study thereby offers evidence for an explanatory model that reconciles materialist and psychological understandings of the relation between precarious employment and mental health.