Earnings-related pension companies filed an application concerning the 2021 pension contribution

The Finnish earnings-related pension companies have filed an application with the Ministry of Social Affairs and Health concerning the calculation bases for the 2021 pension contribution. The average TyEL contribution to be collected in 2021 is 24.4 per cent of the payroll on which the contribution is based; this is in line with the central labour market organisations’ agreement. The contribution will thus return to the level it was at before the temporary reduction that was introduced in response to the coronavirus crisis.  

The average TyEL contribution to be collected in 2021 is 24.4 per cent of the payroll, i.e. the same as in early 2020. Since May, the TyEL contribution for the rest of 2020 has been subject to a temporary reduction of 2.6 percentage points.

Employees’ share of the pension contribution will remain the same in 2021: for those under 53 and over 62, it will be 7.15% of their salary, and for those between 53 and 62, it will be 8.65% of their salary.

The TyEL basic contribution for employers with an insurance policy will be 24.8% next year (25.3% in 2020 before the temporary reduction). Client bonuses and other reductions are deducted from that contribution.

The amount of the client bonus, which is dependent on the pension insurance company, is estimated to be 0.2% of the payroll on average in 2021 (0.7% in 2020). The amount of these client bonuses accumulated for 2020 and to be paid in spring 2021 is limited to one third of the normal amount. This is due to the temporary reduction given to TyEL contributions in 2020 due to the coronavirus situation, and it is based on a legislative change that concerns the client bonuses paid by all employment pension companies. Although the client bonuses to be paid next spring will be smaller, other components of the contribution will be correspondingly reduced such that the average contribution will remain at the same level as before the coronavirus crisis in the early part of 2020.

The disability pension component included in the contribution will rise and will be 1.2% of the payroll on average in 2021 (1.0% in 2020). If a company’s payroll was higher than EUR 2,125,500 in 2019, the impact of the contribution category will also be taken into account.

The contribution for temporary employers will be 24.8% next year (25.3% in 2020 before the temporary 2.6 percentage point reduction).

The YEL contribution for the self-employed will remain at the same level in 2021 as it is this year: for those under 53 and over 62, it will be 24.1% of their YEL income, and for those between 53 and 62, it will be 25.6% of their YEL income.

The Ministry of Social Affairs and Health is expected to confirm the earnings-related pension insurance contribution in mid-November.

For further information, please contact Actuarial Director Ritva Tarkiainen.

Read the Finnish press release on the 2021 pension contributions  Eläketurvakeskuksen uutinen Työeläkemaksut vuonna 2021

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