TyEL insurance

With statutory TyEL insurance you ensure pension cover for your employees. As an employer, it is your responsibility to take out the insurance and to report your employees' earnings.

Your employee is insured under TyEL if

• the work is performed under an employment contract,
• the employee is 17 years or older and
• the monthly salary paid for the work is at least EUR 61.37.

The upper age limit for TyEL insurance depends on the employee's birth year:

• for those born in 1957 or earlier it is 68 years,
• for those born in 1958-1961 it is 69 years and
• for those born in 1962 or later it is 70 years.

If you don't employ regular staff and salaries are less than EUR 8,790.00 within 6 months, you can act as a temporary employer.

Report your employees’ earnings to the Incomes Register within five days of wages being paid. Varma will receive earnings data for the calculations of insurance contributions and pensions directly from the Incomes Register.

Usually, the earnings that accrue pension are the same as the earnings subject to withholding tax. The earnings that form the basis for pension always consist of compensation for work performed.

In 2021 the basic TyEL contribution is 24.80% of the employees’ wages and salary. 

The employees' share of the contribution is:

• 17-52 years of age: 7.15% of wages and salary
• 53-62 years of age: 8.65% of wages and salary
• 63-69 years of age: 7.15% of wages and salary

You withhold the employee's pension contribution from the employee's salary and pay the entire earnings-related pension contribution to the pension insurance company.

See the table (pdf) from the link below for social security contributions and limits in 2021.

There are two ways to pay TyEL insurance contributions:

• immediate invoice
• consolidated invoice

We recommend selecting the payment method according to the number of times salaries are paid within a one-month period.

You can view and make changes in the payment method by logging in to our eServices.

We also recommend switching to e-invoicing. Submit your e-invoice address easily in the eServices.

If you have difficulties paying the TyEL contributions on time, visit our page Information regarding the coronavirus situation to learn what you can do.

There will be a temporary reduction of 2.6 percentage points in employers' pension insurance contributions for the year 2020. The reduction is in force 1.5.–31.12.2020, and will so affect salaries subject to TyEL paid between May and December 2020. The temporary reduction will be automatically taken into account in insurance contribution invoices.

The change reduces the employers’ share of the pension insurance contribution. It does not impact the size of the employees' share. The reduction concerns both TyEL insurance policy holders, and temporary employers.

Read more information regarding the coronavirus situation.

The insurance contribution interest rate is used to calculate the amount of interest on TyEL insurance contributions; in 2021, the rate is 2.00%. The insurance contribution interest rate is a statutory component of the insurance contribution.

In accordance with the insurance terms and conditions, the theoretical due date is the last day of the month after the month in which salaries are paid. The insurance contribution interest rate is not included in contributions that are paid by the theoretical due date. If the insurance contribution is paid after the theoretical due date, the insurance contribution interest rate is calculated from the theoretical due date until the date of payment.

The insurance contribution interest rate is charged, for example, in cases where the payroll was reported to the Incomes Register late, in which case the due date of the invoice falls after the theoretical due date. The insurance contribution interest rate is also charged on payments that have been deferred due to the exceptional situation caused by the coronavirus. The payment period is interest-free up until the end of the month after the month in which salaries were paid, and from that day on, the insurance contribution interest rate is charged until the date of payment.

Client bonuses are paid once a year, in spring. All customers who take out a TyEL insurance policy with Varma will benefit from client bonuses right from the start of the customer relationship. We have been paying the best client bonuses since 2007.

You can conveniently take care of many matters related to TyEL insurance and payments yourself in our eServices.

• View your TyEL insurance invoices. You can see the earnings data that the invoices are based on, as well as the payment status of your insurance. You can also save a copy of an invoice for yourself or check your payment information.
• Browse earnings and contributions by employee.
• Order a payment certificate to your email or download it as a PDF file in Finnish, Swedish and English.
• Update invoicing addresses, add an e-invoicing address and change your invoicing method.

Your user rights influence the information you can access in the service. If you do not yet have user rights, become a user of our eServices.

The ‘TyEL contributions for financial statement’ service available in our eServices supports accounting by allowing you to easily retrieve information on TyEL contributions and invoicing for monthly reconciliations or interim accounts, for example.

TyEL contributions section:

• You can see the TyEL contribution information for the previous and current year.
• The service shows previous year’s TyEL contribution information as per the situation at the turn of the year.
• The current year’s contribution information is shown as per the situation on the last day of the preceding month. The information in the service is updated monthly.
• You can also download a PDF report on the TyEL contribution information.

TyEL invoices section:

• You can see the total of invoiced TyEL contributions and payments made during the period.
• The service specifies the year to which the contribution applies.

In Varma’s eServices, you can estimate your TyEL pension contribution for the ongoing and next year. The new service allows you to monitor the realisation of your budget and prepare an estimate for your financial statement at the end of the year.

The estimate in the eServices:

• Takes into account the TyEL payroll reported in the Incomes Register for the ongoing year and the payment calculated from this.
• Gives an estimate of the TyEL pension contribution in euros for the whole year.
• Gives an estimate of the TyEL contribution percentage. The percentage takes into account the temporary reduction, which is valid from 1 May to 31 December 2020.
• Gives an estimate of the employees’ contribution.
• Takes also into account the reduction on the administrative cost component and the client bonus.

You can make several estimates for the same year and save your calculations in the service. The estimate is available in Finnish, Swedish or English. Estimates can be made by all users who have access to the insurance payment information.

Are you posting an employee abroad? Are you going to hire a foreign worker? Do you need more information about social security in a particular country?

We have put together a comprehensive information package related to international work and pension cover:

• Posting an employee abroad
• Pensionable salary
• Foreign employee or employer
• Insuring temporary agency workers
• Brexit and how it will affect how work abroad is insured

We have compiled instructions on how to deal with TyEL insurance in the following situations:

• Corporate transaction
• Change in company form
• Merger
• Demerger

Please note, that changes in business operations might also affect the insurance of the company’s owners.