Reduction in employer’s TyEL contributions for the rest of the year
The law draft to reduce the employer’s TyEL contribution by 2.6 percentage points for the period between 1 May and 31 Dec 2020 was passed earlier this month. The law will come into effect on 1 May 2020.
(Updated 29 March 2020)
The reduction applies to the employer’s TyEL contributions for salary and wages between 1 May and 31 Dec 2020. For these, the TyEL basic contribution will be 22.7 per cent of the salary and wages. The reduction will apply to both contract employers and temporary employers. The employee’s pension contribution will not change. The change will also not impact the YEL contribution.
Ilmarinen will take the reduced TyEL contribution rate into account in TyEL invoices calculated based on future salaries. Salaries are reported to the Incomes Register as usual.
No client bonuses will be paid during the reduction period. Client bonuses included in the 2021 insurance contributions and to be paid in spring 2021 will thus be one third of the employment pension insurance company’s bonus transfers for 2020. Bonus transfers accrue on the efficiency and solvency of operations.
The impact of the reduction will be compensated for in full during 2022–2025 by raising the employer’s TyEL contribution.
Current topics
Earnings-related pension insurance contributions for 2026 confirmed
The Ministry for Social Affairs and Health has confirmed the earnings-related pension insurance contributions for 2026. The average contribution for employer’s pension insurance (TyEL) is 24.4 per cent of the payroll in 2026.
The increased pension contribution and the higher accrual rate for employees aged 53–62 will be eliminated in 2026. From the beginning of the year, the contribution will be the same for employees of all ages: 7.30 per cent of the wage, regardless of age.
The upper age limits for TyEL and YEL insurance will change in 2026
The 2017 pension reform set an upper age limit for TyEL and YEL insurance based on the year of birth. The change will have an impact from the beginning of 2026, when those born in 1958 and younger are insured and will continue to accrue pensions in 2026.