Employer, self-employed person or pensioner: 2027 earnings-related pension index and wage coefficient confirmed
The Ministry of Social Affairs and Health has confirmed the pension indices for 2027. The earnings-related pension index will be 3,184, which means pensions will increase by approximately 2.6% at the turn of the year. The wage coefficient has been confirmed at 1.773, an increase of approximately 3.6% from 2026.
The earnings-related pension index is used to adjust pensions already in payment. The wage coefficient affects the calculation of future pensions as well as several monetary amounts and limits that apply to employers and self-employed persons.
At the beginning of 2027, the wage coefficient will increase more than the earnings-related pension index. After the exceptional years of high inflation in 2023 and 2024, the development of the indices has returned to normal. This means that postponing retirement until after the turn of the year will further increase your starting pension.
Employer: how the earnings limits will change in 2027
In 2027, the lower limit for the obligation to take out TyEL insurance will be EUR 74.27 per month. In 2026, the limit is EUR 71.72 per month.
If an employee's earnings remain below the limit, you do not need to insure them under TyEL. However, you must still report their earnings to the Incomes Register.
Contract employer
You must take out TyEL insurance for your employees if you have at least one employee in continuous employment or if the wages you pay to your employees exceed EUR 10,638 over a six-month period. The corresponding limit in 2026 is EUR 10,272.
When either condition is met, you need TyEL insurance and become a contract employer. As a contract employer, factors such as the size of your company affect your TyEL contribution.
In 2027, an employer that paid more than EUR 2,509,500 in wages in 2025 is considered a large employer. If you are a large contract employer, your employees' work ability starts to affect the amount of your TyEL contribution.
Log in to our online service to see an estimate of next year's TyEL contributions and contribution percentages.
Occasional employer
As an occasional employer, you pay the basic TyEL contribution. You are considered an occasional employer if you do not employ anyone continuously and the total wages you have paid to your employee or employees over six months are less than EUR 10,638. In 2026, the limit is EUR 10,272.
As an occasional employer, you pay the TyEL contribution but do not need to take out TyEL insurance. The TyEL contribution percentage for occasional employers is the same at all pension insurance companies.
Contract employer or temporary employer?
Self-employed person: how the wage coefficient affects your YEL income
In 2027, the lower limit for YEL income will be EUR 9,758.84 and the upper limit EUR 221,625. In 2026, the corresponding limits are EUR 9,423.09 and EUR 214,000. You need YEL insurance when your YEL income reaches at least the lower limit.
Your YEL income is a key factor affecting both your earnings-related pension and your overall social security. It is defined as an annual amount and adjusted with the wage coefficient at the beginning of each year. This means that the wage coefficient increases both your existing YEL income and the lower and upper YEL income limits each year. The index increase keeps YEL income in line with general wage and price developments.
How the index affects pensions
If you are already retired, your pension in payment is adjusted using the earnings-related pension index. When the index is calculated, changes in wages account for 20% and changes in prices for 80%. Rehabilitation benefits are also adjusted using the earnings-related pension index.
Your pension will increase by approximately 2.6% at the turn of the year.
You can see your updated pension amount in the MyPension service from the beginning of December. You can also check your pension payment dates online.
Earnings limits for disability pensions and rehabilitation benefits are adjusted annually using the wage coefficient. You can check your personal earnings limit in the MyPension service.
If you are approaching retirement, the wage coefficient is relevant to you. It is used to calculate your future earnings-related pension by adjusting your annual earnings to the level of the year in which your pension begins. In the wage coefficient, changes in wages account for 80% and changes in prices for 20%.
If you are not yet receiving a pension, you can use the pension calculator in the MyPension service to estimate your future pension.
Why are the indices important?
The earnings-related pension index and wage coefficient help ensure that pensions remain reasonable in relation to earnings during working life and that pensions in payment retain their purchasing power. Pensions in payment are adjusted with the earnings-related pension index at the beginning of January every year. The indices therefore help maintain the value of earnings-related pensions.
YEL income is also adjusted at the beginning of each year to keep it in line with general wage developments. The wage coefficient is used for this adjustment.
Read more
Current topics
Ilmarinen’s return on investments was 6.2 per cent or EUR 4.2 billion
Employment pension insurance company Ilmarinen’s investments yielded 6.2 per cent in January–September. The market value of investments grew to a record-breaking level of EUR 71 billion.
YEL reform moves forward: more choice for self-employed persons on how contributions are determined
The proposal to amend the Self-employed Persons’ Pension Act (YEL) will now proceed to Parliament. After the reform, pension contributions and pension benefits would be based either on YEL income determined much as it is today or on actual earnings.
Ilmarinen had a strong first half of the year. In January–June, the return on investments was 5.3 per cent, or EUR 3.5 billion. Solvency ratio improved, and customer acquisition was at a good level.