Determining the TyEL contribution

Since 1 January 2017, the employee’s pension insurance contribution has been equal in size for all age groups. For employees aged 53–62, the contribution is larger than for others until the end of the transitional period, the end of 2025, as the employees also accrue more pension during the transitional period. The larger contribution is applied from the beginning of the month after the month in which the employee turns 53 until the end of the month in which she or he turns 63.

Withhold the employee’s contribution from his or her pay also in the following situations:

• the employee receives pension in addition to the pay,
• you have taken out voluntary TyEL insurance for the employee for work abroad or a position of trust, or
• you have taken out voluntary insurance for the employee even if his or her pay falls below the TyEL lower limit (the lower pay limit for the obligation to insure in 2020 is EUR 60.57 per month, in 2019 EUR 59.36 per month).

All wages and salaries must be reported to the Incomes Register.

Check the social security contributions here ›

The client bonus is a discount that a contract employer receives in spring. The amount of the client bonus to be distributed depends on the efficiency of our operations and our investment returns. The client bonus is calculated in spring and taken into account in the TyEL invoice following the calculation. The amount of the insurance-specific bonus is impacted by the customer’s size and the length of the customer relationship with Ilmarinen. For a new company or a customer transferring from another company, the client bonus starts to accumulate from the beginning of the customer relationship.

The client bonuses paid in 2019 are based on new criteria. Ilmarinen’s new client bonus model puts a stronger emphasis on the customer’s payroll. The bonus criteria are more fair towards both old and more recent customers.

To check the client bonus, log in to our online service.

The bonuses you will receive are influenced by:

• how long you have been a contract employer with Ilmarinen, i.e. how long your TyEL insurance with Ilmarinen has been in force,
• how large an employer you are (the wages or salaries you pay your employees influence the amount of client bonus),
• whether you are a contract employer or temporary employer (the client bonus does not apply to temporary employers).

The client bonus applies to you from the day on which your TyEL insurance begins with Ilmarinen. You will receive your first bonus during your second insurance year. You will receive the bonus even if you transfer your insurance to another earnings-related insurance company. In future, the customer will receive a client bonus for the final year on the same basis as if the insurance were to continue. Due to company-specific differences, the client bonuses to be paid after the final year are approximately half of the previous amount. Additional client bonuses will be paid to the customer for up to three years after the termination of the insurance. The new rules on additional client bonuses apply to policies that expired after 31 December 2016 due to a transfer.

The fact that you receive client bonuses is a sign of Ilmarinen’s solvency and successful investment operations: the return on investments has covered all incurred costs and is large enough to cover more than just current and future pensions. The return is then distributed to our customers as client bonuses.

The size of a contract employer influences the amount of the TyEL contribution. The size of a temporary employer makes no difference to the contribution as temporary employers only pay the TyEL basic contribution.

Whether a contract employer is considered to be a large or small one depends on the payroll, which is reviewed annually. In 2020, your size depends on the 2018 payroll: a contract employer is a small employer if its payroll was less than EUR 2,086,500 and a large one if its payroll exceeded that amount.

Large employer's TyEL contribution (pdf)

Small contract employers always only pay the TyEL basic contribution, whereas large contract employers belong to a certain contribution category.

The disability pension contribution is based on the contribution category. The disability pension contribution is used to fund employees’ disability and partial disability pensions.

 The amount of the contribution depends on the payroll and the contribution category. The contribution category depends on the amount of disability and partial disability pension that your employees receive.

There are 11 contribution categories. In the lowest contribution category, you pay the least disability pension contributions, and in the highest category the most. You belong to the lowest contribution category when your employees have received few disability pensions and partial disability pensions during two calendar years. The disability pension contributions for 2018 are based on the pensions that your employees received in 2015 and 2016; the contributions for 2019 are based on the pensions paid in 2016 and 2017. Mergers and acquisitions also impact the contribution category.

The table shows the size of your disability pension contribution when your payroll is EUR 5 million or more. If your payroll is smaller or if you wish to have more detailed information about the contribution categories, read our brochure ’TyEL Insurance Contribution for Large Businesses’.

Disability pension contribution, euros per year and % of payroll

Log in to our online service to find out how the contribution category influences your insurance contribution. This will give you an idea of the amount of disability pension contribution that you should prepare for. If you wish to receive an estimate sooner, contact our customer service at tel. +358 10 284 3722.

If you are worried about the contribution category, Ilmarinen’s tools for improving well-being at work are available to you. We will gladly assist you in matters related to well-being at work.

As a general rule, the TyEL insurance contribution falls due on the last day of the month following the payment of the wages or salaries.

On our online service, you can change the TyEL contribution due date so that it occurs during the second month following the payment of the salaries or wages. In this case, insurance contribution interest will be added to the insurance contribution for the second month.

On the Palkka.fi service, the TyEL insurance contribution always falls due on the last day of the month following the payment of the wages or salaries.