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As an employer you make sure that every euro your employee earns increases both his or her own pension and that of future generations. You can do this by taking care of your employees’ pension insurance, i.e. TyEL.
Pension cover is part of the Finnish social security system, and taking care of it is your obligation as an employer. You are responsible for the pension and social security cover of all of your employees between the ages of 18 and 67 to whom you pay a specific minimum sum in wages or salary each month. In 2019, that sum is EUR 59.36 per month (EUR 58.27 in 2018).
As a temporary employer you arrange for pension cover by paying TyEL contributions, as a contract employer you take out TyEL insurance.
The employer’s responsibility for an employee’s pension cover begins one month after the employee turned 17, and the responsibility ends at the end of the month in which the employee turns 68.
Pension cover is also your responsibility when
Pension cover is not your responsibility when
Self-employed persons take out self-employed person’s pension insurance, i.e. YEL insurance, for themselves (https://www.ilmarinen.fi/yrittaja/yrittajan-elakevakuutus/). YEL insurance is also often the right choice for you when you employ one or more members of your family >.
Freelancers can work as self-employed persons and employees at the same time. A freelancer is considered to be a self-employed person if he or she works without being in a private or public-sector employment relationship. A freelancer working as a self-employed person pays his or her earnings-related pension contribution in the same way as a self-employed person does. However, if the work carried out by a freelancer meets the criteria of an employment relationship, i.e. work is carried out for another against compensation under direction and supervision, he or she is considered an employee. In this case, the employer must take care of the freelancer’s pension insurance in accordance with the earnings-related pension contributions of private sector employees.
Pension cover is also your responsibility when you hire a foreign employee to come work in Finland, except when your employee is a posted worker arriving from an EU or EEA country, Switzerland or a social security agreement country. If your foreign employee is not a posted employee, insure him or her with TyEL insurance just as you would your Finnish employees. Read more about TyEL insuranc abroad ›
Insuring an employee posted to Finland from abroad
You may also apply for an exemption from the obligation to take out insurance from the Finnish Centre for Pensions.
In some cases, the pension cover of your employee is nobody’s responsibility, bus as an employer you can still take out voluntary TyEL insurance for him or her. This may be the case with, for example, auditors or Board members. However, if the employee is in an employment relationship with you, instead of voluntary TyEL insurance, add the remuneration for the employee’s position of trust to your statutory TyEL insurance.
As a temporary employer, you can conveniently calculate wages and arrange your employees’ pension cover on the Palkka.fi or Suoratyo.fi service. The service will submit all necessary notifications to the Incomes Register. The TyEL contribution is also created directly in the service. Ilmarinen will not send a separate invoice.
As a contract employer, you must arrange for pension cover when you are hiring an employee or at the latest when you are calculating your employees’ wages. Wages and salaries must be reported to the Incomes Register within five days of payment. For the report to the Incomes Register, you will need an insurance number, i.e. a pension policy number.
If you already have TyEL insurance you can add all of your new employees to it.
Arranging for other social security becomes your responsibility when you pay more than EUR 1,300 for work during a calendar year. Take out three separate insurance policies:
If the wages and salaries you pay exceed the lower limit set by the tax authority, also pay the social security contribution, i.e. the health insurance contribution.
You must insure summer employees just as your other employees aged 17–67.