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As an employer you make sure that every euro your employees earn increases their pensions. Theirs and those of future generations. You take care of it when you arrange for your employees’ pension insurance, i.e. TyEL.
When you take care of the pension cover of your employees, you are doing your bit for Finnish social security. After all, pension cover is part of social security. That is why arranging pension cover is your right – and responsibility.
You are responsible for all of your employees between the ages of 18 and 67 who you pay a specific minimum sum in wages or salary each month. In 2017, that sum is EUR 58.19 per month and in 2018 slightly more at EUR 58.27. You are often responsible for arranging both the pension cover and other social security.
How you arrange pension cover depends most on whether you are a temporary employer or a contract employer. Whichever you are, one thing is for sure. Arranging pension cover with us is easy.
As an employer you can be either a temporary or contract employer. As a household employer you are either one or the other. As a temporary employer you arrange for pension cover by paying TyEL contributions, as a contract employer you take out TyEL insurance, i.e. employee’s pension insurance.
You are a temporary employer when both of these hold true in your case:
You know you are a contract employer when even one of the following conditions applies to you:
If you are not sure which you are, call our customer service.
The pension cover of your employees is your responsibility once they reach a specific age. From the beginning of the month following the employee’s 17th birthday you are responsible for his or her pension cover. Your responsibility ends at the end of the month in which the employee turns 68.
Pension cover is also your responsibility when you hire a pensioner. And when you hire out one of your employees to another employer. Also when you post the employee abroad as a posted employee.
Sometimes the pension cover is not your responsibility even when the employee works for you. This is the case when he or she works for you as an employee of another company, such as through a Finnish or foreign temp agency. In that case, the company in question will take care of your employee’s pension cover.
Pension cover is not your responsibility either when the employee works for you as a self-employed person. He or she must arrange for his or her own pension cover. And take out self-employed person’s pension insurance for themselves, i.e. YEL insurance. This also applies when he or she owns more than 30 per cent of your company and also works for you. YEL insurance is often the right choice for you when you employ one or more members of your family.
A freelancer is considered to be a self-employed person if he or she is working but has no employment contract or is not in public service. Self-employed freelancers are responsible for their own pension contributions in the same way as other self-employed persons.
However, if the freelancer’s work fulfils the criteria of an employment relationship, the freelancer is considered to be an employee. Such criteria are fulfilled if the freelancer works for another person for remuneration under that person’s supervision and control. In that case, the employer is responsible for the freelancer’s earnings-related pension insurance, and the freelancer’s pension contributions are collected in the same way as those of employees in private sectors.
A freelancer can work simultaneously as a self-employed person and as an employee.
Pension cover is also your responsibility when you hire a foreign employee to come work in Finland. Unless your employee is a posted employee arriving from an EU or EEA country, Switzerland or from a social security agreement country. In that case the employee’s pension cover is the responsibility of the employer who has posted the employee overseas. The employee must have a certificate of posting as proof of this.
When your employee arriving in Finland is not a posted employee, insure him or her with TyEL insurance just as you would your Finnish employees.
If you represent a foreign employer and send your employees to work in Finland, take out TyEL insurance for them. Unless you send them to Finland from an EU or EEA country, Switzerland or a social security agreement country. In that case, you must arrange their pension cover according to the practices in your country. If you send your employees to Finland from a non-agreement country, only insure them if they intend to work in Finland for more than 2 years. You may also apply for an exemption from the obligation to take out insurance from the Finnish Centre for Pensions.
Your situation may also be one in which the pension cover of your employee is no-one’s responsibility; not yours, not theirs or anyone else’s. You can still take care of it.
This is possible by taking out voluntary TyEL insurance for the employee. You can do so, for example, for a person in a position of trust, such as a member of a board of directors or an accountant. If he or she is in your employment, do not take out voluntary TyEL insurance; instead link the remuneration he or she receives for the position of trust to your regular TyEL insurance. The statutory one.
As a temporary employer the simplest way to arrange pension cover is in the Temporary employer’s insurance service (the service is availabe in Finnish and Swedish). Visit the service at the latest by the 20th of the month following the payment of wages or salaries. When you submit the information concerning your employee, the service calculates the relevant TyEL contribution. Pay the contribution at the end of your visit.
Contract employers arrange pension cover by taking out TyEL insurance. Take out TyEL insurance preferably immediately, at the latest during the month following the payment of wages and salary. You can take out the insurance with our partner Pohjola or online (the service is availabe in Finnish and Swedish). You can also fill in and print out an application for TyEL insurance and send it to Ilmarinen by post. If you already have TyEL insurance you can add all of your new employees to it.
As a temporary employer or contract employer you pay the TyEL contribution, which is a specific percentage of the wages or salary. Your employee pays a share of the contribution. Your job is to deduct the employee’s share of contribution from his or her pay and pay us the total contribution. Do the same also when you insure your employee using TyEL insurance.
Arranging for other social security becomes your job when you pay more than 1200 euros for work during the calender year. Take out three separate insurance policies: insurance against occupational injuries and diseases, unemployment insurance and group life insurance. And if you pay the employee more than the lower limit set by the tax authorities, also pay the social security contribution, i.e. the health insurance contribution. After that, your employee’s social security is taken care of.