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Information about TyEL insurance

TyEL is a statutory pension insurance for employees

When you hire an employee into an employment relationship, you are required to take TyEL insurance in order to ensure the pension security of that employee. The abbreviation TyEL comes from the Finnish title of the Employees Pensions Act, Työntekijän eläkelaki.

TyEL insurance gives financial security for employees in old age or in the case of disability or the death of a family provider, and it also facilitates vocational rehabilitation. It is a statutory insurance that employers are obligated to take for their employees who fall within the specified age range and whose earnings are at least 68.57 € per month in 2024.

As an employer, you are responsible for arranging pension security for your employees through TyEL insurance and also for reporting their earnings to the Incomes Register. These responsibilities apply to companies, organisations and households acting as employers, regardless of whether they are permanent or occasional employers. 

Take the insurance no later than the end of the month following the employee's first salary payment month.

What is the overall cost of hiring an employee?

Elo’s wage calculator enables you to estimate the overall cost of hiring an employee. Simply enter the employee’s earnings and age and the calculator will give an estimate of the TyEL insurance contribution and other indirect labour costs to be paid. The calculator is of help when you are planning to hire your first employee or considering to give a pay raise to an employee.

Employer’s responsibility for other statutory insurance

As an employer, you are required to take the following statutory insurances for your employees, in addition to TyEL insurance:
  • Accident and occupational disease insurance
  • Group life insurance
  • Unemployment insurance.
Besides the insurance contributions above, employers will also pay the health insurance contributions for their employees to the Tax Administration

You can easily take the accident and occupational disease insurance as well as group life insurance for example through our insurance partners:

The unemployment insurance provider is the Unemployment Fund.

TyEL insurance provides employees with pension security

By taking TyEL insurance you will give comprehensive pension security for your employees. The earnings-related pension insurance covers the following:

Old-age pension – Old-age pension provides security when an employee retires at the lowest pensionable age. Employees are entitled to old-age pension once they have reached their lowest pensionable age and their employment relationship has ended. 

Partial early old-age pension – Partial early old-age pension allows employees to lighten their workload or give up working before they reach their pensionable age. While retired on a partial early old-age pension, there are no restrictions as to how much the employee can work or earn. Anyone who has turned 61 and is not receiving any other pension is entitled to partial early old-age pension.

Disability pension – Full disability pension generally begins once an employee has been paid sickness allowance by Kela for a maximum number of days, which usually occurs approximately one year from the start of the employee’s incapacity to work.

Partial disability pension – With a preliminary decision issued upon application, an employee can retire with a partial disability pension if their earnings have decreased to 60% of their previously established earnings.

Career pension – Career pension is available for persons aged at least 63 whose work ability has reduced and who have been working in a strenuous job throughout their career, or for a minimum of 38 years.

Survivors' pension – In the case of the death of an employee, a survivors’ pension will secure the livelihood of the spouse and children under 20 years old.

TyEL insurance also facilitates vocational rehabilitation of an employee whose work ability has significantly reduced. Vocational rehabilitation aims to maintain and improve an employee’s ability to work and thereby ensure their coping at work.

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Retirement of an employee

When your employee is approaching retirement, make sure to come to an agreement, well in advance, on the date for the termination of the employment relationship and the initiation of pension.

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