Generation of the TyEL contribution
The TyEL contribution is determined on the basis of the calculation grounds ratified by the Ministry of Social Affairs and Health. The calculation grounds of the TyEL insurance contribution are currently the same for all pension insurance companies, with the exception of client bonuses. A company-specific expense loading component will be introduced in the field as of 1 January 2023.
The generation of the TyEL contribution also depends on the size of your company. The payroll sum from two years ago determines whether you are considered a large-scale or a small-scale employer. If your company’s payroll sum exceeded EUR 2,169,000 in 2020, you are considered a large-scale employer in 2022.
TyEL contribution components
The TyEL contribution is calculated and paid on a monthly basis. The employer reports the earnings of their employees to the Incomes Register, generally within five days from the salary payment date. Elo will retrieve the relevant earnings information from the Incomes Register and utilise this information to calculate the TyEL contribution.
The TyEL contribution of large-scale employees consists of seven components:
- Old-age pension component
- Statutory charges component
- Premium loss component
- Disability pension component
- Pooled component
- Expense loading component
- Client bonus
The old-age pension component included in the TyEL contribution is calculated in the same manner for all employers. It is calculated separately for each employment relationship and is an age and gender-dependent percentage share of the individual employee’s wages or salary. The old-age pension component covers part of old-age pensions.
The pooled component is obtained by deducting the following items from the basic contribution:
• Old-age pension component
• Statutory charges component
• Expense loading component, excluding a possible discount
• Disability pension component, as if it were in premium category 4
• Premium loss component, at the rate applicable to occasional employers
Discount from the expense loading component
The TyEL contribution of a large-scale employer is affected by the premium category. The premium category is determined by the number of permanent disability and partial disability pensions granted to employees. As a large-scale employer, you will find the TyEL insurance payment category from Elo’s online service. Read more about premium categories in the TyEL contribution guide for large-scale employers.
You can affect the company’s premium category by keeping work ability risks under control
Work ability management promotes fluent work as well as the work ability, health and safety of employees. It means good everyday management, in which work ability issues can be dealt with proactively in addition to managing performance. The effects of work ability management show concretely in sickness absence and disability costs as well as the company’s productivity. The aim of Elo’s work ability management services is to help client companies manage their disability risks.