Learn about TyEL insurance
TyEL is an abbreviation for the Employees Pensions Act. When you hire an employee, you are responsible for arranging the employee's pension security. Pension security is arranged by insuring employees with TyEL insurance.
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What is TyEL insurance?
When should an employee be insured under TyEL?
Timing of taking out insurance
What does TyEL insurance cost?
Reporting salaries
Employee retirement
What to consider when hiring an employee?
What is TyEL insurance?
TyEL insurance is statutory, meaning it is mandatory when you hire an employee. The responsibility for arranging pension security with TyEL insurance always lies with the employer, and it applies to companies, organizations, and households, regardless of whether the employer paying regular wages is permanent or temporary.
TyEL insurance provides employees with security in case of old age, disablement, and the death of a family provider, and it enables vocational rehabilitation.
The method of insurance is determined by how regularly wages are paid. As an employer, you can operate either as a contract employer or a temporary employer.
Are you a contract or temporary employer? Find out here
When should an employee be insured under TyEL?
An employee should be insured under TyEL when they
• work in an employment relationship,
• are at least 17 years old, and
• earn at least 71.72 euros per month in 2026 (70.08 euros per month in 2025).
The upper age limit for insurance depends on the employee's age:
• 68 years for those born in 1957 or earlier
• 69 years for those born between 1958–1961
• 70 years for those born in 1962 or later
Work done alongside a pension must also be insured if the employee is below the upper age limit for insurance.
Timing of taking out insurance
The timing of taking out insurance depends on whether you pay wages regularly or once or very occasionally, i.e., whether you are a contract or temporary employer.
As a regular wage payer, or Contract Employer, it is advisable to activate TyEL insurance as soon as possible after hiring your first employee by filling out the insurance application. The insurance must be in effect no later than the first payroll, at which point the employee's earnings must be reported to the Income’s register, generally within 5 days of payroll. The employer insures all employees under the same TyEL insurance.
As an employer who pays wages once or very occasionally, you can alternatively manage TyEL insurance with Elo as a temporary employer without a continuous insurance contract while reporting employee earnings to the income register. A temporary employer does not fill out an insurance application.
When choosing the method of insurance, it is worth considering the differences, such as in price.
Read more about the differences between operating as a contract and temporary employer
What does TyEL insurance cost?
The TyEL contribution is a specific percentage of the employee's gross earnings.
The TyEL contribution is calculated and paid monthly based on the earnings information reported to the Income’s register for employees. As an employer, you are responsible for ensuring its payment to the pension company. The employee contributes to the TyEL payment according to their age, with a portion withheld during payroll.
The size of the TyEL contribution is primarily influenced by whether you operate as a contract or temporary employer. The contribution for a contract employer is always smaller.
The TyEL contribution for a contract employer is customer-specific and consists of several parts. The majority of it is the TyEL basic contribution, which is the same across all pension insurance companies, at 24.85 % in 2026 (25.28 % in 2025). Additionally, a small part of the contribution is the administrative fee, which is based on the pension companies' own calculation principles. Elements that reduce Elo's administrative fee include stability and size discount. The final TyEL contribution is also reduced by any potential client bonus.
The TyEL contribution for a temporary employer in 2026 is 25.85 % (26.28 % in 2025).
Employee contribution rate is 7.30 % for all employees in 2026 (7.15% for those under 53 years, 8.65% for those aged 53–62 years and 7.15% for those aged 63 and over in 2025).
Read more about how contributions are determined, how to estimate them in advance, due dates, obtaining payment extensions, and different billing methods.
Do you need a certificate of insurance?
With a TyEL payment certificate, you can demonstrate that your Contract Employer TyEL insurance is valid and the insurance payments are in order. You may need the certificate, for example, as an attachment to a proposal to show that you have insured your employees with TyEL insurance.
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Reporting salaries
As an employer, you report all wages and other earnings paid to employees to the income register after each payroll. Elo receives the necessary information from there for calculating the TyEL contribution and employees' pensions.
- Read more about reporting salary information to the Income’s register
- Frequently asked questions about the Income’s register
- Read more about which earnings are subject to TyEL
What to consider when hiring an employee?
Hiring a new employee is always a big step that brings new responsibilities. It's worth investing time and effort into recruitment to find the most suitable and motivated person for your company.
We have compiled a guide for you with tips on hiring your first employee.
