Insuring an Employee
Work performed in the service of a private employer is covered by the Employees Pensions Act (TyEL). Insurance under TyEL has to be taken out when the employee is aged 18-67 and the earnings exceed the lower limit for the obligation to take out insurance. In 2011, the lower limit is EUR 52.49 per month. The earnings limit is revalued annually in line with the wage coefficient. The obligation to take out insurance starts from the beginning of the month following the employee’s 18th birthday.
The employer can take out statutory pension insurance under the Employees Pensions Act (TyEL) for the employee with a pension insurance company, an industry-wide pension fund, or by setting up a company pension fund. Contact information for pension insurance companies, industry-wide pension funds and company pension funds are available at the service Työeläke.fi.
The employers and the employee both pay their share of the pension contribution. The employer pays the entire pension contribution to the pension provider and withholds the employee’s share from his or her salary.
The employer is either an employer with insurance contract or an occasional employer.
Employer with an insurance contract
An employer with permanent staff, or whose wages paid during a period of six months exceed EUR 7,518 (in 2011) is obligated to take out pension insurance with one of the pension providers. Such an employer is referred to as an employer with an insurance contract. The pension insurance has to be arranged within the month following the payment of the wage.
The employer with insurance contract may choose to report the earnings of its employees to the pension provider either through an annual or a monthly notification. If the employer uses monthly notification, it will report the employees and their earnings to the pension provider on a monthly basis.
If the employer uses annual notification, it will report starting and ending employment contracts to the pension provider at least on a quarterly basis. In addition, the employer will submit a so-called annual notification of the annual earnings for the previous year for continuing employment contracts.
The basis for the contribution is affected by the employer’s size, which is evaluated on the basis of the employer’s total wage bill.
Occasional employer
An employer who employs no permanent staff and who pays wages during a period of six months to an amount of less than EUR 7,518 euros (in 2011) is an occasional employer. An occasional employer does not have to sign a separate insurance contract. It pays the contributions to the pension insurance company of its choice on a monthly basis, by the 20th of the month following the payment of the wage.
A private household acting as an employer has to sign an insurance contract if the criteria for an occasional employer are not met.
Further information
Pension insurance companies
- Etera Mutual Pension Insurance Company
- Ilmarinen Mutual Pensions Insurance Company
- Pensions-Alandia Pension
- Fennia Mutual Insurance Company
- Tapiola Mutual Pension Insurance Company
- Varma Mutual Pension Insurance Company
- Veritas Pension Insurance Company Ltd
17.06.2011