The Finnish pension contribution (TyEL)
The biggest deduction on a Finnish payslip after tax is the earnings-related pension contribution, and it buys you pension from every euro of salary.
Checked by Radif Partners · Editorial policy · Calculation method
The earnings-related pension contribution (työeläkemaksu, or TyEL contribution) for private-sector employees in Finland is 24.40 % of pay in 2026. You pay 7.30 % and your employer pays the rest, 17.10 % on average. Since 2026 the employee rate is the same for everyone aged 17 to 69. On a monthly salary of €3,500 your share is €255.50 and your employer’s about €598.50. Employees aged 18 to 64 also pay unemployment insurance of 0.89 %, here €31.15. In return, pension accrues at 1.5 % of your full gross pay, so a year on €40,000 adds about €50 a month to your future pension before the life expectancy coefficient. Neither contribution is part of the tax card percentage; they appear as separate lines on your payslip and are deducted from your taxable income automatically.
Pension contribution on your pay
Your contribution per month
€255.50
| Employer’s average share | €598.50 (17.10 %) |
| Total into pension insurance | €854.00 (24.40 %) |
| Pension accrued per month of work | €4.38 |
Who pays what
Private-sector earnings-related pensions are funded by the TyEL contribution, which the Finnish Centre for Pensions (Eläketurvakeskus) confirms each year. In 2026 it averages 24.40% of payroll: 7.30% from you and on average 17.10% from your employer. Employer rates differ with company size and the insurer’s client bonuses, but the employee rate is identical for everyone.
Unemployment insurance of 0.89% is withheld alongside it from employees aged 18 to 64. It funds the earnings-related unemployment allowance paid by the funds (kassa). Both rates are used in Vero’s withholding rules, which subtract them from income before tax is worked out.
| Monthly salary | Your TyEL | Unemployment insurance | Employer TyEL (avg.) | Pension accrued / month |
|---|---|---|---|---|
| €2,000 | €146.00 | €17.80 | €342.00 | €30.00 |
| €2,500 | €182.50 | €22.25 | €427.50 | €37.50 |
| €3,000 | €219.00 | €26.70 | €513.00 | €45.00 |
| €3,500 | €255.50 | €31.15 | €598.50 | €52.50 |
| €4,000 | €292.00 | €35.60 | €684.00 | €60.00 |
| €5,000 | €365.00 | €44.50 | €855.00 | €75.00 |
| €7,000 | €511.00 | €62.30 | €1,197.00 | €105.00 |
The last column is the monthly pension that one year at that salary adds, before the life expectancy coefficient and index increases. At €3,500 it is €52.50; 30 years on that salary would give roughly €1,575 a month before the coefficient. For a career with changing pay, use the pension calculator.
Accrual on the whole gross salary
Pension accrues at 1.5% of each year’s earnings from age 17. The base is your gross salary as it stands; your own contribution is no longer deducted from it, a rule dropped in the 2017 reform. That reform also ended the higher accrual for older workers, and from 2026 contribution and accrual are the same at every age. Holiday bonus, overtime, performance pay and taxable benefits count as pensionable salary, while expense allowances such as per diems and mileage do not. More detail, including pension built up while on benefits, is on the pension accrual page.
The life expectancy coefficient
Accrued pension is not paid out unchanged. When your old-age pension starts it is multiplied by the life expectancy coefficient (elinaikakerroin) of your birth cohort, 0.94643 for people born in 1964. The €50 a month earned from a year on €40,000 would become about €47.32. In the meantime, accrued amounts are revalued with a wage coefficient during your career, so pension earned in your twenties keeps pace with pay levels.
What it really costs you
The full contribution shows on your payslip, but its net cost is lower because it is deductible. On €42,000 a year you pay €3,066 of pension contribution and €374 of unemployment insurance, and both reduce your taxable income. Your tax card rate already assumes these deductions, so no separate refund follows. Total deductions from pay therefore run about 8.19 points above the percentage on your tax card. The gross salary calculator works this backwards from a target net pay.
A payslip, line by line
Here is a €3,500 monthly payslip for someone living in Helsinki who is not a church member. Tax is withheld at the tax card rate of 14.0%, and the two contributions come on top as separate lines.
| Line | Euros per month |
|---|---|
| Gross salary | €3,500.00 |
| Tax withheld at 14.0% | −€490.00 |
| Pension contribution 7.30% | −€255.50 |
| Unemployment insurance 0.89% | −€31.15 |
| Net pay | €2,723.35 |
The pension line is about a third of everything withheld. Unlike tax, it comes back as pension accrued on the same salary. Unemployment insurance is charged whether or not you have joined an unemployment fund (työttömyyskassa), but only fund members receive the earnings-related allowance it finances.
The employer’s side
For your employer, a €3,500 salary costs about €4,098.50 a month with TyEL alone, before its own health insurance, unemployment insurance, accident insurance and holiday pay. If you are comparing a Finnish offer with one from a country where pensions are mostly private, remember that the employer share here is more than double yours, and it builds most of your statutory pension.
If you came from abroad
Anyone working for a Finnish employer is normally insured under TyEL from the first payslip, and the pension earned is paid abroad later if you move away. If you were posted to Finland by a foreign employer and stay in your home country’s scheme, different rules can apply; the pension provider, not Vero, decides. Health insurance contributions are a separate matter, covered on the health insurance contributions page.