Changes in entrepreneurial activities and TyEL
Changes in entrepreneurial activities, M&As and corporate restructurings can change your company’s TyEL insurance and insurance contributions. The impacts are different depending on whether you are a small or a large employer based on your company’s size.
Most frequent change situations
The following situations involve changes in your entrepreneurial activities that affect your TyEL insurance:
- You sell all or part of your company’s shares.
- Your company merges into another company or vice versa.
- You transfer your company’s business to another company or vice versa.
- Your company demerges or you receive part of a demerging company’s business.
- You change your company’s legal form.
- You change your entrepreneurial activities so that they become subject to the Employees Pensions Act (TyEL).
When a change takes place in your entrepreneurial activities
When your entrepreneurial activities change, your company’s TyEL insurance and contribution may also change. Whether they change or not depends on whether you are a small or a large employer. Which one you are depends on your company’s annual payroll and whether it exceeds the so-called large employer limit. In 2024 you are a large employer if your company payroll exceeded EUR 2,251,500 in 2022. If your company payroll in 2022 was less than EUR 2,251,500, you are a small employer. Salary limits for a large employer vary from year to year.
As a small employer, your TyEL contribution is the size of the basic contribution and your contribution is reduced by the client bonus which is distributed once a year. If you are a large employer, your contribution is affected by the contribution category, which is determined based on your employees’ disability pensions. As a large employer you receive other discounts in addition to the client bonus.
The way a merger impacts your TyEL insurance depends on the type of merger: a normal merger or a combination merger. In a normal merger, a company merges into another company. In a combination merger, at least two companies merge into one new company. The operations of the merging companies end with the merger.
Impact on TyEL insurance
If your company merges into another company, your company’s TyEL insurance ends.
Normal merger
If you are the receiving company in a normal merger, you will insure the transferring employees under TyEL insurance. You can add them to your existing insurance or take out new insurance for them.
Combination merger
The new company created in a combination merger will take out TyEL insurance or, if it wishes, several insurances for its employees.
Read more about terminating TyEL insurance >
Take out TyEL insurance >
Impact on administrative cost
If your company merges with another company, we will take the change into account in your administrative cost calculation immediately from the start of the merger month, provided that we have been informed of the change. Calculation of the administrative cost takes into consideration whether you are part of a group.
Impact on discounts
If you receive another company through a merger and you both have TyEL insurance with Ilmarinen, we will factor in the merging company’s payroll history when calculating your discounts. As the receiving company, you will benefit from the merging company’s discounts in the form of client bonuses. The change will also be taken account as an increasing factor when calculating your contribution loss discount.
Read more about client bonuses >
Read more about contribution loss discount >
Impact on the contribution category
In a merger, the disability history of the merging company will be factored in when calculating the receiving company’s contribution category.
Normal merger
If you are a small employer and you receive another small employer company in a merger, your company may become a large employer as a result of the merger. This is the case if the annual payroll of your company created in the merger exceeds the so-called large employer limit. Beyond that limit the contribution category will affect the TyEL insurance contribution of your company created in the merger. For the first years, your company’s contribution category will be the base category 4. Thereafter, your company’s disability and partial disability pensions start to affect the contribution category.
If you are a large employer and you receive a small employer company in a merger, the disability pension cases during the small employer period do not affect your company’s contribution category.
If you are a large employer and you receive another large employer company in a merger, both of your disability pension histories affect your company’s contribution category.
Combination merger
If your company created in a combination merger is a large employer and the merging companies are large employers, the disability pension histories of all of the companies affect the contribution category of your company created in the merger. In that case, the disability pension cases of all the companies participating in the merger will be added together and these total disability cases will determine your new company’s contribution category.
If your company created in a combination merger is a large employer, but the merging companies are small employers, the contribution category only starts to apply to pensions granted after the merger. Until then, your company’s contribution category will be the base category 4.
Read more about the contribution category >
Impact on company size
Your company’s size affects the extent to which your company’s contribution category impacts your TyEL insurance contribution. For the purposes of pension insurance, size is determined by the annual payroll.
Normal merger
If you are a large employer and you receive, in a merger, a company whose annual payroll is at least some EUR 1.7 million in 2025, the impact of your company’s contribution category increases by as much as the payroll increases.
Combination merger
You will be informed of the contribution category and TyEL insurance contribution of the company created in the merger once you have taken out TyEL insurance.
Read more about the contribution category’s impact on the TyEL insurance contribution >
Impact of the transaction’s timing on the insurance contribution
Normal merger
If another company merges into your company partway through the year, the merger will have an impact on your company’s TyEL insurance contribution in the following year. If the merger takes place at the start of the year, it will affect the same year’s insurance contribution. Your administrative cost calculation will be updated immediately at the start of the merger month.
Combination merger
Take out TyEL insurance for the new company. Your insurance contribution will be up to date from the very beginning of the insurance.
In a business transfer, you transfer part or all of your company’s business to another company, or you are the receiving party.
In a complete transfer of business, your company’s operations end and the business is transferred in full to an existing or a new company to be established. In a partial transfer of business, part of your company’s operations transfer to an existing or a new company to be established. The remaining part of your company will continue its operations.
Impact on TyEL insurance
Complete transfer of business
If you are a transferor in a complete transfer of business, your TyEL insurance ends.
If you are the receiving company, you will insure the transferring employees under TyEL insurance. You can add them to your existing insurance or take out new insurance for them.
If you are establishing a new company in a complete transfer of business, take out new TyEL insurance or, if you wish, several insurances for it.
Partial transfer of business
If a partial transfer of business takes place between two companies, there is no need to terminate the insurances in force. If you are the receiving company, you must insure the transferring employees under TyEL insurance. You can add them to your existing insurance or take out new insurance for them.
If a new company is created in a partial transfer of business, take out new TyEL insurance or, if you wish, several insurances for the transferring employees.
Take out TyEL insurance >
Read more about TyEL insurance >
Impact on administrative cost
If you are a transferor or a transferee in a transfer of business, we will take the change into account in your administrative cost calculation immediately from the start of the business transfer month, provided that we have been informed of the change. Calculation of the administrative cost takes into consideration whether you are part of a group.
Impact on discounts
Complete transfer of business
In some cases, the payroll history of the transferor company can be taken into account when calculating the discounts of the receiving company. As the receiving company, you will benefit from the transferor company’s discounts in the form of client bonuses. The change will also be taken account as an increasing factor when calculating your contribution loss discount.
Partial transfer of business
If you are a transferor or a receiving party in a partial transfer of business, the transaction will also affect the client bonus and other discounts that your company receives.
Read more about client bonuses >
Read more about the contribution loss discount >
Impact on the contribution category
Minor business transfers have no impact on your company’s contribution category. The calculation of your contribution category changes if the business transferred or received represents a payroll amount that exceeds the payroll limit for large employers.
Complete transfer of business
If you are the receiving party in a complete transfer of business where the transferor company’s disability history is factored in when calculating your company’s contribution category, the disability pension cases of the transferor company will directly affect your contribution category. An exception to this are the years in which the transferor company was a small employer. For those years, the transferor company’s disability pension cases do not affect the receiving company’s contribution category.
If the disability history is not factored in when calculating your contribution category, your contribution category is determined in the same manner as in a partial transfer of business.
Partial transfer of business
If you are a receiving party in a partial transfer of business, the transferor company’s contribution category will affect the calculation of your contribution category. The disability history will remain with the transferor company. As a receiving company, your contribution category will be affected by two other things: the transferor company’s contribution category and the annual payroll of the employees transferring to your company. These add up to the so-called calculated disability pension expenditure. It will affect your company’s contribution category during a transitional period of 6–7 years.
Read more about the contribution category >
Impact on company size
When you receive business from another company, the transferor company’s payroll may affect the size of your company. For the purposes of pension insurance, size is determined in terms of payroll, and the size has an impact on how much weight is given to the contribution category.
If a new company is established in a complete or partial transfer of business, you will be informed of your TyEL contribution once you have taken out TyEL insurance. Your insurance contribution will be up to date from the very beginning of the insurance.
Complete transfer of business
If you are a large employer and you receive a company whose annual payroll is at least some EUR 1.7 million in 2025, the impact of your company’s contribution category increases by as much as the payroll increases.
Partial transfer of business
The transaction affects the size of both companies, if your or the transferor company’s annual payroll changes by at least some EUR 1.7 million in 2025.
Read more about the impact of the payroll on the contribution category >
Impact of the transaction’s timing on the insurance contribution
If you are a large employer and you are the receiving party in a business transfer partway through the year, the transaction will only have an impact on both of your companies’ TyEL insurance contributions as of the beginning of the following year. If the business transfer takes place at the turn of the year, the transaction will affect both of your TyEL insurance contributions that same year. Your administrative cost calculation will be updated immediately at the start of the business transfer month.
If you establish a new company or several new companies in a business transfer, the TyEL contributions of these companies will be up to date from the very beginning of the insurance.
Your company may demerge completely or partially or you can be a receiving party in the transaction.
In a complete demerger, your company demerges into two or more, possibly new, companies and the operations of the demerging company end. In a partial demerger, part of your company’s business transfers to one or more, possibly new, companies and the remaining part of your company continues its operations.
Impact on TyEL insurance
Complete demerger
If your company demerges completely, your TyEL insurance ends.
As a receiving party in a complete demerger, you will insure the transferring employees under TyEL insurance. You can add them to your existing insurance or take out new insurance for them.
If you are establishing a new company in a complete demerger, take out new TyEL insurance or, if you wish, several insurances for it.
Partial demerger
If your company demerges partially, your company will continue its operations in a reduced form and your TyEL insurance will continue.
If a partial demerger takes place between two companies, there is no need to terminate the insurances in force. If you are the receiving company, you must insure the transferring employees under TyEL insurance. You can add them to your existing insurance or take out new insurance for them.
The new company created in a partial demerger will take out TyEL insurance or, if it wishes, several insurances for its employees.
Read more about terminating TyEL insurance >
Take out TyEL insurance >
Impact on administrative cost
If you are a demerging party or a receiving party in a demerger, we will take the change into account in your administrative cost calculation immediately from the start of the demerger month, provided that we have been informed of the change. Calculation of the administrative cost component takes into consideration whether you are part of a group.
Impact on discounts
Complete demerger
In some cases, the payroll history of the demerging company can be taken into account when calculating the discounts of the receiving company. As the receiving company, you will benefit from the demerging company’s discounts in the form of client bonuses. The change will also be taken account when calculating your contribution loss discount.
Partial demerger
If you are a demerging party or a receiving party in a partial demerger, the transaction will also affect the client bonus and other discounts that your company receives.
Read more about client bonuses >
Read more about the contribution loss discount >
Impact on the contribution category
Minor demergers have no impact on your company’s contribution category. The calculation of your contribution category changes if the demerger changes your company’s size at least by a payroll amount that exceeds the payroll limit for large employers.
Complete demerger
If you are a receiving party in a complete demerger where the demerging company’s disability history is factored in when calculating your company’s contribution category, the disability pension cases of the demerging company will directly affect your contribution category. An exception to this are the years in which the demerging company was a small employer. For those years, the demerging company’s disability pension cases do not affect the receiving company’s contribution category.
If the disability history is not factored in when calculating your contribution category, your contribution category is determined in the same manner as in a partial demerger.
Partial demerger
If you are a large employer and you a receiving party in a partial demerger, the demerging company’s contribution category will affect the calculation of your contribution category. The disability history will remain with the demerging company. As a receiving company, your contribution category will be affected by two other things: the demerging company’s contribution category and the annual payroll of the employees transferring to your company. These add up to the so-called calculated disability pension expenditure. It will affect the receiving company’s contribution category during a transitional period of 6–7 years.
Read more about the contribution category >
Impact on company size
When you receive business from another company in a demerger, the demerging company’s payroll may affect the size of your company. For the purposes of pension insurance, size is determined in terms of payroll, and the size has an impact on how much weight is given to the contribution category.
If a new company is established in a complete or partial demerger, you will be informed of your TyEL contribution once you have taken out TyEL insurance. Your insurance contribution will be up to date from the very beginning of the insurance.
Complete demerger
If you are a large employer and you receive, in a demerger, a company whose annual payroll is at least some EUR 1.7 million in 2025, the impact of your company’s contribution category increases by as much as the payroll increases.
Partial demerger
The transaction affects the size of both companies, if your or the transferor company’s annual payroll changes by at least some EUR 1.7 million in 2025.
Read more about the impact of the payroll on the contribution category >
Impact of the transaction’s timing on the insurance contribution
If you receive business from another company in a demerger partway through the year, the transaction will not impact both of your companies’ TyEL insurance contributions until from the beginning of the following year. If the demerger takes place at the start of the year, the transaction will affect both parties’ TyEL insurance contributions that same year. The calculation of your administrative cost is updated immediately at the beginning of the demerger month.
If you establish a new company or several new companies in the demerger, the TyEL contributions of these companies will be up to date from the very beginning of the insurance.
You change your company’s legal form if, for example, you switch from operating as a sole trader or a general partnership or a limited partnership over to operating as a limited liability company.
How the change of company form will affect your TyEL insurance depends on whether your company’s business ID changes in connection with the change.
Changing your company form usually does not affect your TyEL contribution or the amount of administrative cost.
Impact on TyEL insurance
If you operate as a sole trader and your self-employment will continue in the form of, for example, a limited liability company, a general partnership or a limited partnership, terminate your TyEL insurance. Following the change, your company’s business ID will change. In that case, take out new TyEL insurance for the employees of your new company.
If you make a change after which your company’s operations will continue with the same business ID, you can keep your TyEL insurance in force. If you have taken out YEL insurance for yourself, check if any changes are required.
Impact on discounts
When calculating your new company’s discounts, it is possible, in some cases, to take into account the previous company’s payroll history.
You may have earlier insured your employees under another pension insurance act. For example, your company form may have changed so that your new company form is subject to the Employees Pensions Act, i.e. TyEL.
Impact on TyEL insurance
If your pension act changes, take out TyEL insurance for your employees.
Impact on pension contribution and discounts
In the years after taking TyEL insurance, you may still receive contributions under the pension act that applied to you previously. This can be the case, for example, when you transfer to TyEL from the pension act governing public sector pensions.
When you have taken out TyEL insurance, we will pay you client bonuses and, as a large employer, you will also be granted a reduction for large payrolls and a contribution loss discount. You will receive the client bonus once a year. You will receive your first client bonus and reduction for large payrolls for the TyEL contribution that concerns the year after your insurance entered into force. The discount for contribution loss will be granted to you immediately once your insurance has entered into force.
Your administrative cost will be calculated from the start of your customer relationship on a monthly basis in real time based on your payroll and the number of employees.
As a large employer, your company’s contribution category for the first years will be the base category 4. Thereafter, your company’s disability and partial disability pensions will start to affect the contribution category.
Take out TyEL insurance >
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Impact on premium lending
The changes in your entrepreneurial activities can affect the amount of TyEL contributions that you can take out as premium loans.
Read more about premium loans -
Impact on earnings reports submitted to the Incomes Register
The changes in your entrepreneurial activities affect the way you report earnings to the Incomes Register. As a receiving party, you must make sure that you report the transferring employees’ earnings data under your own insurance policy number as of the date when the change in the entrepreneurial activities occurred.
Take a look at the Incomes Register’s detailed guidance on reporting earnings in restructuring situations (vero.fi) -
Manage your insurance matters conveniently in our online service
In our online service, you can manage your company’s TyEL insurance and view your company’s insurance contributions and information related to the contribution category when it best suits you.
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For more information, contact our customer service and your contact person
If you need more information about what to do when your entrepreneurial activities change, contact our customer service or your contact person. We will look into your overall restructuring situation together and how it affects your TyEL insurance. That ensures that your insurance contribution and discounts are up to date, and you will not need to correct the insurance contribution afterwards.
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