Self-employed person’s pension insurance (YEL) is the pension and social security base for entrepreneurs and self-employed persons. YEL secures your income during different situations in life already a lot before pension. It is statutory insurance which cannot be replaced by supplementary pension insurances.

YEL contributions are based on estimated earned income and the contributions are tax deductible in total. The insurance contribution in 2019 from the confirmed YEL-income is 24,1 percent for persons under 53 and over 62, and 25,6 percent for 53-62 years old.

If you are becoming an entrepreneur for the first time, you will get a reduction for the first 48 months. The reduction is 22% reduction on your YEL contributions.

YEL-insurance is mandatory once the conditions set by the law are fulfilled:

  • Your work does not occur in employment or public service employment relationship, in other words you work, e.g., through invoicing service.
  • You are 18-67 years old (The insurance liability for persons born 1957 or earlier is for the end of the month when they turn 68, and persons born 1958-61 the last month when they turn 69, or younger the last month when they turn 70)
  • You have been self-employed for at least 4 months.
  • Your YEL-income is at least at EUR 7 799,37 in 2019.

So, if your estimated earned income from the self-employed work exceeds 7 799,37 € in 2019, the YEL insurance is statutory. YEL-income is everything which is earned through self-employment, the total amount of earned through invoicing services and self-employment despite whether your work is full or part-time.

If your work income does not exceed the mandatory limit (7 799,37 annually), you still can have voluntary pension insurance. This does not mean supplementary pension insurance.

You have to acquire YEL-insurance within six months once the conditions for statutory YEL-insurance are fulfilled.

We recommend to acquire the insurance on time because in case you acquire the insurance late, a penalty payment is added to your insurance contribution.

If your work income does not exceed the mandatory limit (7 799,37 annually), you still can have voluntary pension insurance. This does not mean supplementary pension insurance.

Voluntary pension insurance cannot be acquired retroactively so if you want to accrue pension contiguously make sure that you acquire the voluntary pension insurance right from 1.5.2017.

More information regarding voluntary pension insurance

By the decision of Finnish Centre for Pensions all persons working through invoicing service are classified as entrepreneurs since 1.5.2017 in terms of pension insurance. It means that you are liable to arrange your pension insurance.

The Self-employed person’s pension insurance is required to have within six months since the work started. You can authorise Eezy to acquire the insurance from the company you choose or you can acquire the insurance directly from the insurance company or pension fund if there is one in your business sector.

We strive to make the pension insurance system as easy as possible for you also in the future. You can authorise Eezy to acquire the pension insurance on your behalf. It is possible in extranet (My profile -> YEL-insurance)

Depending on your annual work income you can choose statutory or voluntary pension insurance. In the same time you can choose in how many instalments you want to have the contributions.

The contribution invoices you will receive to your notified address and you are responsible for paying the contributions. Pension insurance contributions are tax deductible in total.

If you are becoming an entrepreneur for the first time, you will get a reduction for the first 48 months. The reduction is 22% reduction on your YEL contributions.

If you have had a pension insurance earlier but it starter after 1.1.2001 and you still have reduction months left, you have right to have the reduction also for the second pension insurance. For the third pension insurance the reductions is not acceptable even though the total time is under 48 months.

Pension insurance companies follow the amount of reduction months and take care that you will receive the respective reductions.

Pension contributions are based on your estimated earned income. You can influence on the insurance contributions and thus your net salary.

According to law, earned income means an amount that corresponds to the actual value of your work. Earned income is not directly based on your profit or taxable income.

So earned income includes all earning received through entrepreneurially conducted work. This means all earnings from different invoicing services, self-employment or freelancer.

More about estimating your earned income

As a Self-Employed person’s pension insured person your social security is determined in the same basis as entrepreneurs, thus it is based on estimated earned income.

Benefits based on your estimated earned income:

  • Sickness allowance
  • Maternity and paternity allowances and parental allowance
  • Your unemployment security

If you work full-time and work entrepreneurially only part-time, you can still be a member of unemployment fund.

In Varma’s website you can check how estimated earned income effect your social security and insurance contributions.

As a Self-Employed person’s pension insured person you have a chance to become a member of The Unemployment Fund for Entrepreneurs and the Self-Employed (AYT) or Suomen Yrittäjäin Työttömyyskassan  (SYT). To be covered by unemployment, your confirmed income must be at least 12 816 € annually.

As a AYT or SYT member you have right to earnings-related unemployment allowances if other conditions for allowance are fulfilled.

More information about AYT membership

AYT brochure

If you are not a member of unemployment fund or the conditions for earnings-related unemployment allowances are not fulfilled you can receive daily allowance if work requirement are met.

If your entrepreneurial work is part-time, you may have a right to receive adjusted unemployment benefit.

If you work full-time and work entrepreneurially only part-time, you can still be a member of unemployment fund.

If you are a member of employee fund, you have a chance to uninterruptible unemployment security if you become a member of SYT or AYT fund within three months since the start of entrepreneurial work and within a month from resigning the previous fund.

More information about the topic in AYT’s website

General information can be found in Finnish Centre for Pensions website

Your own pension accumulation can be checked in työeläke.fi website

Pension Insurance companies:

Elo

Etera

Ilmarinen

Varma

Veritas

YEL-insurance

Self-employed person’s pension insurance system which covers also persons working through invoicing services since 1.5.2017.

Annual income

The total income received through self-employment or entrepreneurial work (Work done through invoicing services, self-employment, freelance, limited liability company, etc.)

YEL-income (Estimated earned income)

Estimate your annual work input. It does not have to be the same as confirmed income but according to the law the work input must correspond the same as paid in similar work.

YEL-income is the base for your insurance contributions, accumulating pension but also to social and unemployment security.

Voluntary pension insurance

Even your work income does not exceed the mandatory limit, you still can have voluntary pension insurance. This does not mean supplementary pension insurance

Reduction for new entrepreneurs

You can have 22% reduction on your insurance contributions for the first 48 months.

YEL contributions rate by age group (% of YEL-income)

YEL contribution rate by age group(% of yel-income)
18–52 years24,1 %
53–62 years25,6 %
63–24,1 %

(The contribution rate changes in the start of next year when the person turns 63)

Examples of the YEL contributions by different YEL-income

YEL-IncomeYEL-Contribution (24,10–25,60 % of yel-income)contribution with the new entrepreneurs reduction (22 % reduction)
7 799,37€1 879,65–1996,64 €1 466,13–1 557,38 €
12 816,00 €3 088,66–3 280,90 €2 409,15–2 559,10 €
20 000 €4 820–5 120 €3 759,60–3 993,60 €
30 000 €7 230–7 680 €5639,40–5 990,40 €

YEL-levels

 EUROs / Year
YEL-income lower limit7 799,37 €
YEL-income upper limit177 125 €
Possibility for unemployment benefits, if YEL-income at least12 816,00 €