YEL insurance

YEL insurance, i.e. entrepreneur’s employment pension insurance

The YEL insurance is the basis of pension and social security for entrepreneurs and self-employed people. It is a statutory insurance policy that cannot be replaced by voluntary pension insurance. Light entrepreneurs are classified as entrepreneurs for pension insurance purposes. This means that you are responsible for arranging your own pension insurance with the YEL insurance if your entrepreneurial activity meets the conditions for the YEL insurance.

Eezy and the employment pension company Elo at your service

We have made the YEL insurance as uncomplicated as possible, and with our free additional service, you can conveniently manage the YEL insurance through Eezy from the employment pension company Elo.

The fact that you take out the YEL insurance through our online service and we take care of YEL insurance invoices for you does not cost you anything extra but is part of our basic service. The employment pension company Elo determines the YEL insurance payments on an individual basis. 

This is how light entrepreneur’s YEL insurance is handled through Eezy 

  1. Acquire insurance.
    In practice, you take out the YEL insurance through Eezy’s online service from the employment pension company Elo and accumulate money for YEL payments to your customer asset account. This means that we will transfer the YEL’s share of your salary to your customer asset account.
  2. We pay the insurance invoice.
    When the YEL invoice arrives to us, we will pay the invoice with the money you have accumulated. This will save you money for future insurance payments and save you from unpleasant surprises.
  3. We will keep you up to date.
    We will tell you in advance the amount of the invoice and at the same time the situation of your accumulated funds. If you have not accrued enough funds when the invoice arrives, you will receive clear instructions on how to pay the balance yourself.
  4. You save on YEL payments from your salary.
    If there are more funds on the invoice upon arrival than the total amount of the invoice, you can either leave the money waiting for the next invoice or we can transfer the extra money to you. The processing time for transferring money is about 2 working days.
  5. Update your information conveniently. You can conveniently update your insurance information through our online service and at any time also terminate the insurance and withdraw the accumulated funds from your customer asset account to yourself.

Who is required to take out the YEL insurance?

The YEL insurance for a light entrepreneur is mandatory when the following conditions for being covered by the Pensions Act are met.

  • From the point of view of pension insurance, your work does not take place in an employment or official relationship, in other words, you work, for example, as a light entrepreneur through an invoicing service.
  • You are aged between 18 and 67 (those born in 1957 or earlier are required to be insured until the end of the month in which they reach the age of 68; those born in 1958–61 when they turn 69, and all younger when they turn 70)
  • Your entrepreneurial activity has lasted four months and
  • your estimated earnings in 2021 are at least 8 063,57 € per year.
  • Therefore, if your estimated earnings from self-employment exceed the minimum YEL limit (8 063,57 € in 2021), the YEL insurance is mandatory for you.

When should YEL insurance be acquired? 

You must take out the YEL insurance no later than six months after the conditions for statutory YEL insurance are met. You can authorize Eezy to take out insurance on behalf of the employment pension company Elo, or you can take out insurance yourself from either an employment pension insurance company or a pension fund, if one operates in your industry.

It is a good idea to take care of your insurance on time, because if you take out insurance late, your default payment may be increased. 

How do I estimate my work income?

The YEL insurance payment is determined based on the annual earned income you estimate. However, you will be able to influence the amount of your YEL payment yourself and thus, the net salary left in your hand.

By law, income according to the YEL must correspond to your work input, i.e. a salary that, on average, corresponds to the compensation paid for the work in question. Thus, earned income is not solely based on the result of your entrepreneurial activity or taxed earned income.

Earned income is an estimate of the value of your labor input, but for light entrepreneurs, earned income often corresponds to at least the gross salary of entrepreneurial activity. All income earned as an entrepreneur is calculated as work income, i.e. in total, the income you have earned through various invoicing services, with a trade name, as a professional or as a freelancer. More information on income assessment can be found on the Employment Pensions Act website (in Finnish).

How much is the YEL payment?

YEL insurance payment is based on estimated earned income and is fully tax deductible.

YEL insurance payments in 2021

  • For 18–52-year-olds, the payment is 24.10 % of the confirmed YEL earnings.
  • For those aged 53–62, the payment is 25.60 % of the confirmed YEL earnings.
  • From the beginning of the year following the age of 63, the payment is 24.10 % of YEL earnings.

Start-up entrepreneur discount 

A light entrepreneur acquiring the YEL insurance for the first time will receive a 22 % discount on the insurance payment for the first 48 months of operation. Read more about the start-up entrepreneur discount.

Social security for YEL insured 

As an YEL-insured light entrepreneur, your social security is determined on the same basis as for entrepreneurs, i.e. it is mainly based on the estimated earnings of your YEL insurance. Your YEL earnings determine:

  • your sickness benefit
  • your maternity or paternity allowance and parental allowance
  • and your unemployment insurance.

With the employment pension company’s Elo YEL calculator, you can check how your estimated earnings affect your social security and insurance payments.

Unemployment insurance for YEL insured 

As an YEL insured, you have the opportunity to become a member of SYT, the Finnish Entrepreneurs’ Unemployment Insurance Fund. To be covered by unemployment insurance, the income on which your YEL insurance is based must be at least 13 247 € per year (2021). As a member of SYT, you are entitled to earnings-related daily allowance after you have stopped being an entrepreneur, if the other conditions of earnings-related daily allowance are met. More information on SYT membership (in Finnish).

If you are not a member of the unemployment fund or the conditions for receiving earnings-related daily allowance are not otherwise met, you can receive basic daily allowance if the employment condition is met. If your entrepreneurial activity is a side job, you may be able to receive an adjusted daily allowance. If you are in full-time employment and act as self-employed only part-time, you can still be a member of the Unemployment Insurance Fund.

From the salary earner’s fund to the entrepreneur’s fund – an opportunity for uninterrupted unemployment security 

If you are a member of a salary fund, you have the option of uninterrupted unemployment insurance if you become a member of the SYT fund within three months of starting an entrepreneurial activity and within one month of leaving the previous fund. 

More information on uninterrupted unemployment insurance is available on SYT’s website (in Finnish).

More information on YEL insurance in general can be found on the Finnish Centre for Pensions’ website.

You can check your own pension accumulation on Työeläke.fi website.

Voluntary YEL insurance 

If your estimated earnings over a 12-month period fall below the minimum YEL limit (8 063,57 € in 2021), the YEL insurance is not mandatory for you. However, if you wish, you can also take out voluntary YEL insurance with a lower income. The voluntary YEL insurance cannot be taken retroactively. Learn more about voluntary pension insurance

Be sure to deduct YEL payments in taxation

YEL insurance payments are tax deductible. You can find more detailed instructions on the Tax Administration’s website how to mark your deductions in your tax return.

Do you have any questions about YEL insurance?

The YEL insurance for a light entrepreneur should always be kept up to date and taken care of in a timely manner. Other important light entrepreneur insurances are already included in your service fee. If you are not sure whether the terms for acquiring the YEL insurance apply to you, please contact us by phone, email or even via chat. We advise you on all issues related to the YEL insurance and unemployment insurance.