What is YEL?

Self-employed person’s pension insurance (YEL) is the foundation of pension and social security for entrepreneurs and self-employed persons.

It is a statutory insurance that cannot be replaced with voluntary pension insurances. Users of invoicing services, i.e. 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 fulfills the demands of the YEL insurance.

To whom is the YEL insurance mandatory?

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

  • Your work does not occur in employment or in a public service employment relationship. In other words you work for e.g., through an invoicing service.
  • You are 18-67 years old (the insurance liability for persons born in 1957 or earlier is valid until the end of the month of them turning 68, persons born in 1958-61 (the last month of them turning 69, or anyone younger, the last month of them turning 70)
  • You have been self-employed for at least four months.
  • Your YEL-income is at least 7 958,99 € in 2020.

Therefore, if your estimated earned income from self-employed work exceeds 7 958,99 € (in 2020), the YEL insurance is mandatory for you.

When do I need to take out the statutory YEL insurance?

You need to take out the YEL insurance no later than six months after the conditions for the statutory YEL insurance have been met. You can authorize Eezy to take out the insurance for you from the work pension company Elo, or you can take out the insurance yourself from a work pension insurance company or a pension register, if there is one available for your field of work.

Taking care of the insurance in a timely manner is essential to avoid receiving a negligence fee, which may be added to your insurance payment.

How do I estimate my yearly income?

The YEL insurance payment is based on your own estimation for your income. You can, however adjust the estimation amount.

By law, the work income according to YEL must correspond with your work input, therefore should be the same as the salary you would pay to another individual for the same work. Therefore, your income is not directly based on the result of your self-employment activity or taxable income.

Your income is an estimation for the value of your work input, however with light entrepreneurship, incomes often coincide with a gross salary for entrepreneurial activity. Salaries received through means of light entrepreneurship, freelancing, being a sole trader or any work not completed through permanent contractual employment are viewed as “entrepreneurial income” and apply to the YEL insurance.  More information about estimating your work income (only in Finnish).

YEL insurance payments

Your YEL insurance payment is based on your estimated work income and it is entirely tax deductible.

Insurance payments for 2019:

  • For those aged 18-52, the contribution is 24.10 % of the confirmed YEL income.
  • For those aged 53-62, the contribution is 25.60 % of the confirmed YEL income.
  • For those aged 63 and older, the contribution is 24.10 % of the YEL income as of the beginning of the year following the year in which the individual turns 63.

Discount for new entrepreneurs

A light entrepreneur taking out the YEL insurance for the first time will receive a 22% discount on the insurance payment for the first 48 months of activity. Read more about discount for new entrepreneurs.

Social security and self-employment

As a YEL insured light entrepreneur your social security is determined the same way as entrepreneurs who have a business ID/registered company, which means it is mainly based on your estimated YEL income. Your YEL income defines how much you would receive as:

  • Sickness allowance
  • Maternity, paternity or parental allowance
  • Unemployment benefits/allowances

You can check how your estimated earned income affects your social security using the Elo’s YEL calculator.

Unemployment and YEL

As a YEL insured person, you have the chance on becoming a member of SYT – Suomen yrittäjäin työttömyyskassa. To be covered for unemployment, your confirmed YEL work income must be at least 13 076 € annually.

As an SYT member you are entitled to an earnings-adjusted unemployment allowance after ending your entrepreneurial activity, providing all conditions for the earnings-related allowance are met. More information about the SYT membership (in Finnish).

If you are not a member of an unemployment fund or the conditions for earnings-related unemployment allowances are not met, you can receive a daily allowance providing work requirements are met. If you work entrepreneurially part-time, you may have a right to receive adjusted unemployment benefits. If you work full-time, you can still join an unemployment fund.

From an employee fund to an entrepreneur’s fund — a chance for continuous unemployment security

If you are a member of an employee fund, you have the right to receive continuous unemployment security, providing you become a member of the SYT fund within three months of starting your entrepreneurial activity and within a month of resigning from the previous fund you were a member of.

For more information about continuous unemployment security, please visit SYT’s website (in Finnish).

More information about the YEL insurance, please visit the Eläketurvakeskus website.

You can check your own pension accumulation from Työeläke.fi.

YEL insurance and tax deduction

The YEL insurance payments are tax deductible. You can find more information on how to mark your deductions on your tax return form from the Tax Administration website.

Voluntary pension insurance

If your estimated work income does not exceed the minimum YEL limit (7 958,99 € in 2020), YEL insurance is not mandatory for you. You can still take out a voluntary pension insurance with a lower income limit. Voluntary pension insurance cannot be acquired retroactively.
More information about voluntary pension insurance.

EEZY AND WORK PENSION INSURANCE COMPANY ELO AT YOUR SERVICE

We have made YEL insuring as easy as possible and you can take care of your YEL insurance matters with the pension insurance company Elo through Eezy.

This is how the YEL insurance is done through Eezy:

TAKING OUT THE INSURANCE

You are taking out the YEL insurance through Eezy’s online platform service from the work pension company Elo and accumulating funds for your YEL payments through your customer asset account. This means, we will withhold the YEL portion of your salary and transfer it to your customer asset account.

WE WILL PAY THE INSURANCE INVOICE

Once we receive your YEL invoice, we will pay the invoice with the funds you have accumulated. This helps you save up in advance for upcoming insurance payments and avoid all unpleasant surprises.

WE WILL KEEP YOU UPDATED

We will inform you in advance what your invoice total is and what funds you have accumulated so far. If there aren’t enough funds accumulated once the invoice arrives, you will receive clear instructions on how to pay the remaining balance yourself.

YEL PAYMENTS DIRECTLY FROM YOUR SALARY

If there are more funds in your customer asset account than the amount shown on the invoice, you can either leave the extra funds in your account to put towards your next payment or we can transfer the funds directly to you. The processing time for transfers are approximately two business days.

UPDATE YOUR INFORMATION EASILY

You can easily update your insurance information through Extranet. You can also  terminate your insurance at any time as well as withdraw your accumulated funds from your customer asset accoun.

Do you need help?

We will gladly assist you with any questions about the YEL insurance or unemployment benefits. You can contact our customer service by phone, email, or even through chat.