YEL and TyEL in a nutshell – What Every Entrepreneur and Employer Needs to Know

3.7.2025 / Article

Pension insurance is an essential part of social security for both entrepreneurs and employees. In Finland, entrepreneurs are insured under YEL insurance (Self-Employed Persons' Pensions Act) and employees under TyEL insurance (Employees Pensions Act). While both systems secure pension and other social security benefits, they differ significantly in terms of who takes out the insurance, what it costs, and how it affects the security of the entrepreneur or employee.

1. Insurer – Who Takes Out the Insurance?

YEL: The entrepreneur is responsible for taking out and paying for their own YEL insurance.

TyEL: The employer is responsible for insuring the employee under TyEL insurance and pays the insurance premium, part of which is deducted from the employee's salary.

2. Basis of Insurance – What amount is Insured?

YEL insurance is based on the YEL income, which is assessed according to what should be paid to an employee for equivalent work. The YEL income directly affects the amount of the entrepreneur’s pension, sickness allowance, parental allowance, and unemployment security.

TyEL insurance is based on the employee's actual salary, which is reported with the payroll.

3. Payments – How Much Does the Insurance Cost?

YEL payment is determined based on the confirmed YEL income and is paid by the entrepreneur. In the first 4 years the payment is reduced by 22%.

TyEL payment is shared between the employer and the employee. The employer pays about 75%, and the rest is deducted from the employee's salary.

4. Compulsory – When Must the Insurance be Taken?

YEL is compulsory when the entrepreneur:

is 18–67 years old
works in their own company
the estimated YEL income exceeds the annually confirmed limit (in 2025, the limit is 9,208.43 €)
the activity lasts at least 4 months

TyEL is compulsory when the employer:

pays the employee a salary of at least 70.08 € (in 2025)

the employee is at least 17 years old.

5. Coverage – What Does the Insurance Cover?

Both insurances accumulate pension and provide security:

old-age pension
disability pension
family pension
Kela benefits: parental allowances, sickness allowances, and unemployment security. For entrepreneurs, these are affected by YEL income, while for employees, they are affected by salary.

Summary: Key information about YEL and TyEL

table of yel and tyel insurances

Remember: Properly Assessed YEL Income = Secured Future

YEL insurance is not just a pension obligation; its YEL income level directly affects the entrepreneur's security in life now and in the future. Incorrectly assessed YEL income can significantly weaken allowances and pensions.

Do you need help assessing YEL income or insuring under TyEL?

Take TyEL insurance