Entrepreneur: How does YEL insurance protect you if you become unemployed?
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Many entrepreneurs wonder how daily allowances are calculated for the self-employed. The amount of earned income confirmed under YEL insurance affects the amount of unemployment benefit. It is important to keep your YEL earned income at the right level throughout your career.
Heta Virkki, Development Manager at Elo, explains how earned income under YEL insurance affects an entrepreneur’s unemployment security.
Meeting the employment condition is a prerequisite for daily allowance
The amount of earned income confirmed under YEL insurance affects whether an entrepreneur is entitled to unemployment benefit. An entrepreneur is entitled to earnings-related allowance paid by the unemployment fund (Entrepreneur Fund) if they meet the employment condition. The employment condition is met if the entrepreneur’s YEL earned income is at least EUR 15,481 in 2026 and they have worked as an entrepreneur for at least 15 months during the 48 months preceding unemployment. If the entrepreneur is not a member of the entrepreneurs’ unemployment fund, they may receive means-tested general support from Kela. Means-testing means that capital income and other income affect the amount of the support. Receiving general support does not require meeting the employment condition.
“An entrepreneur cannot join the unemployment fund, i.e. the Entrepreneur Fund, with earned income below EUR 15,481. In addition, members of the unemployment fund must themselves ensure that the earned income reported to the fund is up to date. You cannot report higher earned income to the unemployment fund than the confirmed earned income under your YEL insurance,” says Virkki.
YEL earned income directly affects the amount of unemployment security
The amount of earnings-related allowance paid by the unemployment fund is based on the entrepreneur’s confirmed YEL earned income. The general support paid by Kela is not tied to the amount of YEL earned income. As a rule, the earnings-related allowance for members of the unemployment fund is calculated based on the YEL earned income the entrepreneur has had for the 15 months preceding unemployment.
“This is why it is advisable to keep your YEL earned income at the correct level continuously. It is difficult to affect the amount of earnings-related allowance by changing your earned income just before unemployment. It is worth remembering that earned income must correspond to the entrepreneur’s actual work input. The YEL insurance contribution is calculated directly from the earned income, and YEL earned income cannot be changed retroactively. In addition, for the employment condition to be met, earned income must be at least EUR 15,481 per year,” Virkki advises.
Example calculation of earnings-related allowance for an unemployment fund member who meets the employment condition:
- With annual earned income of EUR 15,481, the estimated earnings-related allowance is about EUR 1,021 per month.
- With annual earned income of EUR 24,000, the estimated earnings-related allowance is about EUR 1,400 per month.
- With annual earned income of EUR 48,000, the estimated earnings-related allowance is about EUR 2,124 per month.
The amount of general support paid by Kela is the same regardless of YEL earned income.
The easiest way to update YEL earned income is in Elo’s online service. It is advisable to update your earned income as soon as it becomes relevant, as the change cannot be made retroactively.