The new YEL income calculator helps self-employed persons to determine the correct level of their YEL income - 3 facts about the calculator

Elo has added a new YEL income calculator to its YEL insurance application form. The calculator generates a YEL income recommendation in order to help self-employed persons to determine the correct amount of their YEL income.

3 facts about the YEL income calculator

1. The calculator generates a YEL income recommendation
   
   The new YEL income calculator is a service maintained by the Finnish Centre for Pensions and utilised by all pension companies in Finland. The calculator makes use of Statistics Finland’s data on the median wages and turnover information in different fields. In addition to this data, the calculation of the YEL income recommendation is based on the field and turnover data provided by the self-employed person.
   
   
2. The pension insurance company confirms the YEL income suitable for the individual situation
   
   The YEL income recommendation given by the calculator helps the self-employed person and pension insurance company to determine the correct level of YEL income. The recommendation also serves as the basis for YEL income discussions between the self-employed person and the pension insurance company. The YEL income recommendation comes with a leeway that allows self-employed persons to set their YEL income at a level that is up to 30 per cent above or below the recommendation.
   
   If necessary, the self-employed person can deviate from the 30 per cent leeway for a justifiable reason. Justifiable reasons include, for example, the seasonal nature of the entrepreneurial activities and the salary of the highest paid employee. The final YEL income as deemed appropriate for each individual situation will be confirmed by the pension insurance company.
   
   
3. The definition of YEL income remains the same
   
   Earlier, the YEL income guide issued by the Finnish Centre for Pensions was used to help determine the proper YEL income level of self-employed persons. This guide is no longer in use but has been replaced by the new YEL income calculator. So, although the definition of YEL income has not changed, the method of determining the correct level has been updated to a modern, digital service.

YEL income serves as the foundation for the social security of self-employed persons

The YEL income level serves as the basis for all aspects of social security for the self-employed person, both throughout their years of entrepreneurial activity and during retirement. For this reason, it’s important to set the YEL income at the correct level right from the start of one's entrepreneurial activities.

The calculation service behind the YEL income recommendation provides a uniform basis for all YEL income determinations. This will assure that YEL income levels are set at the correct level, minimise the fluctuation between pension insurance companies and provide a more solid foundation for the social security of self-employed persons.

A reform of the YEL legislation is underway

The Finnish Parliament is currently discussing the amendment of the Self-Employed Persons Pension Act. A key aspect of the proposal for amendment is to clarify the determination of the YEL income that serves as the basis for the pension insurance of a self-employed person and to facilitate its regular review. The regular adjustments are intended to ensure that the YEL income remains at the correct level throughout the entire duration of entrepreneurial activities. The information provided by the self-employed person continues to be an essential aspect of the determination of the YEL income. This principle would not change under the new law.

Elo’s experts are valuable resources for self-employed persons

Elo's experts are available to help you to determine the correct level of YEL income and to assist with other pension insurance matters. You can reach us by phone at +358 (0)20 694 730 on weekdays from 8 a.m. to 5 p.m.

Read more about YEL insurance >
Take YEL insurance from Elo >