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What is YEL income?

YEL income is an annual amount of earnings that is confirmed by the pension company for the purposes of calculating the earnings-related pension and insurance contributions of self-employed persons. YEL income is the monetary value of your work input in your own entrepreneurial activities. It should correspond to such wages or salary that should reasonably be paid if an equally competent employee was hired in your place, or to the compensation that otherwise can be considered as equivalent to your work input. For help in determining the YEL income, you can utilise, for example, the YEL income guide provided by the Finnish Centre for Pensions (in Finnish).

How is YEL income determined?

YEL income is the monetary value assigned to a self-employed person’s work input. It is not directly equivalent to the actual wages or salary drawn from the business but, rather, the overall value of the self-employed person’s work input. Self-employed persons can also, for example, withdraw capital income as compensation for their work input or receive other types of fringe benefits, so salary amounts do not tell the whole truth. On the other hand, self-employed persons may also be engaged in such forms of business in which salary payments, as such, are not applicable.  

When determining the YEL income, the pension company takes the following into account:

  • The number of working hours;
  • The turnover of the company;
  • The possible seasonal nature of the work; and
  • The number of other employees.

YEL income is always determined as an annual sum, which is estimated as corresponding to the self-employed person’s work input over a 12-month review period. In order to help determine the YEL income, it may be easier to first define the value of the work input on the monthly level and then multiply that amount by 12 for the annual sum.  

If you have entrepreneurial activities in more than one company, all of your entrepreneurial activities are insured under a single YEL policy. Your overall work input is taken into consideration in the YEL income amount. 

If changes occur in your business activities that affect the amount of your work input, the pension company must be notified of the change as soon as possible in order to enable the pension company to adjust your YEL income to the proper level. Such a change might be, for example, if your work becomes part-time or expands to full-time. Notifying Elo of any changes is easy using our Online Service. YEL income cannot be adjusted retroactively, so it’s important to notify us about any changes as quickly as possible. YEL income cannot be determined on the basis of the profitability of the business nor is it affected by temporary fluctuations in earnings, such as during a summer holiday taken by the entrepreneur.  

 

YEL income limits for the year 2021

  • Minimum for insuring €8,063.57 
  • Minimum for unemployment security €13,247.00  
  • Maximum for insuring €183,125.00

The minimum and maximum limits for YEL income are determined by law. Entrepreneurial activities that fall below the minimum limit are considered as not fulfilling the necessary conditions for YEL insurance. In order to meet the condition for previous employment, a self-employed person must have an income of at least the minimum as specified in the Unemployment Security Act (Työttömyysturvalaki 1290/2002). The same minimum income limit is also a condition for membership in the Yrittäjäkassa (unemployment fund for entrepreneurs). 

YEL income amounts and YEL income limits are automatically increased annually with the wage coefficient confirmed by the Ministry of Social Affairs and Health. The wage coefficient ensures that your income remains consistent with the general development of the salaries and price levels. No other automatic adjustments or changes are made to the YEL income, so, as a self-employed person, you will always need to notify us of any changes in the extent of your business activities or work input. The easiest way to notify us is through our Online Service > 

 

What is the impact of the YEL income amount?

YEL insurance is the most important insurance for self-employed persons, since the YEL income confirmed in the insurance policy serves as the basis of their social security. For this reason, it is essential that the YEL income level corresponds as closely as possible to the actual value of your work input.  

The YEL income amount is used to calculate, for example, the parental and sickness allowances paid by Kela as well as the level of your unemployment security. 

Learn more about the pension and social security of self-employed persons >
 

Try our YEL calculator

 Our YEL calculator enables you to easily check the impact of your YEL income on your future pension and social security. When you need YEL insurance, you can calculate the price of the insurance and compare the impacts of different payment methods on the insurance contributions. You can proceed directly from the YEL calculator to the insurance application form.
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