Insurance Obligation

An entrepreneur operating in Finland is considered to have a YEL insurance obligation if their activity meets the criteria for YEL insurance. The Finnish Centre for Pensions supervises the insurance of entrepreneurs. YEL insurance determines the YEL income, which forms the basis for YEL payments. The insurance must be taken out within six months from the start of entrepreneurial activity that meets the YEL conditions.

You must work in your business, as ownership alone does not require YEL insurance. Part-time entrepreneurs must also take entrepreneur's pension insurance if their activity meets the insurance requirements. If you work simultaneously as an employee, your employer pays the employee pension insurance contributions from your salary. In this case, you can be insured under both YEL and TyEL.

Your entrepreneurial activity continues for at least 4 months

You must work continuously for at least four months to meet the YEL insurance obligation. Seasonal entrepreneurial activity is also covered by the insurance when it continues year after year, even if there may be breaks of several months in between. For example, an entrepreneur running a kiosk during the summer can generally be considered to have continued their activity continuously from year to year.

Entrepreneur?

Is a person who conducts business activities at their own risk and for their own account. Responsible for business risks and decisions, aims for financial profit, works independently or employs others, and is not in an employment relationship with an employer, but operates in their own company.

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A sole trader, also known as a self-employed person, is insured under YEL when the other insurance conditions are met.

An entrepreneur is considered under YEL insurance in a limited company if they are a shareholder in a leading position who owns more than 30% of the shares or the voting rights alone, or together with family members owns more than 50% of the shares or the voting rights. All family members are thus covered by YEL if the joint ownership exceeds 50%. When calculating ownership, indirect ownership through other entities or partnerships is also considered.
Family members of shareholders who do not own any part of the company but work and receive a salary from the company are covered by TyEL insurance.

In YEL, a family member is defined as:
• The entrepreneur's spouse or partner living in the same household
• Children and parents living in the same household as the entrepreneur, and their spouses, as well as registered partners.
Siblings are not considered family members under YEL, even if they live in the same household.

In a leading position under YEL are typically:
• CEO, board members, business directors, and individuals with the right to sign for the company
• Members of the owner family working in small family businesses (regardless of formal position)
• Individuals who work in the company and effectively control the company's operations, even if they do not have a formal leading position in the company.

Limited Partnership
A general partner working in the company is considered an entrepreneur and is thus insured under YEL.
A silent partner working in the company and receiving a salary, as well as family members of the partners, should be insured under TyEL. If the individuals work without a salary, they are not required to be insured under TyEL or YEL.

General Partnership
A partner working in the company is considered an entrepreneur and should be insured under YEL.
If a family member of a partner works in the company and receives a salary, they are insured under TyEL. If the family member works without a salary, they are not required to be insured. An individual in a leading position who has more than 30% control alone or more than 50% control together with family members in the entity is insured under YEL.
Shareholders working in the company and receiving a salary, whose ownership falls below the percentages, are insured under TyEL. Similarly, family members of shareholders who work and receive a salary in the company are insured under TyEL. If they are not paid a salary, they are not insured under YEL or TyEL at all.

A general partner working in the company is considered an entrepreneur and is thus insured under YEL.
A silent partner working in the company and receiving a salary, as well as family members of the partners, should be insured under TyEL. If the individuals work without a salary, they are not required to be insured under TyEL or YEL.

A partner working in the company is considered an entrepreneur and should be insured under YEL.
If a family member of a partner works in the company and receives a salary, they are insured under TyEL. If the family member works without a salary, they are not required to be insured.

An individual in a leading position who has more than 30% control alone or more than 50% control together with family members in the entity is insured under YEL.
Shareholders working in the company and receiving a salary, whose ownership falls below the percentages, are insured under TyEL. Similarly, family members of shareholders who work and receive a salary in the company are insured under TyEL. If they are not paid a salary, they are not insured under YEL or TyEL at all.

Even working without a business ID, as a light entrepreneur or freelancer, you must take YEL insurance if the insurance conditions, such as work input, are otherwise met. Self-employed light entrepreneurs who invoice their clients through an invoicing service are thus

Determining YEL Income

Setting your income at the correct level is important, as it will be used to calculate your future pension and the insurance payment for your YEL insurance. In addition to the employment pension, YEL income also affects the level of various social benefits and pensions, so appropriate income provides you with security during and after your career.

As an entrepreneur, you should regularly update your YEL income according to changes in your entrepreneurial activity to ensure the correct pension accrual.

By using our YEL calculator, you can easily see how your YEL income affects your pension, insurance payments, and various social benefits, such as sickness allowance. The calculator also allows you to calculate recommended income by entering your industry and estimated turnover.

Timing of Taking Insurance

6-months to see how your business goes

You must take out YEL insurance within six months from the date your entrepreneurial activity meets the YEL insurance conditions. The start date of the insurance is always as the date when the conditions were met, even if you take the insurance retroactively after six months.
This means you can see your situation if you are unsure whether your activity will continue for more than four months. However, this six-month period does not exempt you from paying YEL contributions for that time.

Monthly level review

The annual income threshold of 9,423.09 € equals about 786 € per month. YEL insurance becomes relevant when your income exceeds this monthly amount (9,208.43€/year 768€/month in 2025).

Example

You started your entrepreneurial activity in September.
In December, you realize that from the perspective of your work input, your entrepreneurial activity has exceeded the threshold starting from October.
Other conditions for the entrepreneur's pension insurance are also met.
In this case, you must take the insurance retroactively from October 1st in December and also pay the YEL insurance payments starting from October.

The figures in the image below illustrate the monthly income of a starting entrepreneur.

Starting entrepreneur’s YEL income on a monthly basis

Retroactive Insurance

You can take insurance retroactively for the current and the three previous calendar years. Pension cannot be accrued for years older than that if the insurance was not taken.
Entrepreneur's pension insurance payments must be paid for the same period as the insurance is valid. It is important to note that retroactive insurance also generates retroactive insurance payments, which are billed at once unless otherwise agreed. Additionally, an extra fee may be charged for insurance taken more than six months late for the period of delay.

The Finnish Centre for Pensions Supervises Insurance

The Finnish Centre for Pensions supervises the insurance of entrepreneurs and annually sends a letter to entrepreneurs who are likely obligated to have YEL insurance but have not taken it for some reason. The letter urges the entrepreneur to assess their need for insurance. If you have received a supervision letter and are wondering whether you need YEL insurance, let us help.

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Part-time or Secondary Entrepreneurial Activity

Part-time or secondary entrepreneurs are also insured with YEL insurance if the insurance conditions are met. You need YEL insurance for your entrepreneurial activity, even if you are also employed elsewhere, where the employer pays TyEL insurance contributions. Both contribute to your employment pension.

Transitioning from full-time entrepreneurship to part-time may mean changes to your YEL insurance. If you start working part-time or as a secondary activity, it usually affects your work input in your entrepreneurial activity, and this change should be reflected in your YEL income. It is advisable to report changes as soon as possible, as income cannot be changed retroactively. If the change in your work input is significant enough that the annual lower limit for YEL insurance is no longer met, the YEL insurance can be terminated at the time the change occurred. Report changes in Elo's online service.

Insurance During Retirement

The obligation for YEL insurance alongside a pension depends on the type of pension you receive and how actively you work as an entrepreneur.
Entrepreneurial activity while receiving partial early old-age pension, disability pension, or partial disability pension must be insured normally under YEL if the insurance conditions are otherwise met.
If you are on an old-age pension under employment pension laws, insuring entrepreneurial activity under YEL is voluntary. A voluntary pension insurance must be applied for separately, as YEL insurance is automatically terminated the day before the pension is granted. Voluntary YEL insurance cannot be granted retroactively. You can apply for the pension accrued alongside the old-age pension to be paid when you reach your maximum retirement age.

Voluntary YEL Insurance

Entrepreneur's pension insurance is always mandatory for all entrepreneurs who meet the YEL insurance conditions. However, statutory insurance can be taken voluntarily in situations where the income falls below the mandatory insurance threshold or the entrepreneur is already on an old-age pension under employment pension laws.
Unlike mandatory insurance, voluntary pension insurance can be terminated by notification regardless of the continuation of business activity. However, the insurance is not terminated retroactively but at the earliest by the end of the current month. Voluntary insurance cannot begin retroactively either.

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