Who should take YEL insurance?

As a self-employed person, you are responsible for your own employment pension insurance. As part of starting up your own entrepreneurial activities, you will need to take YEL insurance. YEL insurance ensures that you accrue employment pension for your future retirement and provides security if you become ill, have children or find yourself unemployed. YEL insurance is a statutory insurance and cannot be replaced by voluntary pension insurance.

You must have YEL insurance coverage from the moment you meet all the criteria listed below. You must take the insurance within six (6) months from the date on which you began any business activities that must be covered under YEL.

The Finnish Centre for Pensions oversees the insuring of entrepreneurs and, annually, sends out a reminder to those it believes may be obliged to take YEL insurance. The letter prompts entrepreneurs to clarify their own insurance needs. If you have received a letter and you are wondering whether you need YEL insurance, let us help you. Our Customer Service is ready to assist you by phone 020 694 730.

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You must take YEL insurance if:

You are a self-employed person between the ages of 18-68

The obligation to take YEL insurance starts at the beginning of the calendar month after the self-employed person turns 18 and continues until the end of the month in which the person turns 68. The upper age limit for insuring rises gradually according to one’s year of birth as follows:

68 years for those born in 1957 or before
69 years for those born between 1958–1961
70 years for those born in or after 1962.

Your entrepreneurial activities have lasted without interruption for at least 4 months

Your entrepreneurial activities must last a minimum of 4 months in order for you to meet the obligation to take YEL insurance. Seasonal entrepreneurial activities must also be insured under YEL if the activities continue from one year to the next, even though they cease for several months in between. For example, an entrepreneur who runs a summer kiosk is generally considered to have business activities that continue consistently from one year to the next.

Your income is at least 7,958,99 euro for the year 2020

The income amount is your own estimate of the value of your work input in the company, and it should correspond to such wages that would be reasonable to pay for the same or similar work.

You work in your own company

YEL insurance is not required if you simply own a company, you must also be employed within that company. Entrepreneurial activities that are carried out part-time must also be insured under YEL if the other conditions for insuring are met. If you simultaneously work as an employee for another employer, your employer will also pay the statutory contributions as prescribed by the Employees' Pensions Act.

A family member works in your company

Under the Self-Employed Persons' Pensions Act, the following are considered to be family members:

The spouse or common-law spouse of the self-employed person
The self-employed person's children, parents and their spouses and registered partners who reside in the same household

Siblings are not considered family members under YEL, even if they reside in the same household.

Insuring entrepreneurial activities within different company forms

Professional and private entrepreneur

Professional and private entrepreneur and a family member working for the business without pay.

Partnership

Partner working within the business.

Limited partnership

Active partner working within the business.

Limited company

Owning alone more than 30 per cent or together with family members more than 50 per cent of the share capital or votes and personally owning at least one share.

Co-operative

Individual working in a managerial position who alone has more than 30 per cent or together with family members more than 50 per cent of the controlling interest in the business.

Light entrepreneurship

If the preconditions for YEL insurance are otherwise met, a light entrepreneur must also take YEL insurance.

Useful information

Managerial positions include: Managing director, Board member, Division director, Individual who has the right to sign for the company.
In small family businesses, the owner family members working in the company are generally. considered to be in a managerial position regardless of their formal titles.
Indirect ownership, meaning ownership of a company through other corporations or groups, is included when calculating ones share of ownership. A self-employed person also signifies a person who in fact runs a business, even if the operations of the business are formally registered in another person’s name, or within a corporation or group in which the controlling interest is formally in another person’s name.

Voluntary YEL insurance

If your entrepreneurial activities are so minimal that your YEL income falls below the minimum limit, you can still opt to take voluntary YEL insurance. YEL insurance is also voluntary for a self-employed person who is receiving an old-age pension in accordance with the employment pension legislation. Voluntary insurance can be terminated whenever one chooses, but not retroactively. It is also not possible for voluntary insurance to begin retroactively.

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