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Social and pension security for entrepreneurs

YEL insurance contributions and your future employment pension are based on your reported YEL income, which the pension provider confirms for your YEL insurance. In addition to your pension, the YEL income also has an impact on the level of the different benefits and pensions you may receive. For this reason, it is essential that your YEL income be dimensioned accurately in order to provide you with the proper security throughout your working career.

Income limits

During 2020

  • Minimum 7,958.99 euro.
  • Maximum 180,750.00 euro.
  • The minimum specified in the Unemployment Security Act is 13,076 euro.

The YEL calculation service shows you what type of security your current income would provide for various situations. You can see how changes in your income would affect your pension and social security and the impact such changes would have on your insurance contributions.

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Your YEL income affects the following pensions and benefits:

Pensions and rehabilitation

Employment pension insurance provides you with security when your income changes due to old age, disability or the death of a family provider. A self-employed person’s pension accrues in accordance with the confirmed YEL income reported for the YEL insurance policy. YEL income not only affects the amount of your future old-age pension but also serves as the foundation for other pensions and benefits under employment pension legislation, which you may be entitled to already prior to reaching the pensionable age for old-age pension.

Pension accrues for all ages at an annual rate of 1.5 per cent of the YEL income. However, during the transition period of 2017–2025, pension will accrue at a rate of 1.7 per cent of the YEL income for those aged 53–62.  Read more about pension accrual >

Read more about

Illnesses

Starting from 1 January 2020 the annual income serves as the basis for the amount of the sickness allowance provided by Kela. The annual income is calculated from the reference period of 12 calendar months prior to the calendar month that precedes the initiation of your work disability. For self-employed persons, the basis for the calculation of the annual income is the YEL income. If the amount of the YEL income has changed during the 12-month period in question, the average income will be used.

YEL insurance cannot be interrupted due to a brief period of illness. It can, however, be terminated due to an extended sick leave. In this case, you will need to take a new YEL insurance policy when you return to work after your sick leave.


Read more about the changes regarding the determination of the sickness and parental allowances provided by Kela >

Accidents

The annual earnings used for voluntary accident insurance policies intended for self-employed persons are bound to their confirmed YEL income. Your YEL income also affects any compensation for loss of earnings and pensions resulting from an occupational accident. In order to be entitled to accident insurance for a self-employed person, you must have a valid YEL insurance policy.

Further information:

Fennia >
LocalTapiola >
Turva >

Unemployment

A self-employed person may have the possibility to receive Kela’s basic unemployment allowance or, as a member of an unemployment fund, an earnings-related unemployment allowance if that person’s YEL income has been at least the minimum required for unemployment security, which in 2020 was 13,076 euro. 

One requirement to receive an unemployment allowance is that your entrepreneurial activities must be considered substantial in the manner intended by the Unemployment Security Act. If your YEL income falls below the minimum you can still apply for a labour market subsidy from Kela. If you are a member of an unemployment fund, the amount of your earnings-related unemployment allowance is based on your YEL income.

Further information:

The Employment and Economic Development Office >
Finland’s Unemployment Fund for Self-Employed Persons (SYT) >
The Unemployment Fund for Entrepreneurs and the Self-Employed (AYT) >

Parenthood

The income confirmed for your YEL insurance is used as the basis for determining the amount of the maternity, special maternity, paternity, parental and partial parental allowance. The benefit is generally calculated in accordance with the level of the most recently confirmed taxation, which means that any parental allowance starting in 2019 is based on the YEL income for 2017.

The determination of the allowance will change starting from 1 January 2020. Read more from Kelas website: Amount determined on new grounds as of 1 January 2020

If you are not working during your family leave, your YEL insurance can be terminated as ending on your last day of work. In this case, you will need to take a new insurance policy when you return to work. If you are working during your family leave, your YEL insurance is not terminated. It may, however, be necessary to adjust your YEL income if your work input in the company is reduced during the family leave.

Elo is here to help and support you

Elo's Online Service is always available for you to use whenever it's most convenient for you. For TyEL and YEL insurance matters, please call us at +358 (0)20 694 730 (weekdays 8 a.m.-4:30 p.m)