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Irregular income and YEL – 8 answers for part-time entrepreneurs

You can be a part-time entrepreneur even if you are a student, employed or retired at the same time. As a part-time entrepreneur, you manage your pension cover the same way as other entrepreneurs; by taking out YEL insurance when you meet all five conditions for YEL insurance.

Many are interested in part-time entrepreneurship, but it can also raise concerns. Will you have to spend all your income on YEL contributions, or what should you do when your income varies from year to year? And what happens if you did not take out YEL insurance on time? We have compiled answers to frequently asked questions about situations where income from irregular self-employment varies over and below the lower YEL limit.

When should I take out YEL insurance?

You will need to take out YEL insurance when your full-time or part-time work as an entrepreneur meets the following five conditions:

You are between 18 and 67 years old.

The upper age limit for YEL insurance increases step by step. For entrepreneurs born in 1957 or before, the insurance obligation ends when the person turns 68, for those born in 1958–1961 the age limit is 69, and for those born in 1962 or later the age limit is 70.

You work as a self-employed person for at least four consecutive months.
Your YEL income is at least EUR 9,208.43 per year, or approximately EUR 767 a month in 2025.
You work for your own company, or you are a freelancer.
You live in Finland.

See if you need to take out YEL insurance

What if I already receive a pension?

If you pursue entrepreneurship while on an old-age pension in accordance with Finnish pension laws or receive a similar pension from abroad, you can take out YEL insurance voluntarily. However, if you are on a partial old-age pension or disability pension, you will need to take out YEL insurance if you are self-employed and meet the five conditions for YEL insurance.

If you receive rehabilitation or partial rehabilitation allowance, your pension decision contains an earnings limit that your YEL income cannot exceed without affecting the amount of allowance you are entitled to.

Do I have to take out insurance if I do not work but claim a salary from my company?

If you do not work at your company but claim a salary from your company, claiming salary counts as compensation for the work performed according to the instructions issued by the Finnish Tax Administration. This also applies if your spouse shares the income from the business activities with you for tax purposes. If the lower YEL limit is exceeded, the Finnish Centre for Pensions may send you a questionnaire to determine whether you are obliged to take out YEL insurance.

2. How does YEL insurance work if I am a sole entrepreneur with irregular income?

There are different types of irregularity. Whether or not you need to take out YEL insurance depends on your situation.

You do not need to take out YEL insurance when:

Your billing is based entirely on work that only you have performed, and it exceeds the lower YEL limit, but you work for less than four months over a 12-month period. In other words, you do not need to take out YEL insurance if your entrepreneurship is shorter than four months even if you exceed the lower YEL income limit.

However, you will need to take out YEL insurance when:

Your billing is based entirely on work that only you have performed, and it exceeds the lower YEL limit. The work lasts less than four months over a 12-month period, but it is seasonal and repeats over several years. In other words, there may be gaps of several months in your entrepreneurship, but your entrepreneurship is considered to continue from year to year. This scenario can apply to entrepreneurs such as those who run a kiosk in the summer.

3. When do I need to start paying YEL contributions?

Do I need to start paying YEL contributions immediately upon starting my business or only when I exceed the lower YEL limit? When you first start, you can run your business without YEL insurance if, for instance, you are not sure if you will continue working as an entrepreneur for at least four months.

However, you should apply for YEL insurance at the latest when you meet the lower YEL limit. You can apply for the insurance retroactively from the moment your invoicing exceeded the monthly limit of approximately EUR 700. By doing this you will not have to make a large contribution at once. Keep in mind that YEL contributions must be made for the entire validity period of your insurance.

The six-month arrangement period

You are given a six-month arrangement period upon taking out YEL insurance. For example, if your entrepreneurship subject to YEL begins in January, you have six months to take out YEL insurance retroactively from January.

The six-month condition applies to situations where the criteria for insurance obligation have been met. If the amount you invoice monthly is under EUR 700, you do not need to take out YEL insurance.

If you take out the insurance later than the six-month arrangement period, you may have to pay a negligence surcharge in addition to the earnings-related pension contribution, i.e. a higher earnings-related pension contribution.

4. What should I do if one year my invoicing exceeds the lower YEL limit but does not exceed it in some years?

Cancel your insurance if your confirmed income is below the lower YEL limit. Take out YEL insurance again when your invoicing exceeds the lower YEL limit and you meet the other conditions.

Please note that when you take out YEL insurance for the first time, you will get a 22% discount on your contributions. The discount will be automatically applied when you buy YEL insurance. You can get the discount for the first four years and for a maximum of two YEL insurance plans. In other words, if you cancel your insurance a second time before the end of the discount period, you will not get the discount for a third YEL insurance plan.

Read more about the five conditions of YEL insuring

5. How are my insurance contributions calculated?

The amount of your YEL contribution depends on your YEL income. Your income, on the other hand, depends on your turnover, your sector and your work contribution. For many sole entrepreneurs, the amounts invoiced often reflect the value of their work contribution. Your insurance contributions are calculated directly based on your confirmed income; the contribution is roughly a quarter of this income. Your age, the discount for start-up entrepreneurs and how often you also influence the amount of your contributions.

If you have a limited liability company and you claim dividends instead of a salary, you can determine your YEL income the same was as other entrepreneurs, or by estimating how much an employee who is as qualified as you would be paid as a salary for the work you do. The amount of salary or dividends you claim does not, on its own, describe the extent and quality of your work contribution. YEL insurance is specifically about insuring your work contribution and not, for example, insuring your company’s profit or turnover.

What happens if I exceed the lower YEL limit in the middle of the year?

If you meet the conditions of the insurance obligation in the middle of the year, you must apply for YEL insurance retroactively from the moment your invoicing started to exceed the lower YEL limit.

In other words, you must make YEL contributions retroactively if the company’s income exceeds the lower YEL limit in the middle of the year (EUR 9,208.43 in 2025).

6. What happens if I have not taken out YEL insurance on time?

YEL insurance can be taken out retroactively for the current and three previous calendar years. You will not accrue pension for the time before the past three years. Please note that if you take out YEL insurance retroactively, you will need to pay your previous YEL contributions at once. Because of this, we recommend that you take out the insurance as soon as your insurance obligation begins.

If it is found out later that you have not taken out YEL insurance despite meeting the conditions, the Finnish Centre for Pensions will either advise you to take out insurance or take out insurance on your behalf. If this happens, you may have to pay a penalty for negligence in addition to the normal YEL pension contributions.

7. What happens if I am unable to make YEL contributions?

YEL contributions are a large expense for entrepreneurs. Although you can retrospectively deduct the contributions in full when you file your taxes, it can be challenging to make the contributions when your income is not regular.

You can prepare for making the contributions for instance by scheduling due dates in a way that best meets your needs. For instance, if you run a summer kiosk, you can choose to make your YEL contribution once a year in July when the kiosk brings the most money in. You can make YEL contributions 1–12 times a year.

If you need more time for paying a contribution, you can adjust the payment term in our online service. Alternatively, you can agree on a payment plan with our customer service. You can also temporarily reduce your YEL contributions by using the flexibility option once in a calendar year if you meet the adjustment criteria. Read more about the flexibility option

We advise you to agree on your contributions in advance so that you can avoid any late payment charges. However, you will be charged penalty interest. The penalty interest is confirmed once a year. In the first half of 2025, the penalty interest is 11.5%.

If you fail to pay a contribution in full, it will be transferred to collection and, ultimately, to enforcement. However, it is also possible to agree on payments with the enforcement agents.