YEL insurance for the self-employed
As a self-employed person, you are your own master in insurance matters too. By taking out YEL insurance you secure your life and that of your family.
As a self-employed person, you insure yourself under the Self-Employed Persons’ Pension Act (YEL). Taking out YEL insurance is statutory – which means it is obligatory. It is obligatory because it is part of a self-employed person’s social security. If you insure yourself properly you will thank yourself many times over, even long before you retire.
What does YEL insurance contribution cover?
When?
Take out YEL insurance at once when you start working as a self-employed person. Then you will no longer have to worry about it. In any case, take out the insurance within six months from the date you started working as a self-employed person. Should you forget to take out the insurance in time, the Finnish Centre for Pensions will take it out for you – and you will receive a larger-than-usual invoice for it.
Whenever you take out the insurance, the contributions are calculated from the start of your entrepreneurship. From the same moment on, YEL insurance will begin to secure your life and that of your family.
Who is it for?
Take out YEL insurance if all of the following claims apply to you.
- I am aged between 18–67.
- I have been working as a self-employed person for at least 4 months without interruption.
- My earned income is at least EUR 7,656.26 in 2018.
- I work in the company I own.
- The work I do does not fall under any other pension act.
Taking out insurance is also affected by how much you work and how large a share you own in your company. YEL insurance is also often the right option if you work temporarily abroad as a self-employed person. If your family members work in your company, they might also need YEL insurance. If you are on pension and continue working as an entrepreneur, YEL insurance may be either mandatory or voluntary.
YEL insurance Terms and Conditions
Read more about self-employed person's pension
Freelancers
A freelancer is considered to be a self-employed person if he or she is working but has no employment contract or is not in public service. Self-employed freelancers are responsible for their own pension contributions in the same way as other self-employed persons.
However, if the freelancer’s work fulfils the criteria of an employment relationship, the freelancer is considered to be an employee. Such criteria are fulfilled if the freelancer works for another person for remuneration under that person’s supervision and control. In that case, the employer is responsible for the freelancer’s earnings-related pension insurance, and the freelancer’s pension contributions are collected in the same way as those of employees in private sectors.
A freelancer can work simultaneously as a self-employed person and as an employee.
Impact of work input and ownership
As a self-employed person, your insurance is practically always YEL insurance. The decision to grant you YEL insurance is mostly affected by the size of your work input and how large a share you own in your company. Refer to the table to see what you can do in different situations.
Read more about temporary entrepreneurship abroad
Read more about ending or interrupting entrepreneurship
|
Situation |
What to do |
|
You work as a self-employed person |
Take out YEL insurance |
|
You work as a partner in a general partnership |
Take out YEL insurance |
|
You work in an executive position in a co-operative or other organisation |
Take out YEL insurance |
|
You work part-time as a self-employed person and your earned income exceeds the lower limit for YEL income, or entrepreneurial activity lasts continuously for more than four months |
Take out YEL insurance |
|
You work as a self-employed person in Finland but you are not a Finnish citizen |
Take out YEL insurance |
|
Keep your YEL insurance valid |
|
|
You work as a self-employed person while receiving disability, partial disability or part-time pension |
Take out YEL insurance |
|
You continue working as a self-employed person even after you start receiving partial old-age pension, and YEL conditions still apply to you |
Keep your YEL insurance valid. Check your earned income! |
|
You start to work as a self-employed person after receiving partial old-age pension, and YEL conditions apply to you |
Take out YEL-insurance |
|
You work as a self-employed person while receiving old-age pension |
Consider taking out voluntary YEL insurance |
|
You work in an executive position in a limited liability company in which you hold more than 30% of the shares or votes either directly or through an intermediate company |
Take out YEL insurance |
|
You work in an executive position in a limited liability company in which you hold more than 50% of the shares or votes together with your family members either directly or through an intermediate company |
Take out YEL insurance |
|
You work in a limited liability company in which you hold alone a maximum of 30% of the shares or votes or, together with family members, a maximum of 50%. |
Take out TyEL insurance |
|
You interrupt your work as a self-employed person due to illness, parental leave or other reason |
Consider terminating your YEL insurance |
|
You stop working in your company or reduce your work input considerably |
Terminate your YEL insurance |
Sometimes even for an entrepreneur’s family members
The rule of thumb is that each time you hire an employee, you should insure him or her under the Employees Pensions Act i.e. TyEL insurance. If your employee is a family member, he or she might need TyEL insurance instead of YEL insurance. Selecting the right option depends on, among other things, the legal form of your company.
Refer to the table to see what you can do in different situations.
|
Company form |
Situation |
YEL or TyEL insurance |
Consider |
|
Limited liability company |
Your family member works in your company but does not own any shares or receive any salary |
- |
No pension security |
|
Limited liability company |
Your family member works in your company, does not own any shares but receives a salary |
TyEL |
|
|
Limited liability company |
You and your sibling work in executive positions in a company that you have an equal share in |
YEL |
|
|
Registered business name |
Your child works in your company, lives with you in the same household and does not receive any salary |
YEL |
|
|
Registered business name |
Your child works in your company, lives with you in the same household and receives a salary |
TyEL |
|
|
Registered business name |
Your spouse works in a company that you own fully and does not receive any salary |
YEL |
|
|
General partnership |
Your family member works in your company, is not a partner and does not receive any salary |
- |
No pension security |
|
General partnership |
Your family member works in your company, is not a partner but receives a salary. |
TyEL |
|
|
Limited partnership |
Your family member works in your company, is not a partner or is a silent partner and does not receive any salary |
- |
No pension security |
|
Limited partnership |
Your family member works in your company, is not a partner or is a silent partner and receives a salary |
TyEL |
|
Who counts as a self-employed person’s family member?
Under the pension acts, the following are considered to be family members of a self-employed person:
- your spouse and the other party of a registered partnership regardless of whether you live in the same household or not
- your common-law spouse if you live in the same household (even if you are of same gender)
- your children, parents and grand-parents, i.e. a person who is directly related in the ascending or descending line to you or your spouse or common-law spouse and who is living permanently in the same household with you.
Adopted children and adoptive parents are equated with other children and parents. Siblings are not considered family members even if they live in the same household.
When is YEL insurance voluntary?
A self-employed person can choose to take out a voluntary YEL insurance if he or she is on a retirement pension or if the early earned income does not exceed the lower YEL income limit.
If I already have a YEL insurance?
If you already have a YEL insurance for another entrepreneurial activity, no new YEL insurance is required. YEL insurance is personal and covers all entrepreneurial activities. When calculating earned income, the total value of all work input made as an entrepreneur must be included.
If your YEL insurance is with another pension insurance company, you can easily transfer it to Ilmarinen. We will terminate your previous insurance on your behalf.
If you have any doubts about what to do, call us. Our customer service can be contacted at +358 10 284 3714.