Light entrepreneur and YEL insurance

As a light entrepreneur you employ yourself and invoice your customers using an invoicing service. You must take care of your pension cover by taking out YEL insurance when the conditions for insurance listed below are met.

Who is considered a light entrepreneur?

You can be considered a light entrepreneur if you employ yourself and use an invoicing service to invoice your customers. As a light entrepreneur, you do not need to have your own company or a business ID.

As a light entrepreneur, you work on your own account for one or several customers. You are also responsible for marketing and customer acquisition and you agree with your customers on the conditions and compensation for the assignments you receive.

You invoice your customers using an invoicing service. The invoicing service charges a specific percentage on each invoice and additionally takes care of, for example, accounting tasks on your behalf.

In what kind of life situations is light entrepreneurship a good solution?

As a light entrepreneur, you can test the feasibility of your business idea with a low threshold. Invoicing services offer an easy way to invoice for occasional, seasonal or hobby-based work.

If you work full-time for another employer and light entrepreneurship is a secondary occupation for you, you and your employer are both responsible for your pension cover. In that case, your employer takes out employees’ pension insurance (TyEL insurance) for you – and you take out self-employed person’s pension insurance (YEL insurance) for yourself. Both insurances are statutory, i.e. mandatory. Read more about part-time entrepreneurship.

Does a light entrepreneur need to take out pension insurance?

As a light entrepreneur, you usually take care of your pension cover by taking out YEL insurance. You need to take out YEL insurance when the following five conditions are met:

  1. You are 18–67 years of age. The upper age limit for YEL insurance increases gradually. The obligation to insure ends at the latest at the end of the calendar month in which
    • an entrepreneur born in or before 1957 turns 68
    • an entrepreneur born in 1958–1961 turns 69 
    • an entrepreneur born in or after 1962 turns 70.
  2. Your entrepreneurial activities last at least four months.  
  3. Your YEL income is at least equal to the lower YEL limit, i.e. EUR 8,063.57 per year (in 2021).
  4. You work in your company.
  5. You live in Finland.

Using an invoicing service does not automatically mean that you are an entrepreneur

As an entrepreneur, you need to take out YEL insurance when the above-listed conditions are met. However, if your work has the characteristics of an employment relationship, i.e. you have made an employment contract, you are paid for your work and your employer supervises and manages your work, you are considered an employee. In that case, your employer is responsible for pension insurance (TyEL).