YEL income as the basis for insurance

A self-employed person’s pension insurance (YEL) is the basis for an entrepreneur’s pension and social security. YEL insurance secures your income when you fall ill, lose your work ability or take parental leave. Your pension, social security benefits and YEL contributions will be calculated based on the YEL income.

What is YEL income?

The YEL income should correspond to the monetary value of your work input. YEL income does not mean your taxable income or the salary you pay yourself. YEL income is also not your company’s profit or turnover, and it is not dependent on the profitability of your business.

YEL income is always determined on an annual basis, regardless of when your YEL insurance begins. For example, if your insurance begins on 1 March 2021, your YEL income is estimated and confirmed for the period 1 March 2021 – 28 February 2022.

Seasonal entrepreneur’s YEL income

If you work as an entrepreneur on a seasonal basis, i.e. for part of the year, you need to have YEL insurance if the same seasonal activities continue annually and the other YEL insurance conditions are met. Keep your YEL insurance in force continuously and year-round. Estimate your YEL income based on the amount of work during your work months. If, for example, you work five months during the year, your YEL income is equal to the value of your work input during these months.

How is YEL income estimated and confirmed?

When you take out YEL insurance, we will confirm your annual YEL income that corresponds to your work input. When confirming the YEL income, we will take into account the information you have provided on your entrepreneurial activities and your estimate of your YEL income.

The YEL income is used as the basis for calculating the pension that you accrue from your entrepreneurship and your YEL insurance contribution. The allowances paid by Kela, such as the sickness and parental allowances, are also calculated based on your confirmed YEL income. In addition, the YEL income determines the level of your unemployment security.

Your YEL income should, at minimum, correspond to a salary that would be paid to a person with the same professional skills on an annual basis. In brief: YEL income is the sum of money you would pay to another person for doing your work.

When estimating your YEL income, take into account the number of your working hours, your company’s turnover and the possible seasonality of your business. The YEL income includes all the work you do as an entrepreneur. So you only need one YEL insurance even if you have several companies.

Also take a look at the Finnish Centre for Pensions’ YEL income guide (tyoelakelakipalvelu.fi).

The YEL calculator gives you an estimate of your pension, the level of your social security and your insurance contribution.

Go to the YEL calculator

YEL income lower and upper limit

YEL income has lower and upper limits. The limits change annually in accordance with the wage coefficient confirmed by the Ministry of Social Affairs and Health. If your YEL income is at least equal to the lower YEL income limit, you have the obligation to take out YEL insurance. In 2021, the lower limit is EUR 8,063.57 and the upper limit EUR 183,125.

Year 2021 € / year
Entrepreneurial activities must be insured if the self-employed person's work
input is valued at more than
8,063.57
The upper limit of YEL income for a self-eployed person is 183,125.00
A self-employed person who is unemployed can collect basic daily allowance from Kela
if his/her YEL income is at least
13,247.00
A Self-employed person can join the unemployment fund if his/her
YEL income is at least
13,247.00

How does YEL income affect my income in various life situations?

The table shows which benefits paid by Kela or other parties your YEL income has an impact on.

Situation Benefit to be applied for Impact of earned income Who pays
You fall ill Daily sickness allowance Your daily sickness allowance is based
on your earned income
Kela
You have a baby Parental allowance The allowance is based on your
earned income
Kela
You lose your ability
to work due to an
accident or illness
Vocational rehabilitation and/or
disability pension
The compensation is based
on your earned income
Employment pension insurance company
You lose your ability
to work or die due to
an accident
Compensation from accident insurance;
daily allowance, rehabilitation,
survivor's pension etc.
The compensation is based on a sum
that is at most equal to your
earned income
Non-life insurance company
You lose your job Basic daily allowance To accumulate the daily allowance, your earned
income must beat least EUR 13,247.00 in 2021
Kela
  Labour Market Subsidy A means-tested benefit when you are not entitled
to basic daily allowance
Kela
You lose your job Earnings-related daily allowance To accumulate the daily allowance, your earned
income must be at least EUR 13,247.00 in 2021
The Unemployment Fund for Entrepreneurs and the
Self-employed AYT
or the Finnish Unemployment
Fund for Entrepreneurs SYT
You want to work less or
take out part of your pension
Partial early old-age pension The amount is either 25 or 50 percent calculated
from the pension that you have accrued by
the end of the year preceding your retirement
Employment pension
insurance company
You age Old-age pension or years-of-service-
pension (under certain conditions)
The pension is based on your
earned income
Employment pension
insurance company
You die Survivors' pension The pension is based on your
earned income
Employment pension
insurance company