Pension insurance for the self-employed (YEL)

YEL insurance is a self-employed person's personal pension insurance, meaning you need YEL insurance if you work as an entrepreneur in your own company or as a light entrepreneur. With YEL insurance, a self-employed person accrues pension and takes care of their other social security.

TyEL, on the other hand, is pension insurance that an employer takes out for their employees. If you have an employee and you pay them wages or a salary, you must take out TyEL insurance. TyEL insurance accrues pension for the employee.

Read more about TyEL insurance

YEL insurance is mandatory insurance for the self-employed. In other words, it is statutory insurance. If you work as an entrepreneur or a light entrepreneur and you are between the ages of 18 and 69, you are obligated to take out YEL insurance for yourself if your self-employed activities last for at least four months. If your self-employed activities last less than four months, or if they are very small-scale activities and the value of your work input is low (less than EUR 751 per month in 2024), you do not have to take out YEL insurance.

YEL insurance should be taken out when you start your business activities. The starting date of your YEL insurance is the same as the starting date of your business activities. YEL insurance must be taken out within six months of the start of your business activities. This is referred to as the half-year arrangement period. The starting date of your YEL insurance, however, is always the date that you start your business activities.

Take out YEL insurance easily online

YEL insurance can be taken out retroactively. Keep in mind, however, that if you take out YEL insurance, for example, three months after the date when you started your business activities, you will also have to pay the insurance contributions retroactively from the date when your business activities started.

And if you take out YEL insurance only after the half-year arrangement period, you might end up having to pay not only the regular YEL contribution but also a penalty for neglecting to arrange pension cover. The penalty is at least 10 per cent of the amount of the YEL contribution during the period of neglect. The longer the retroactive period of your YEL insurance is, the more YEL contributions you will have to pay at once.

Read more about taking YEL insurance retroactively

Since YEL is statutory insurance for the self-employed, the Finnish Centre for Pensions monitors whether entrepreneurs take out the insurance or not. If you do not take out YEL insurance, the Finnish Centre for Pensions could ultimately take out YEL insurance for you. If that happens, you might end up having to pay not only the regular YEL contribution but also a penalty for neglecting to arrange pension cover. The penalty is at least 30 per cent and at most 100 per cent of the amount of the YEL contribution during the period of neglect. The State Treasury confirms the amount of the penalty for neglecting to arrange pension cover.

YEL insurance cannot be directly frozen but it can be terminated, and new insurance can be taken out again later. When your self-employed activities are interrupted for a longer period of time, let us know so that we can terminate your YEL insurance. YEL insurance can be terminated retroactively or you can inform Varma of the termination beforehand. The last day when your YEL insurance will be valid is your last working day. When you later resume your work as an entrepreneur, take out new YEL insurance.

Read more about terminating YEL insurance

Log in to the Varma Online Service and apply for termination

Light entrepreneurship has increased dramatically in recent years. Light entrepreneurs employ themselves and take care of invoicing through an invoicing service company. Light entrepreneurship makes it easy, for example, to try out part-time self-employment. As a light entrepreneur, you also need YEL insurance.

YEL insurance also makes up the basis for light entrepreneurs’ social security. Also for light entrepreneurs, the YEL income is used as the basis for determining daily sickness allowance and parental allowance, as well as unemployment benefits.

Read more about YEL insurance for light entrepreneurs

The price of YEL insurance depends on your YEL income. The YEL insurance contribution is a percentage of the YEL income. In 2024, the contribution percentages are
• 24.10% for those aged 18–52
• 25.60% for those aged 53–62
• 24.10% for those aged 63–69

The newly self-employed get a 22% discount on the YEL insurance contributions for the first four years. The discount is automatically granted to the newly self-employed when taking out YEL insurance. The discount can be used in up to two periods.

YEL insurance contributions are fully tax-deductible. You can deduct YEL insurance contributions either in your personal or your company's taxation.

The YEL insurance contribution is due on the 20th of the month or the next business day. You can pay it in one instalment or at a convenient pace in 2, 3, 4, 6 or 12 instalments. The YEL contribution is lowest if you pay it in one instalment in January. If you pay early in the year, you will be credited with interest. If you pay at the end of the year, you will be charged interest. At least half of the annual YEL insurance contribution must be paid before August. Use our YEL calculator to see how instalments affect the contribution.

When you order an e-invoice or opt for electronic invoicing, your YEL insurance payments will be taken care of smoothly in the busy day-to-day life of a self-employed person.

Read more about YEL insurance contributions

YEL insurance is paid either by the self-employed person personally or by the company. It is up to the self-employed person to choose whether to pay the YEL contribution through the company or personally. We can send invoices in the name of the self-employed person or the company. If the company pays the YEL insurance contribution, the company can deduct the entire contribution in its taxation. If the self-employed person pays the YEL insurance personally, the contributions can be deducted in full in their personal taxation.

Read more in our article: How do I deduct YEL contributions in taxation – eight tips for the entrepreneur

However, YEL insurance is the self-employed person's personal pension insurance, so the self-employed person is ultimately responsible for ensuring that the YEL insurance contributions are paid.

The YEL insurance contribution can be adjusted according to your financial situation. When times are good, you can improve your pension cover by paying an additional 10-100% contribution to your YEL insurance. You can pay the additional contribution annually if you wish and deduct it in your taxation like any other YEL contribution.

You can also temporarily lower your YEL insurance contributions by 10-20%. You can lower your contributions for a maximum of three years within seven consecutive calendar years.

You can have flexibility on your YEL contributions when your YEL insurance is valid for the whole of the flexibility year with one earnings-related pension company. Flexibility also requires that you do not have overdue, unpaid YEL contributions, you do not receive the discount for the newly self-employed and you are not yet being paid earnings-related pension from Finland. Send us a flexibility application and we will examine whether flexibility is possible.

The YEL insurance flexibility is meant for temporary increases or decreases in contributions. Your YEL income must correspond to your work input and the conditions of your activity. The flexibility does not replace a normal change in YEL income.

Read more about flexibility in YEL insurance

If you have difficulty paying your YEL insurance invoice on time, you can apply for a payment extension for the invoice in Varma Online Service.

Apply for a payment extension in Varma Online Service