YEL is more than a mandatory expense—it provides security in different life situations
For a new entrepreneur, YEL insurance can feel bureaucratic or like just another expense. In reality, YEL—the Finnish entrepreneur’s pension insurance—is a central part of your social security. It affects your pension, sickness allowance, parental allowances and unemployment security. This article explains what YEL means and when you need it.
What is YEL insurance and who needs it?
YEL is statutory pension insurance for an entrepreneur who meets all of the following conditions:
- You are at least 18 and have not reached the upper insurance age for your year of birth. The upper age is 68, 69 or 70, depending on the year of birth.
- You live and work in Finland. EU social-security rules and international agreements may create exceptions.
- Your entrepreneurial activity continues without interruption for at least four months.
- Your estimated YEL income is at least €9,423.09 per year in 2026.
- You work in your business as an entrepreneur. The same work is not insured under YEL if it is performed in an employment relationship covered by TyEL.
Other insurance cannot replace YEL, and arranging it on time is part of responsible entrepreneurship.
What does confirmed YEL income affect?
Confirmed YEL income is the central basis of the insurance. It is not the company’s turnover or profit, nor the salary you withdraw. It represents the monetary value of your work, using the salary that would be paid to an equally skilled person for the same work as a starting point. It determines the contribution, pension accrual and several social-security benefits. Setting it too low can leave you with insufficient protection when you need it most.
When and how do you arrange YEL?
YEL insurance must be arranged within six months of beginning entrepreneurial activity covered by YEL and then takes effect retroactively from the start of that activity. You can obtain it from an earnings-related pension insurance company or a pension fund that provides YEL insurance. Estimate the value of your work realistically rather than automatically choosing the minimum.
How are YEL contributions calculated?
The contribution is calculated using your confirmed YEL income. In 2026, the contribution is 24.40% of that income. A first-time entrepreneur receives a 22% discount for the first 48 months; subject to the rules, unused discount time may be applied to a second period of entrepreneurship. YEL contributions are fully tax-deductible, but how the deduction is claimed depends on who pays them.
Take your protection seriously from the start
Although YEL can feel bureaucratic, it is the entrepreneur’s safety net. A realistic confirmed income can make a substantial difference in a difficult life situation. Learn about the requirements, ask for advice when needed and set the income at a level corresponding to the actual value of your work. This builds a more sustainable foundation for both your business and your future.