YEL or TyEL – which earnings-related pension insurance do I need?

Both pension insurance for the self-employed (YEL) and employer's pension insurance (TyEL) provide security for retirement. But which insurance policy is the right one for your situation, YEL or TyEL? As a general rule, the choice of insurance depends on whether you need insurance for yourself as an entrepreneur or for your employees as an employer.

In general, you need YEL insurance when you are self-employed and TyEL insurance when you hire employees. YEL insurance is a personal insurance policy for entrepreneurs that guarantees your pension and social security benefits, such as parental allowance. TyEL insurance, on the other hand, provides pension cover for your employees. You need both if you are both an entrepreneur and an employer!

When do I need YEL insurance?

As a self-employed person, you take care of your own pension cover and need YEL insurance within six months of starting your business. By law, you are obligated to take out YEL insurance when

  • you are 18 years of age or older,
  • you work in your own business or as a light entrepreneur,
  • you are self-employed for at least four months, and
  • your YEL income, i.e. the value of your work input, is at least EUR 9,010.28 per year (2024).

Different company forms have their own rules on who is considered a self-employed person under the Self-Employed Persons' Pension Act. Sometimes family members working in the company also need their own YEL insurance. This depends on the company form and the family member's work and position in the company. Find out more about how the company form affects the YEL obligation.

If you work as a self-employed person alongside your old-age pension, YEL insurance is optional for you.

Try the YEL calculator! It allows you to estimate your contributions, accrued pension and social security benefits provided by YEL insurance.

When do I need TyEL insurance?

When you hire employees for your company, you are obliged as an employer to provide them with statutory pension cover. In practice, this means that you must take out TyEL insurance for your employees and contribute to the cost of it. The contribution is based on the wages declared in the Incomes Register, and in 2024 the basic TyEL contribution is 25.12% of the employees' wages. Both the employer and the employee participate in the contribution. The employee's share is either 7.15% or 8.65%, depending on the age of the employee. The employer's share is 17.34% on average (2024).

You need TyEL insurance if

  • your employee is working under an employment contract,
  • he or she is 17 years of age or older, and
  • you pay your employee a salary of at least EUR 68.57 per month (2024).

The upper age limit for insurance depends on the employee's year of birth:

  • 68 years for those born in 1957 or earlier
  • 69 years for those born between 1958 and 1961
  • 70 years for those born in 1962 or later

TyEL insurance must be taken out at the latest when you declare the salary details of your first employee to the Incomes Register. Read more about TyEL insurance.

If you are unsure whether you need YEL or TyEL insurance, you can always contact our customer service. Our insurance experts will be happy to support you on your entrepreneurial path!

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