You need statutory YEL insurance if you are self-employed or a light entrepreneur and meet the YEL obligation. YEL insurance is by far the most important insurance for self-employed people. Not only does it accumulate a pension for the self-employed person, but it also provides the basis for other social security benefits for the self-employed, such as sickness and parental allowances and the unemployment benefit.
Who is obliged to take out YEL insurance?
By law, a self-employed person is obliged to take out YEL insurance when
- the self-employed person is of legal age, i.e., has reached the age of 18
- the self-employed person works in his or her own company or as a light entrepreneur
- the entrepreneurial activity continues for at least four months
- the YEL income, i.e., the value of the work input, is at least EUR 9,010.28 (in 2024) per year.
If you are wondering whether you are obliged to take out YEL insurance or not, you can always contact Varma's customer service at 010 192 100 for help and advice on assessing your situation.
When does the YEL obligation start?
The YEL obligation starts from the day when the above criteria are met, i.e., when the entrepreneurial activity under the Self-Employed Person's Pensions Act has begun. You have six months from the date on which the YEL obligation starts to take out YEL insurance. This six-month period gives you the opportunity to review how the activity is starting up and to assess the amount of your earnings and your annual YEL income.
A self-employed person's YEL income, i.e., the value of the work input, must be at least EUR 9,010.28 per year (in 2024). YEL income is the value of the self-employed person's work input, i.e., the salary that the self-employed person would pay to another person for the same work. When the YEL income exceeds EUR 751 over a period of at least four months, the self-employed person is obliged to take out YEL insurance because the annual YEL income exceeds the lower limit (12 x EUR 751 > EUR 9,010.28). YEL insurance must be taken out retroactively from the date on which the value of the self-employed person's work input first exceeded EUR 751.
What happens if a self-employed person does not take out YEL insurance on time?
If you only take out YEL insurance after the six-month arrangement period has passed, you may have to pay a penalty of at least 10% of the YEL contribution for the period of neglect. As YEL insurance is statutory and compulsory for the self-employed, the Finnish Centre for Pensions can ultimately take out YEL insurance on behalf of the self-employed person through the earnings-related pension company of their choice. In this case, the penalty will be a minimum of 30% and a maximum of 100% of the YEL contribution for the period of neglect. The amount of the penalty for neglect is set by the State Treasury.
So don't hesitate to take out YEL insurance! The longer the period for which you take out YEL insurance retroactively, the higher the YEL contribution for the retroactive period. By taking out YEL insurance in time, you will avoid retroactive contributions.
Join our satisfied self-employed customers
We'll support you through the changing and unexpected twists and turns in your life and business, whether it's illness, the arrival of a new family member or the need for flexible payment arrangements. You can take care of your insurance matters online, or contact our experts by phone, chat or online message in Varma Online Service.
More than 44 000 future makers have already chosen Varma to take care of their pension cover! We offer new entrepreneurs a 22% discount on their YEL contributions for the first four years. If you already have YEL insurance elsewhere, we'll take care of the termination for you.