YEL insurance 2026: the entrepreneur’s pension insurance in Finland

What is YEL?

YEL is statutory earnings-related pension insurance under the Self-employed Persons’ Pensions Act (1272/2006). As a self-employed person you have no employer paying into your pension, so you insure yourself. YEL is not a tax: the contributions go to the pension insurance company or pension fund you choose, and they build up your pension and social security. Voluntary pension savings cannot replace compulsory YEL. If you run several businesses, one YEL policy covers them all.

Who has to take out YEL insurance?

YEL is compulsory when all of the following apply:

• You are at least 18 and below the upper age limit: 69 if you were born in 1958–1961, 70 if you were born in 1962 or later.
• You actually work in the business. Owning it is not enough.
• Your self-employment has continued without a break for at least four months after you turned 18.
• Your estimated YEL work income (YEL-työtulo) is at least €9,423.09 a year (2026).
• You live and work in Finland. If you live in another EU or EEA country, EU rules decide where you are insured (A1 certificate).

The same rules apply to side businesses, seasonal work and people working without a Business ID. You must take out the insurance within six months of starting your business.

Your business form matters

• Sole trader (toiminimi): YEL whenever the conditions are met.
• General and limited partnerships (avoin yhtiö, kommandiittiyhtiö): partners with personal liability are YEL entrepreneurs. A silent partner in a limited partnership is insured under TyEL on any salary.
• Limited company (osakeyhtiö): a shareholder in a managerial position (managing director, board member or similar) is a YEL entrepreneur if they alone own more than 30% of the shares or votes, or more than 50% together with family members living in the same household. Ownership through another company counts too.
• Light entrepreneur: the same rules as everyone else. The invoicing service is not your employer, so YEL is compulsory once your work income is at least €9,423.09 a year.

Family members

Family members are a spouse or cohabiting partner and relatives in direct ascending or descending line who live in the same household as the entrepreneur. A spouse working in a toiminimi is a YEL entrepreneur, as is any other family member who works there without pay. If a family member other than the spouse is paid a salary, they are insured under TyEL.

Who does not need YEL?

• An entrepreneur whose work income is below €9,423.09 a year. You can still apply for voluntary YEL, but not retroactively.
• Activity lasting less than four months.
• A limited company shareholder below the ownership limits. If they are paid a salary by the company, they are insured under TyEL like an employee.
• An entrepreneur already drawing an earnings-related old-age pension. For them, YEL is voluntary.

YEL work income: what it is and how it is set

YEL work income is not your turnover, your profit or the salary you pay yourself. It is the money value of your work: the pay you would reasonably have to offer someone with the same skills to do your job. The pension company confirms it based on an overall assessment.

• Since 2023, the law requires the pension company to compare your work income with the median full-time private-sector pay in your line of business, alongside your workload, the scale of the business and your skills. The calculator on Työeläke.fi gives a recommendation based on your industry and turnover.
• The lower limit in 2026 is €9,423.09 and the upper limit €214,000 a year. The limits and your confirmed work income are index-adjusted every January using the wage coefficient.
• Every three years the pension company reviews your work income and sends a written proposal. If you do not reply within two weeks, the proposed amount is confirmed. If the change would be 5% or less, no proposal is made.
• You can ask for a change yourself if your business changes substantially, for example if your workload grows or shrinks. Work income cannot be changed retroactively.

YEL contributions in 2026

• The contribution is 24.4% of your confirmed work income at every age. In 2025 the rate still depended on age (24.1%, and 25.6% for ages 53–62), but there are no age brackets in 2026.
• A new entrepreneur pays 22% less for the first 48 months of their first period of self-employment, i.e. 19.032% of work income. If the business ends earlier, the unused discount months can be used in a later period. The discount does not reduce your pension, which accrues on your confirmed work income.
• Flexible payments: once per calendar year you may, under certain conditions, pay 10–100% more or 10–20% less than your work income implies without changing it. Paying more increases your pension; paying less reduces it.
• You can split the contribution into 1, 2, 3, 4, 6 or 12 instalments a year, with at least half falling due before August. A single instalment in January is the cheapest option, because interest is added to instalments weighted towards the end of the year.
• You are personally liable for your YEL contributions, also as a limited company shareholder.

What YEL work income affects

• Pension: you earn 1.5% of each year’s work income as pension. The same income also decides your disability and survivors’ pensions.
• Kela sickness allowance: for an entrepreneur it is based on YEL work income, not on a salary from your own company or on business profit. The general waiting period is the day you fall ill plus the following 9 working days. If your YEL is in force when you fall ill, you receive the YEL daily allowance (YEL-päiväraha) for that period, and its own waiting period is only the day you fall ill.
• Parental allowances (maternity and parental allowance) are also based on YEL work income. Without valid YEL, nothing from your self-employment counts towards Kela’s annual income, and this applies to light entrepreneurs too.
• Unemployment: you can join an unemployment fund for entrepreneurs if your YEL work income is at least €15,481 a year (2026). Below that you rely on Kela’s basic benefits only.
• Accidents: YEL does not cover accidents at work. You can take out voluntary accident and occupational disease insurance, with compensation tied to your YEL work income.

YEL and taxes

• Sole trader: deduct YEL contributions either on the business tax return (Form 5), on your own pre-completed return or on your spouse’s return, but only once. If the contributions are booked as expenses and you deduct them personally, enter them on Form 5 as non-deductible expenses.
• Limited company shareholder with YEL: the insurance and contributions are personal. Deduct them from your own or your spouse’s earned income on the pre-completed return under YEL- tai MYEL-maksut.
• A personal deduction saves the amount of your earned-income tax rate. Voluntary YEL below the income limit is deductible too.

Where to get insured

You can take out YEL with any earnings-related pension insurance company (Elo, Ilmarinen, Varma, Veritas) or with a pension fund if one exists for your field (Apteekkien eläkekassa, Eläkekassa Verso). The contribution rate is set by law and is the same everywhere; the differences lie in service and online tools. You can later move your policy to another company.

A worked example

Aila sets up a toiminimi in 2026 and works full-time in cleaning. Her pension company confirms her YEL work income at €30,000 a year.

• The normal contribution would be €30,000 × 24.4% = €7,320 a year, or €610 a month.
• As a new entrepreneur, Aila pays 19.032% for 48 months: €5,709.60 a year, or €475.80 a month. She saves €1,610.40 a year.
• Pension: €30,000 × 1.5% = €450 a year, i.e. about €37.50 of monthly pension for each insured year, in today’s money and before the life expectancy coefficient.
• Her work income exceeds €15,481, so she can join an entrepreneurs’ unemployment fund. In Kela’s own example, YEL work income of €20,000 gives a sickness allowance of about €47 per working day; at €30,000 it is higher.
• Her contributions are tax-deductible, so they reduce her taxable income.

Had Aila chosen the minimum work income of €9,423.09, her contribution without the discount would have been €2,299.23 a year. She would save money now, but she would earn only about a third of the pension, her Kela daily allowances would also be clearly lower, and she could not join an unemployment fund.

Common mistakes

• Setting work income too low to save on contributions. Sickness allowance, parental allowance and pension stay small exactly when you need them.
• Missing the six-month deadline. At the pension company’s request, the State Treasury (Valtiokonttori) can impose a neglect fee of up to the contributions for the neglected period, which can double what you pay.
• Ignoring the reminder. The Finnish Centre for Pensions (Eläketurvakeskus) monitors insurance: if you do not correct the neglect, it takes out the insurance at your expense for the current and three previous calendar years. Pension for any earlier period is lost, and compulsory insurance carries no new-entrepreneur discount.
• Assuming a side business or light entrepreneurship is outside YEL. Only the conditions count, not the business form or whether it is your main job.
• A limited company shareholder thinking a salary replaces YEL. Kela allowances are based on YEL work income, not on salary.
• Not replying to a review proposal within two weeks, so the work income changes without your input.
• Deducting YEL contributions twice, on both the business and the personal return.

Figures for 2026: contribution 24.4%, new-entrepreneur discount 22% for 48 months, work income lower limit €9,423.09, upper limit €214,000, unemployment fund threshold €15,481. In October 2026 the government submitted a YEL reform bill to Parliament: from 2028 entrepreneurs could choose either today’s work income or their taxable business earned income as the basis, in which case work income would have to be at least 50% of taxable earned income (phased in from 30% to 50% over 2028–2032). The new-entrepreneur discount would be removed for new entrepreneurs, while existing ones could keep it. The bill is not yet law, and details may change during parliamentary consideration. Sources: Self-employed Persons’ Pensions Act (1272/2006), Finnish Centre for Pensions, Kela and the Tax Administration.

Let us help you size your YEL

Tilitoimisto Debit Credit helps you check whether you must take out YEL and goes through with you which work income fits your work and the cover you need. We book your YEL contributions, make sure they are deducted correctly and only once, and help you when the pension company’s review proposal arrives. We work in Finnish and Russian. Get in touch and we will look at your YEL situation together.

Official sources

• Suomi.fi / Finnish Centre for Pensions: pensions for the self-employed
• Suomi.fi: entrepreneur’s pension insurance (in Finnish)
• Suomi.fi / Finnish Centre for Pensions: supervision of entrepreneurs’ insurance (in Finnish)
• Kela: sickness allowance and YEL daily allowance (in Finnish)
• Kela: annual income and YEL work income (in Finnish)
• Vero: deducting YEL pension premiums
• Finlex: Self-employed Persons’ Pensions Act 1272/2006 (in Finnish)
• Finlex: Income Tax Act 1535/1992, section 96 (in Finnish)