YEL pension insurance provides security throughout life
Entreperneurship is a combination of freedom and responsibility. These form a combination even in the social and pension security for entrepreneurs. As a full-time entrepreneur you are obligated to take the YEL insurance, which is the pension insurance for the self-employed. You may, however, deterime its level yourself. Note that the YEL is not merely your pension but affects your life in a much broader sense.
The YEL earned income affects the amount of the following allowances:
- sickness allowance
- parental allowance
- earnings-related daily allowance
- disability pension, rehabilitation allowance
- vocational rehabilitation
- old-age pension
- survivors’ pension
You can calculate the effect of the YEL earned income on your social security and evaluate the amount of insurance payments with for example the calculator run by Varma Mutual Pension Insurance Company.
You need YEL insurance if
- you are an entrepreneur and 18–67 years old
- you work as an entrepreneur or light entrepreneur
- your entrepreneurial activities continue for a minimum of four months
- your estimated income is more than 8 575,45 € per year (2023).
YEL insurance must be taken out of the pension insurance company of your choosing within six months from starting a business. The insurance is based on the entrepreneur’s YEL income determined by you and confirmed by your pension insurance company. The YEL contribution is paid for all months of entrepreneurship – also retroactively, if you take the insurance first after starting your business operations.
According to the unemployment allowances act you are an entrepreneur when you act in an entreprise, from which you by yourself or together with family own a statutory share. You are an entrepreneur also when you have paid job without having an employment contract or a permanent position, in other words, when you work as a freelancer through light entrepreneurship services.
As an entrepreneur you are entitled to daily unemployment allowance if the amount of earned income, which your pension insurance is based on, is a minimun of €14 088 per year (the level for 2023). With lower earned income you can only receive labour market support.
You are not entitled to unemployment benefits if you are fully employed as an entrepreneur, but you have to close down your business in order to receive the benefit.
According to the Unemployment Security Act, you are unemployed if it can be proven that your business activities have ended or if your employment with the company has ended in a lawful manner. The TE Office always ensures that you meet the employment conditions for the payment of the benefit. The concept of terminated entrepreneurial activity varies depending on the form of enterprise and the entity as a whole.
Employees are insured by an unemployment fund for salaried employees, and entrepreneurs are insured by the Unemployment Fund for Finnish Entrepreneurs. You cannot be a member of both funds at the same time. You should always choose an unemployment fund according to your main occupation: if you are a parti-time entrepreneur with a full-time job, you should belong to an unemployment fund for salaried employees.
The unemployment fund for full-time entrepreneurs is the Unemployment Fund for Finnish Entrepreneurs (Yrittäjäkassa). Päätoimisen yrittäjän työttömyyskassa on Yrittäjäkassa. Read more about the entrepreneur’s unemployment allowance and familiarise yourself with Yrittäjäkassa.
If you are unemployed and start a business, you may apply for a start-up grant or an unemployment allowance. If you choose the unemployment allowance, you will receive an unemployment allowance for the first four months after the establishment of the company, as the full-time/part-time nature of the work is not assessed during this time. If your business generates income during the first four months, you will receive an adjusted unemployment allowance.
After four months the TE Office will assess whether you are operating as a full-time or part-time entrepreneur. If the business is deemed to be a full-time job, you will lose your entitlement to unemployment allowance. If the business is deemed to be apart-time job, you may continue to receive an unemployment allowance. Note that the assessment is not based on the profit of the business but on the time spent on the business. If the business is not deemed to be a full-time job at the end of the four-month period and you wish to continue as an entrepreneur, you can apply for a start-up grant if you expand your business into a full-time job.
As an entrepreneur you can organise occupational health care for yourself and receive reimbursements from Kela. The requirement is that you have YEL insurance.
The goals of occupational health care are a healthy and safe work environment, a good working community, prevention of work-related illness as well as maintaining and promoting working and performance.
The entrepreneur’s own health and performance form the basis for a profitable business: eat healthily, get enough seep add excercise regularly. Also vacation is extremely important regarding recovery from the work load and coping at work.
- Decide on a holiday that is long enough and stick to it.
- Inform your customers about the vacation and make the necessary arrangements in good time.
- If necessary, arrange someone to cover your work.
- if you have to take care of work matters during the vacation, determine your working hours in advance.
- Write down any unfinished tasks so you can easily get back to them after your vacation.
Learn to have mercy on yourself. If you have trouble with coping, be proactive and ask for help. Everyone needs a safety net to cope, most and foremost to succeed. Learn the following mantra by heart: build network, outsource, prioritize and delegate.