Self-employed Persons’ Pensions Act

YEL insurance is the pension plan for entrepreneurs and light entrepreneurs. It enables more efficient insuring and more flexible pension planning for entrepreneurs. It's your personal pension plan and you can decide the extent, within some limits. YEL insurance is also tax deductible. We at FREE! think YEL insurance is almost like social security for entrepreneurs. YEL insurance can sound like it's only for your pension plan and the amount of your pension, but it also defines the level of your social security!

You are required to apply for YEL insurance if you are between ages 18-67, live in Finland, work as entrepreneur or light entrepreneur, your business is ongoing for over 4 months and your annual income is over 7958,99€. The YEL insurance fee is what you calculate your income for the year.

If you set your YEL insurance equal to your actual income; your unemployment security, sickness allowance and other social securities are just as good as for normal employees!

Example 1.
Are you working as a light entrepreneur for more than 4 months? If yes, then you are required to get YEL insurance. If no, then you are not required to get YEL insurance.

Example 2. 
Is your annual income more than 7958,99€? If yes, then you are required to get YEL insurance. If no, you are not required to get YEL insurance.

Unemployment security

Unemployment security allowance will be affected if you work as an entrepreneur or get employed in your profession. The employment officials (TE Services) will work with you to find out if you work as a full or part-time entrepreneur. If TE services define you as a full time entrepreneur, you are not entitled for unemployment benefits even if your income is low. If you are defined as a part time entrepreneur you are entitled for adjusted unemployment allowance. All of your monthly income over the 300 euro protection limit will be taken in consideration when calculating your daily unemployment allowance.

If your annual YEL income as a light entrepreneur is over 13076€, you are entitled for a basic unemployment allowance which is 33,66€ per day.

Earnings-related unemployment allowance is determined, like as an employee, by the basic unemployment allowance (33,66€ per day, starting 1.1.2020), earnings-related allowance and by child increases. The earnings related part will be defined by the income the entrepreneur has chosen for their Unemployment insurance. This income can't be more than the entrepreneurs YEL income. Membership fees will also be determined by your YEL income.

If a light entrepreneur decides to join an unemployment fund, she/he has to join the Entrepreneurs unemployment fund. The only one in Finland is SYT. If you decide to change from a Employees unemployment fund to a Entrepreneurs unemployment fund within 3 months of starting working as a light entrepreneur/entrepreneur, you will continue as a member without a new qualifying period for the new fund. You also have to join the new fund within a month after resigning from the old fund.


Even light entrepreneurs are allowed to be sick. If you have YEL insurance as a light entrepreneur, the deductible in the sickness allowance will be one day; that is the day you got sick. If you don't have YEL insurance, the deductible will be the same as with normal employees, the day you got sick and the next 9 days. With YEL insurance sickness allowance will be determined by your YEL income. You can find more information from Pension insurance VARMA web pages.

Light entrepreneurs sickness insurance payment was changed starting from 2020. Light entrepreneurs using invoicing services are not obligated to pay for sickness insurance, if they are not considered obligated to get YEL insurance. Sickness insurance fee is 1,34% of your salary.

The obligatory insurances for a FREE! light entrepreneur is 2,5% + VAT, which includes accident and liability insurances. You don't have to do anything to be insured and you'll automatically get very extensive insurance coverage! With liability and accident insurances the final decisions are made by insurance company Fennia .

Liability insurance

FREE! light entrepreneurs are always insured for liability during commissions. But what exactly is a liability insurance? Anyone can have an accident when working with or for your client. For example, you might accidentally break a very expensive antique vase or a window when you are working at your client. Liability insurance covers material damages in these situations.

You might have deductible in your home insurance; that is the amount you'll cover yourself, and after that the insurance company will pay for your broken phone or water damages from broken pipes. As a FREE! light entrepreneur your liability insurance will cover the damages with the same principle, after the deductible. The insurance company makes their decisions on case by case basis.

Accident insurance

If you hurt yourself during your work, you are insured with Accident insurance. You might fall during your commute on an icy side walk, slip on the stairs at work, or slip a knife from your hand and cut yourself - we all have accidents. As a light entrepreneur you are insured against these kinds of situations.

If an accident happens, please contact our customer service. Number is 020332345, save it on your phone.

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