Don't underinsure yourself!

Do not underinsure yourself but estimate your YEL income (annual income for self-employment) at as correct a level as possible already from the start of your self-employment.

Your confirmed income will determine your:

  • pension contribution,
  • future monthly pension,
  • sickness allowance based on  your health insurance,
  • benefits based on your voluntary accident insurance,
  • unemployment allowance, and
  • income during parental leaves.

Earnings limits in 2022

  • Your confirmed annual income has to be at least €8,261.71.
  • You can insure earnings to an amount of no more than €187,625 euros per year.
  • To get insurance for unemployment, you must earn at least €13,573 euros per year from your self-employment.

How is the amount of your YEL income determined?

Your YEL income is the monetary value of your work input as a self-employed person. Rule of thumb: your YEL income should correspond to the wage that you would pay to a worker that you hired to do the same work.

When you apply for insurance under the Self-employed Persons’ Pensions Act (YEL insurance) with a pension provider of your choice, that pension provider will recommend a certain YEL income level for you. The recommendation is the pension provider’s estimate of a suitable YEL income level for you. It is based on the median wage data of workers in your business’ branch and that data on your business’ and field’s turnover.

Your recommended YEL income level comes with a leeway. It means that you can set your YEL income to a level that best meets the value of your work input. The leeway allows you to set your YEL income at up to 30 per cent above or below the YEL income level recommended for you.

If your recommended YEL income level and the leeway do not sufficiently consider your work input, it is possible to deviate from the recommendation for a duly justified reason. Such reasons may include:

The highest wage paid to your employee is higher than your recommended YEL income.

  • Your self-employment is done on the side or as part-time work.
  • Your working hours are either fewer or higher than average.
  • Your work is unconventional (e.g., assisting tasks, family workers).
  • Your company has other employees who reduce or increase your own work input (e.g., family workers or many employees).
  • Your wage, fringe benefits or other actual earnings that are taxed as earned income are higher than your recommended YEL income.

Your pension provider confirms your YEL income after you have submitted your YEL insurance application. The YEL income level of a self-employed person is determined in the same way by all pension providers.

Keep your estimated YEL income up-to-date

Contact your pension provider when you want to talk about raising your confirmed income or if there are changes in your business operations. The confirmed income cannot be amended in retrospect.

Your income is flexible temporarily in both directions: it can be raised or reduced. Go to the site ‘Pension amounts or contributions’ for more information on how your income is flexible.