When do I need insurance?

As a self-employed worker, you have to take out pension insurance under the Self-employed Persons’ Pensions Act within six months from the date on which you start your self-employment.

You are considered a self-employed worker if you:

  • receive a grant in the arts or sciences,
  • are an agricultural entrepreneur, or
  • you have earnings from work without being in an employment or service relationship.

If you do self-employed work on the side or if it is seasonal but meets the requirements of self-employment set out in the law, you have to take out insurance. In other words, the same rule applies if you are a small-scale self-employed person.

The Self-employed Persons’ Pensions Act applies also to a foreign self-employed worker who works in Finland.

If you are retired and work as a self-employed person, you can take out voluntary insurance for your self-employment.

You have to take out insurance for your self-employment if:

  • you are between 18 and 67 years old,
  • you work in your own company,
  • you have worked as a self-employed for at least four months without interruptions after you have turned 18, and
  • your confirmed income from work is at least 7,656.26 euros per year (in 2018).

Your confirmed income is your estimate of how much you will earn from your self-employment.

Note! If you are self-employed and have employees, you have to insure them, as well.

In unclear cases, the Finnish Centre for Pensions will decide if you are a self-employed person or not.

Depending on the company form and the nature of the work of your family member, they must be insured under the Employees Pensions Act (TyEL), the Self-employed Persons’ Pensions Act (YEL) or not at all.

Pension insurance and different company forms

We have included examples of how pensions should be arranged in different company forms. In the examples, we assume that the other criteria for taking out insurance (age limits, period of work, working in the company and the amount of the confirmed income and paid wage) are met. ‘Family member’ means the family member of the insured self-employed worker.

YEL = Self-employed Persons’ Pensions Act
TyEL = Employees Pensions Act

Private business name Earnings-related pension insurance
Both spouses work in the company. The company has been registered in the name of only one of the spouses. Both spouses must be insured under YEL
Family member who

  • is not the spouse,
  • works in the company, and
  • is paid for the work.
Must be insured under TyEL
Family member who

  • works in the company, but
  • is not paid for the work
Must be insured under YEL
General partnership Earnings-related pension insurance
Partner who

  • works in the company
Must be insured under YEL
Family member who

  • is not a partner,
  • works in the company, and
  • is paid for the work
Must be insured under TyEL
Family member who

  • is not a partner,
  • works in the company, but
  • is not paid for the work.
Is left uninsured
 

Limited partnership

Earnings-related pension insurance
Active partner who

  • works in the limited partnership
Must be insured under YEL
Silent partner who

  • works in the limited partnership, and
  • is paid for the work
Must be insured under TyEL
Silent partner who

  • works in the limited partnership, but
  • is not paid for the work
Is left uninsured
Family member who

  • is not a partner,
  • works in the company, and
  • is paid for the work
Must be insured under TyEL
Family member who

  • is not a partner,
  • works in the company, but
  • is not paid for the work
Is left uninsured
Limited company Earnings-related pension insurance
Partner in a limited company who

  • is in a senior position, and
  • owns alone more than 30% of the company shares or the voting rights based on those shares, or
  • owns together with family members more than 50% of the company shares or the voting rights based on those shares
Must be insured under YEL
Partner’s family member who

  • works in the company,
  • is paid for the work, but
  • does not own shares in the company
Must be insured under TyEL
Partner’s sibling who

  • owns 30% of  the company shares,
  • works in the company, and
  • is paid for the work
Must be insured under TyEL
Partner’s sibling who

  • owns 30% of  the company shares,
  • works in the company, but
  • is not paid for the work
Is left uninsured
Partner who

  • owns no more than 30% of the company shares, and
  • whose dividend yield for work done is taxed as earned income
Is left uninsured
Cooperative Earnings-related pension insurance
A member in a cooperative who

  • is in a leading position,
  • works in the cooperation,
  • owns more than 30% of the power of disposal in the cooperation, or
  • owns together with family members more than 50% of the power of disposal in the cooperation
Must be insured under YEL
Who is a family member?

If you are in a leading position in the company, persons who live with you and are in a directly descending or ascending line to you are considered your family members.

If you are a self-employed person, your married spouse, domestic or registered partner is a family member, regardless of where they live.

Self-employed or an employee?

From the point of view of the pension laws, the labour force is divided into employees and self-employed workers. The line between the two is not always clear. If you are an employee, your employer will take care of your insurance. If you are self-employed, you have to take care of it yourself.

You are an employee if you are in an employment relationship or work in the public sector as a civil servant. If you have an employment contract, you have agreed to work for someone else under their supervision and leadership and are paid for that work. The employment contract can be oral or written.

You cannot freely agree with your employer that you are or are not in an employment relationship. The matter is decided on the basis of labour law. The obligation to take out pension insurance is based on the actual nature of the work you do.

TyEL = Employees Pensions Act
YEL= Self-employed Persons’ Pensions Act
MYEL = Farmers’ Pensions Act

Leased workforce In an employment relationship with company leasing out workers
Freelancer Depending on the nature of the work and the working conditions, the freelancer is insured either under TyEL or YEL or MYEL
Temp physician As a rule, physicians doing temping jobs are on the payroll of the company that leases out workers. In that case, their pension contributions are paid by that company, the the health centre. In unclear situations, Keva will decide if the physician is in an employment relationship with the health centre. If the physician is self-employed,  they arrange their pension insurance themselves under YEL.
Professional athlete The earnings-related pension acts do not apply to professional athletes. Their pension provision is covered by a separate act.  For more information, go to Workers’ Compensation Centre.
Private family day carers Private family day carers are often considered self-employed persons if the carer takes care of several children at the home of the carer. In that case, the family day carer must take out pension insurance under YEL.