If I become an entrepreneur, who will take care of my pension and unemployment security?
This article is meant for OP Light Entrepreneur users with Business ID.
Entrepreneurs are responsible for their own pension cover by taking out YEL insurance. In addition to pension cover, the YEL insurance also affects the entrepreneur’s social security
Your YEL income affects the following key benefits:
Sickness allowance
Your YEL income determines the amount of sickness allowance paid by Kela.
Unemployment security
An entrepreneur can get Kela basic unemployment allowance or, as a member of an unemployment fund, earnings-related daily unemployment allowance, if their YEL income in 2023 is at least €14,088.
Parental allowance
YEL insurance is used to calculate the amount of Kela maternity, special maternity, paternity and parental allowance, and partial parental allowance.
Old-age pension
An entrepreneur’s pension is accrued on the basis of YEL earnings.
In addition, your YEL income affects the amount of your survivors’ pension and disability pension. If you wish, you can also apply for a partial early retirement pension or a years-of-service pension.
It is up to the entrepreneur to take care of their own unemployment security. Unemployment security experts can be found at the TE Office's unemployment security advice service. We encourage all users of our service to find out about pension and unemployment security before becoming an entrepreneur. The aim of this service is to make the everyday life of an entrepreneur as easy as possible.
If you need more information on unemployment security, please visit the website of JobMarket (former TE services) and section 5 of chapter 2 of the Unemployment Security Act (in Finnish)
In the event of illness or injury, the entrepreneur is paid a daily allowance based on their YEL earnings. In other words, if the entrepreneur has only paid themself a small pension, they will receive a lower allowance in the event of illness or injury than if they had set their YEL income at a higher level.
The service also offers the entrepreneur voluntary insurances such as accident, liability and property insurances. There is a dedicated team at Pohjola Insurance for users of the service, which will survey the insurances needed by the entrepreneur.