What is the KuEL contribution?

This article is meant for OP Light Entrepreneur users with Business ID.

The guidelines for municipal pension insurance have changed 1.1.2017, and thereupon entrepreneurs must accumulate pension cover for all work commissioned by a municipality. If your client is a municipality or a municipally-owned operator, you must have a valid self-employed person's pension insurance. If a municipality orders goods or services from a company or private trader, they must always be provided with a valid YEL certificate. For more information on YEL insurance, see our article Entrepreneur’s insurance cover.

When do I pay KuEL contribution?

If your business operates on a smaller scale and you do not have a valid YEL insurance, the municipality has an obligation to withhold a contribution under the Local Government Pensions Act (KuEL) from the amount to be invoiced. In this situation, the invoice is paid through the payroll process and the KuEL contribution is deducted by the payer in accounting.

How much is the KuEL contribution in 2024?

For those aged under 53 and over 63, the KuEL contribution is 7.15% of the invoice’s VAT-free amount. For those aged 53-62, the KuEL contribution is 8.65% of the invoice’s VAT-free amount.

My client is a municipality and I don't have YEL insurance, how is the KuEL contribution handled?

When you receive a payment on your invoice from a municipality or other public sector, you should contact our customer service. Payments from which the KuEL contribution has been deducted are not automatically matched on the invoice. Here are instructions on how to proceed:

  1. Ask your customer for a payslip or other proof of payment for the paid invoice.
  2. Inform us in the customer service chat which invoice it is and submit the payslip to us in the chat.
  3. We receive the payment from your customer in accordance with your invoice to our customer asset account with the KuEL contribution deducted, usually without reference. We process the payment manually and register it to your invoice. We also handle processing the KuEL contribution in your accounts.
  4. You will receive your share of the payment with taxes and fees deducted in your bank account within a few business days.

If you are a pensioner, you must provide the municipality with a certificate of your valid pension.

If you sell services to a municipality or other public operator, please contact the municipality for more information on the KuEL contribution and how it is calculated.