YEL instructions for part-time business owners

The increased popularity of part-time entrepreneurship is apparent in pension providers’ customer service offices.

“The most frequent question is how to define the business owner’s labour contribution and, via that, their YEL income,” says Harri Kangaskoski, Director of Insurance at Elo.

A part-time business owner’s labour contribution is defined on the same basis as for other business owners: the labour contribution must match a reasonable salary payable for the same work as an employee. A calculator from the Finnish Centre for Pensions is used as an aid.

“As a rule, a part-time business owner’s turnover is low, at least when they’re just starting up, so the YEL income is set close to the minimum. Some might have a bigger turnover at the start, but the labour contribution is still small, maybe a few hours a week.”

Many part-time business owners are employees. Kangaskoski says a common misconception is that the pension from a salaried job is enough.

“A part-time business owner is obliged to take out YEL pension insurance. The Finnish Centre for Pensions monitors the uptake of pension policies. If a part-time business owner does not have a YEL pension insurance policy, at some point they’ll have to take one out retroactively.”

Just under a quarter of Elo’s new YEL customers are part-time business owners. The number has grown by a few per cent since 2019.

By law, a business owner must take out YEL pension insurance within six months of being deemed to be obliged to take out YEL. In terms of the YEL obligation, it does not matter whether the business owner is a sole trader or uses an invoicing company.

“For example, if a business starts trading in October and starts making money in January, it should take out YEL from January,” Kangaskoski says.

How YEL pension insurance affects part-time business owners

Does a part-time business owner have to take out YEL pension insurance?

A part-time business owner must also take out YEL pension insurance and pay YEL contributions from the time the business operations exceed the minimum level for insurance coverage. It does not matter whether the business owner runs the business part-time, on the side, seasonally, on a small scale or occasionally.

How much you pay

The payment rate is the same for full-time and part-time business owners. In 2024, the YEL contribution for business owners who are under 53 and over 62 is 24.1% and for 53–62-year-olds 25.6% of the confirmed income for YEL purposes (known as “YEL income”). The rates are the same in 2025.

The YEL contributions of part-time business owners are often lower than full-time business owners’, as the value of their labour contribution – their YEL income – is smaller. YEL pension insurance is not compulsory if the labour contribution value is below €9,010.28 or around €750 per month (as of 2024). In 2025, the minimum YEL value is €9,208.43.

Discount for first-time customers

When someone starts running their own business, they receive a 22% discount on YEL contributions. This discount is valid for 48 months. If the first period running their own business lasts less than 48 months, they can receive a discount for the unclaimed discount months in their second period running their own business.

YEL contributions tax deductible

You receive some of your YEL contributions back via taxation. You can offset your YEL contributions in full either against your own, your spouse’s or company’s taxes, if the company pays the YEL contribution.

YEL in force within six months

If a business owner takes out YEL retroactively, the policy must be backdated to the start of business operations. YEL contributions must be paid for the entire time the policy is in force. For example, if a YEL-obligated business starts up in January, the owner has six months to take out a policy retroactively from January. If the policy is taken out later than that, the business owner may be forced to pay a negligence charge, that is, an increased pension contribution, in addition to the regular pension contributions.

Source: Ilmarinen