YEL 2026: contribution, work income and the new-entrepreneur reduction

Who needs YEL insurance?

You must take out YEL insurance if you are aged 18–69 and work as an entrepreneur or light entrepreneur, your activity has continued uninterrupted for at least four months, and your estimated work income is at least €9,423 per year (in 2026). The insurance is taken out from a private pension insurance company or pension fund of your choice.

According to the Federation of Finnish Enterprises, the insurance must be taken out within six months of the start of the business activity. If it is taken out later, it is made retroactively from the start of the activity. For an entrepreneur on an old-age pension, YEL is voluntary.

YEL is a different insurance from the TyEL for employees. If an entrepreneur pays wages to employees, TyEL contributions are paid on them; according to Elo, the average basic contribution for a contract employer in 2026 is 24.85% of wages. The employee's share of this is 7.30%, which is withheld from the wages.

Contribution rates 2026

In 2026 the YEL contribution is 24.4% of the confirmed work income in all age groups. Previously, those aged 53–62 paid a higher contribution, 25.6% in some years, but from the start of 2026 the contribution was unified. The pension negotiation group proposed on 6 Oct 2026 that the contribution remain at 24.4% in 2027 as well. The Ministry of Social Affairs and Health confirms the grounds in November.

YEL contributions are fully deductible in taxation, so the actual cost of the contribution is lower than the total on the invoice.

Lower limit of earned income 2026: €9,423.09 a year
Upper limit of earned income 2026: €214,000 a year
Fee: 24,4 % of work income
Starting entrepreneur's contribution: 19,032 % of work income

Starting entrepreneur discount

An entrepreneur starting up for the first time gets a 22 % discount on the YEL contribution for four years, i.e. 48 months. In 2026 the reduced contribution is 19,032 % of earnings. The discount lowers the contribution, but pension and other benefits accrue on the full earnings.

Example: if the earned income is 30 000 euros a year, the full payment is 7 320 euros and the reduced payment for a starting entrepreneur is 5 709,60 euros a year before the tax deduction.

How is work income determined?

YEL work income is not the company's profit or the salary drawn, but an estimate of the monetary value of the entrepreneur's work contribution. According to the Finnish Centre for Pensions, a good starting point is the salary that would be paid to an outsider for the same work. Work income is confirmed by your own pension provider based on an overall assessment, and it is reviewed every three years.

The online calculators of pension insurance companies give an indication, but they are only a basis for discussion. If your business changes substantially, you can ask for your work income to be changed earlier. In the discussion, it is worth stating your working hours, line of business, any employees and the situation if you have several companies.

After the 2023 legislative reform, earnings-related pension providers have reviewed the work income of old insurance policies. According to the Finnish Federation of Entrepreneurs, in the first two reviews initiated by the pension provider the work income can be raised by up to 4,000 euros at a time without the entrepreneur's consent. It is a good idea to respond to the proposal, because the entrepreneur then has an opportunity to present their own grounds.

Earned income affects social security

In addition to the pension, the level of earned income determines, among other things, the size of the sickness allowance and the parental allowance. It also affects the level of voluntary accident insurance and unemployment security. An entrepreneur's earnings-related unemployment security in 2026 requires that earned income be at least €15,481 a year.

Pension accrues each year at 1,5 % of the year's earnings. Earnings that are too low reduce the contribution now, but also reduce protection during illness, family leave, unemployment and retirement.

Payment flexibility

Without changing the earned income, according to the Federation of Finnish Enterprises an entrepreneur can pay 10–100% more than usual or 10–20% less during a calendar year. The lower payment can be used for at most three years in a seven-year period. The flexibility affects only pension accrual, not other benefits. The flexibility is agreed with your own pension insurer during the same year. Insurance Radar gathers an entrepreneur's and a household's insurance in one place.

Frequently asked questions

How much is the YEL contribution in 2026?

24,4 % of the confirmed income in all age groups. A starting entrepreneur pays 19,032 % for four years.

What is the lower limit of YEL income in 2026?

The insurance obligation begins when estimated work income is at least 9 423,09 euros a year. The upper limit is 214 000 euros.

Can you choose your YEL income yourself?

Not freely. The earnings-related pension provider confirms the work income by assessing the value of the work contribution, but the entrepreneur can present grounds and request a change.

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Sources

The article is general information and does not replace the guidance of an authority, a lawyer or an adviser. Check up-to-date information from the sources.