YELjärjestelmää

YELjärjestelmää, short for Yrittäjän eläkevakuutusjärjestelmä, is the Finnish earnings-related pension system for entrepreneurs. It mandates that self-employed individuals and entrepreneurs contribute to their own pension. The system is administered by Finnish pension providers, such as Ilmarinen, Varma, and Elo.

The YEL contribution is based on the entrepreneur's YEL income, which is defined as the estimated annual amount of wages that the entrepreneur would have to pay to a hired employee to perform the same work. The contribution rate fluctuates and is set by law, with a portion paid by the entrepreneur and another portion potentially deductible for tax purposes. The YEL income affects not only pension accrual but also eligibility for social security benefits like daily sickness or parental allowances.

The purpose of YELjärjestelmää is to ensure that entrepreneurs have a sufficient retirement pension and social security coverage during their working lives, similar to employees covered by the earnings-related pension system. It is a compulsory insurance, and failure to comply can lead to penalties and retroactive contributions. The Finnish Centre for Pensions (Eläketurvakeskus) oversees the system and provides guidance.