Light entrepreneurship and social security:
What do you need to know?
Light entrepreneurship is a popular form of work that offers independence and flexibility without the bureaucracy of entrepreneurship. Many people consider light entrepreneurship as an opportunity to earn extra income or implement their own business ideas. While light entrepreneurship offers many benefits, it is also important to understand social security and how you are covered.
Social security as a light entrepreneur
When working as a light entrepreneur, you should remember that social security matters differ from those of a salaried employee and a traditional entrepreneur. As a light entrepreneur, you are not covered by an unemployment fund or the earnings-related pension system as an employee, like traditional salaried employees. Instead, as a light entrepreneur, you are classified as an entrepreneur, so you must take care of your social security yourself.
Light entrepreneurs are insured for earnings-related pensions either under the Entrepreneurs' Pensions Act (YEL) and/or the Employees' Pensions Act (TyEL), if the light entrepreneur is also employed in paid employment in addition to light entrepreneurship.
Sivutoimisen tai kokoaikaisen kevytyrittäjän tulee ottaa eläkevakuutus, jos hän laskuttaa vuodessa yli YEL-vakuuttamisen tulorajan, joka on 9 208,43e/v (v.2025).
Employment pension insurance and the entrepreneur's statutory pension insurance are statutory and provide entitlement to earnings-related social security. This means you will accrue an employment pension and can receive sickness and parental allowance. YEL insurance accrues a pension for the entrepreneur and forms the basis for the entrepreneur's other social security, such as sickness allowance and unemployment benefit.
Criteria for YEL obligation When this requirement is met, the light entrepreneur is responsible for arranging his or her own earnings-related pension security in accordance with the YEL.
Pension insurance
One of the most important social security issues for a light entrepreneur is pension insurance. As a light entrepreneur, you are responsible for your own pension insurance. You can join the Entrepreneur's Pension Insurance System (YEL) or the Agricultural Entrepreneur's Pension Insurance System (MYEL), depending on your industry.
Pension insurance is an important investment in the future, and it helps you ensure your retirement security and the right to receive an earnings-related pension as you approach retirement age.
Health, liability and accident insurance
As a light entrepreneur, you are not entitled to insurance coverage under the Health Insurance Act or the Occupational Accidents and Diseases Act in the same way as employees.
Many INVOICING SERVICE However, it offers light entrepreneurs accident and liability insurance either for a separate fee or for the price of the invoicing service fee alone, without a separate charge. Accident insurance covers medical expenses caused by accidents or injuries that occur during a work gig. Liability insurance always compensates a third party, such as your customer, in the event of an accident.
Health insurance is valid when the light entrepreneur is subject to YEL insurance. In this case, the health insurance contribution (1.87% in 2025) is deducted from the light entrepreneur in connection with payroll calculation. The health insurance contribution is a statutory payment that is paid verohallinnolle. The taxpayer pays the collected payments to Kela and the payments cover the costs of benefits such as sickness allowance, parental allowance, and paternity and maternity allowance.
Unemployment insurance
Light entrepreneurs are not entitled to traditional unemployment security for employees. If your employment situation changes and you stop light entrepreneurship, you are not entitled to earnings-related unemployment security.
Although light entrepreneurship offers flexibility and convenience, it is important to keep in mind the social security aspects. Take care of pension insurance, health insurance and accident insurance to ensure that you have comprehensive social security. Although as a light entrepreneur you do not enjoy the same social security as employees, you can still protect yourself from risks by obtaining the necessary insurance and investing in the future. With careful planning and the right insurance, you can enjoy light entrepreneurship successfully and safely.
(updated: 18.3.2025)
