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YEL income calculator continues to have faults

The YEL income calculator has been repaired, but individual mistakes are still possible.

The YEL income calculator, developed in collaboration between the pension providers and the Finnish Centre for Pensions, was launched in spring 2023. Its purpose is to serve as an auxiliary tool for setting incomes for YEL pension insurance purposes, also known as YEL incomes.

Problems were found in the calculator soon after the launch. We previously reported on the issue here.

The problems in the calculator recently arose on LinkedIn, where a business owner criticized the proposed YEL income they had received. Both the sector of the business in question and the information about turnover were severely wrong.

Minna Hakkarainen, Director of Insurance Services at pension provider Ilmarinen, concedes that the calculator has been unable to consider all business owners’ situations.

“The calculator retrieves the most recent turnover information from the Tax Administration. For a serial entrepreneur, the calculator uses information about the company with the largest turnover and uses that company’s sector in the YEL income proposal.”

In these cases, the calculator’s and pension provider’s information about the sector may differ from one another. This has led to mistakes in YEL income proposals in some cases.

Calculator fixed

Hakkarainen says that in the vast majority of YEL income reviews, the calculator’s details have been correct. However, the problems have been tackled.

“A new version of the calculator was released at the end of May, and there should not be any more errors. In future, the calculator will better consider a business owner’s leading position in the company, as well as ownership information. If a serial entrepreneur is a member of the board of a company, but does not own any shares in the company, that company will not be considered in the YEL income proposal. Errors will become less frequent in future as the quality of the calculator improves.”

In future, the YEL income calculator will continue to select the company’s primary sector in cases where the entrepreneur is involved in several companies. In addition, ownership details must be found for the YEL income proposal. After that, the pension provider will decide whether the entrepreneur is liable for YEL insurance.

Hakkarainen says that the decisive factor in evaluations is whether the entrepreneur works in the company in question or whether the amount of work is so significant that the YEL obligation is fulfilled. In 2024, the minimum level of YEL income is €9,010.28. This means a minimum YEL income of €751 per month.

Typically, the YEL income requires the business owner’s view, for example in situations where they run the business part-time.

“Then, the real YEL income is often lower than the pension provider’s proposal.”

“We’ve always reached an understanding”

Last year, Ilmarinen conducted discussions related to YEL reviews with a total of 19,000 business owners. Seven per cent of them rejected Ilmarinen’s proposal.

This year, Ilmarinen is reviewing the YEL incomes of around 13,000 of its business-owner customers, whose YEL income is €25,000 or less.

“This year’s reviews show that a greater proportion of business owners had their YEL incomes at the right level than last year. We’ve reviewed over half of them, and only four per cent of them have rejected our proposals.”

Hakkarainen understands business owners’ criticism in cases where YEL incomes proposals contained errors.

“When we get the correct information from the business owner, we review them. We’ve always reached an understanding.”

Hakkarainen stresses that YEL income reviews in error cases have gone better than might appear in social media discussions.

“Errors in the calculator are of course unfortunate for individual business owners. However, we’ve noticed that business owners’ awareness of the process this year has improved.”

Hakkarainen says that the accuracy of details provided by the YEL income calculator will be reviewed again at the end of the year.

“The calculator will be reviewed again if the need arises.”

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Pauli Reinikainen