Get your business name insurance in order

Business name and YEL insurance

The YEL insurance, or self-employed person's pension insurance, forms the basis of the self-employed person's social security and pension. YEL income determines, among other things, the amount of the entrepreneur's sickness and parental allowance, unemployment benefit and pension accrual.

As a self-employed person, you do not need to take out YEL insurance immediately, but you must take out insurance when the following conditions are met:

• You have been self-employed for at least 4 months
• I am 18-67 years old
• Your 12-month income exceeds a certain threshold (€9 010,28 in 2024)

It's always up to the entrepreneur to get YEL insurance, but our customer service will be happy to advise you on any insurance-related questions.

Why YEL insurance is important

YEL insurance is compulsory for all self-employed persons who meet the above conditions. This also applies to qualifying entrepreneurs who run their business as a sideline to their studies or day job.

The YEL insurance must be taken out within six months of the date on which the conditions for the YEL requirement are met.

In practice, the entire social security of the self-employed person is based on the YEL income. Thus, the YEL insurance affects the entrepreneur:

• for the accumulation of disability, old-age or survivors' pensions
• sickness allowance
• parental benefits
• unemployment benefits

The price of your YEL insurance is determined by your YEL income. The YEL income you declare must correspond to the economic value of the work you do as a self-employed person and the salary that another equally qualified person would be paid for the same work.

Business name and VAT

Value added tax, or VAT, is a tax that is added to the price of almost every service or product and paid to the state. One of the most important differences between light entrepreneurs and self-employed persons is the way in which their rights and obligations with regard to VAT differ.

Self-employed persons are liable for VAT when their income exceeds €15 000 per year. Above this threshold, the business must account to the tax authorities for the VAT it collects. Business entrepreneurs liable for VAT can deduct the VAT from their tax liability.

A light entrepreneur, on the other hand, is not a VAT-liable business, but operates under the Y-identity of the invoicing service he uses. Therefore, the invoicing service will take care of the VAT added to the invoice amount and the light entrepreneur will not be able to deduct it for tax purposes.