From 10ed4f9c6eb9fa7817a5cb817f466c67d3a19e04 Mon Sep 17 00:00:00 2001 From: Per Lundberg Date: Wed, 17 Apr 2024 21:24:24 +0300 Subject: [PATCH 01/11] Add individual pension insurance section Based on my own discussions and research. There are likely more options available than the ones listed here (for example Alexandria), but I know too little of it to be added at the current time. --- README.md | 20 +++++++++++++++++++- 1 file changed, 19 insertions(+), 1 deletion(-) diff --git a/README.md b/README.md index 36e216f..59e53f3 100644 --- a/README.md +++ b/README.md @@ -438,7 +438,7 @@ and if we take a 75€/hour rate, you should expect to pay at least 75-150€ pe **Source of truth**: [ETK Finnish Center for Pensions](https://www.etk.fi/en/finnish-pension-system/pension-security/pension-coverage-and-insurance/self-employed/) -**What is it?** YEL is a mandatory social security insurance for `self-employed` persons. +**What is it?** YEL _(sv: FöPL)_ is a mandatory social security insurance for `self-employed` persons. **YEL official name is very misleading** (*Self-Employed Person’s Pensions Act*), because **YEL determines your entire social security benefits**, not just your pension. For example, if you get sick, your *daily sickness allowance* is calculated based on your YEL. The more you pay for YEL, the more *daily sickness allowance* you get. @@ -484,6 +484,24 @@ Minimum YEL | Maximum YEL * [ilmarinen](https://www.ilmarinen.fi/en/) * [veritas](https://www.veritas.fi/en/) +### Buy individual pension insurance (optional) + +In addition to the YEL described above, you can also get an individual pension insurance for yourself and pay it as a business expense. The main details: (source: https://www.vero.fi/sv/Detaljerade_skatteanvisningar/anvisningar/48268/frivilliga-pensionsf%C3%B6rs%C3%A4kringar-som-arbetsgivaren-tecknat2/, Swedish) + +* The cost is tax-deductible up to 8500€ per year. Premiums above this will be taxed as personal income for you/the employee. +* The pension has to be paid out during at least 10 years of time. +* The start of payouts can happen at 70 years of age, for people born 1962 or later, or slightly earlier if you are born at an earlier date. See the linked page for more details. +* A life insurance can be included with the insurance, so that your spouse or other beneficiary can inherit the full value of the insurance you have accumulated if you die before reaching the pension age. This is an important difference from YEL and TyEL, where your accumulated pension money more or less "disappears" into the system whenever you die. +* The money in the insurance can be invested in the stock market, in various bonds which you can typically choose from yourself. The exact number and type of bonds available differ depending on insurance provider. + +Known providers at the time of writing include the following (in addition to this, Nordea has existing agreements, but are not accepting new customers at the time being). Discuss with one or more of them for the exact terms and conditions of their products. + +* LähiTapiola (LokalTapiola), information online not available in English + * [Finnish](https://www.lahitapiola.fi/yritys/vakuutukset/elakevakuutukset/yrittajan-vapaaehtoinen-elakevakuutus/) + * [Swedish](https://www.lahitapiola.fi/sv/foretag/forsakringar/pensionsforsakringar/frivillig-pensionsforsakring-for-foretagare/) +* [Mandatum](https://www.mandatum.fi/en/pension/entrepreneurs-supplementary-pension/), formerly part of the Sampo Group +* [OP](https://www.op.fi/corporate-customers/insurance/personal-insurance/corporate-pension-insurance) (Osuuspankki/Andelsbanken) + ### Understand your new personal taxation situation **Source of truth**: [Tax Administration](https://www.vero.fi/en/) From 54d6548351e7952d4b350e29fa4de764128c9828 Mon Sep 17 00:00:00 2001 From: Sam Hosseini Date: Fri, 17 May 2024 09:47:51 +0200 Subject: [PATCH 02/11] move voluntary pension section next to optional sections of the guide --- README.md | 36 ++++++++++++++++++------------------ 1 file changed, 18 insertions(+), 18 deletions(-) diff --git a/README.md b/README.md index 59e53f3..789c92b 100644 --- a/README.md +++ b/README.md @@ -484,24 +484,6 @@ Minimum YEL | Maximum YEL * [ilmarinen](https://www.ilmarinen.fi/en/) * [veritas](https://www.veritas.fi/en/) -### Buy individual pension insurance (optional) - -In addition to the YEL described above, you can also get an individual pension insurance for yourself and pay it as a business expense. The main details: (source: https://www.vero.fi/sv/Detaljerade_skatteanvisningar/anvisningar/48268/frivilliga-pensionsf%C3%B6rs%C3%A4kringar-som-arbetsgivaren-tecknat2/, Swedish) - -* The cost is tax-deductible up to 8500€ per year. Premiums above this will be taxed as personal income for you/the employee. -* The pension has to be paid out during at least 10 years of time. -* The start of payouts can happen at 70 years of age, for people born 1962 or later, or slightly earlier if you are born at an earlier date. See the linked page for more details. -* A life insurance can be included with the insurance, so that your spouse or other beneficiary can inherit the full value of the insurance you have accumulated if you die before reaching the pension age. This is an important difference from YEL and TyEL, where your accumulated pension money more or less "disappears" into the system whenever you die. -* The money in the insurance can be invested in the stock market, in various bonds which you can typically choose from yourself. The exact number and type of bonds available differ depending on insurance provider. - -Known providers at the time of writing include the following (in addition to this, Nordea has existing agreements, but are not accepting new customers at the time being). Discuss with one or more of them for the exact terms and conditions of their products. - -* LähiTapiola (LokalTapiola), information online not available in English - * [Finnish](https://www.lahitapiola.fi/yritys/vakuutukset/elakevakuutukset/yrittajan-vapaaehtoinen-elakevakuutus/) - * [Swedish](https://www.lahitapiola.fi/sv/foretag/forsakringar/pensionsforsakringar/frivillig-pensionsforsakring-for-foretagare/) -* [Mandatum](https://www.mandatum.fi/en/pension/entrepreneurs-supplementary-pension/), formerly part of the Sampo Group -* [OP](https://www.op.fi/corporate-customers/insurance/personal-insurance/corporate-pension-insurance) (Osuuspankki/Andelsbanken) - ### Understand your new personal taxation situation **Source of truth**: [Tax Administration](https://www.vero.fi/en/) @@ -678,6 +660,24 @@ Some available dental care providers: * Book your checkups and/or procedures with your dental care provider's dentist. * Either pay yourself or with your company and include the payments into your accounting. +### Buy individual pension insurance (optional) + +In addition to the YEL described above, you can also get an individual pension insurance for yourself and pay it as a business expense. The main details: (source: https://www.vero.fi/sv/Detaljerade_skatteanvisningar/anvisningar/48268/frivilliga-pensionsf%C3%B6rs%C3%A4kringar-som-arbetsgivaren-tecknat2/, Swedish) + +* The cost is tax-deductible up to 8500€ per year. Premiums above this will be taxed as personal income for you/the employee. +* The pension has to be paid out during at least 10 years of time. +* The start of payouts can happen at 70 years of age, for people born 1962 or later, or slightly earlier if you are born at an earlier date. See the linked page for more details. +* A life insurance can be included with the insurance, so that your spouse or other beneficiary can inherit the full value of the insurance you have accumulated if you die before reaching the pension age. This is an important difference from YEL and TyEL, where your accumulated pension money more or less "disappears" into the system whenever you die. +* The money in the insurance can be invested in the stock market, in various bonds which you can typically choose from yourself. The exact number and type of bonds available differ depending on insurance provider. + +Known providers at the time of writing include the following (in addition to this, Nordea has existing agreements, but are not accepting new customers at the time being). Discuss with one or more of them for the exact terms and conditions of their products. + +* LähiTapiola (LokalTapiola), information online not available in English + * [Finnish](https://www.lahitapiola.fi/yritys/vakuutukset/elakevakuutukset/yrittajan-vapaaehtoinen-elakevakuutus/) + * [Swedish](https://www.lahitapiola.fi/sv/foretag/forsakringar/pensionsforsakringar/frivillig-pensionsforsakring-for-foretagare/) +* [Mandatum](https://www.mandatum.fi/en/pension/entrepreneurs-supplementary-pension/), formerly part of the Sampo Group +* [OP](https://www.op.fi/corporate-customers/insurance/personal-insurance/corporate-pension-insurance) (Osuuspankki/Andelsbanken) + ### Consider selling your personal work-related tools to your company **Source of truth**: [Tax Administration](https://www.vero.fi/en/) From 5a8a2efe94711bcd8fe3353836a2c9c59a029744 Mon Sep 17 00:00:00 2001 From: Sam Hosseini Date: Fri, 17 May 2024 09:51:13 +0200 Subject: [PATCH 03/11] update voluntary pension section title --- README.md | 2 +- 1 file changed, 1 insertion(+), 1 deletion(-) diff --git a/README.md b/README.md index 789c92b..fdba05f 100644 --- a/README.md +++ b/README.md @@ -660,7 +660,7 @@ Some available dental care providers: * Book your checkups and/or procedures with your dental care provider's dentist. * Either pay yourself or with your company and include the payments into your accounting. -### Buy individual pension insurance (optional) +### Consider buying voluntary pension insurance In addition to the YEL described above, you can also get an individual pension insurance for yourself and pay it as a business expense. The main details: (source: https://www.vero.fi/sv/Detaljerade_skatteanvisningar/anvisningar/48268/frivilliga-pensionsf%C3%B6rs%C3%A4kringar-som-arbetsgivaren-tecknat2/, Swedish) From 76d55d6459499fef96f907460a5725383e79bc04 Mon Sep 17 00:00:00 2001 From: Sam Hosseini Date: Fri, 17 May 2024 09:53:32 +0200 Subject: [PATCH 04/11] auto-generate voluntary pension section in table of content --- README.md | 1 + 1 file changed, 1 insertion(+) diff --git a/README.md b/README.md index fdba05f..ce8c540 100644 --- a/README.md +++ b/README.md @@ -25,6 +25,7 @@ The ultimate resource for transitioning to freelancing for software developers * [Consider joining an unemployment fund](#consider-joining-an-unemployment-fund) * [Consider buying health insurance](#consider-buying-health-insurance) * [Consider getting dental care plan](#consider-getting-dental-care-plan) + * [Consider buying voluntary pension insurance](#consider-buying-voluntary-pension-insurance) * [Consider selling your personal work-related tools to your company](#consider-selling-your-personal-work-related-tools-to-your-company) * [Operation - what to do to **run** your company](#operation---what-to-do-to-run-your-company) * [Offer yourself benefits that you like](#offer-yourself-benefits-that-you-like) From 028365a2f9fbd26e1a56a7eed4977b07317bfbb9 Mon Sep 17 00:00:00 2001 From: Sam Hosseini Date: Fri, 17 May 2024 09:56:57 +0200 Subject: [PATCH 05/11] add source of truth to voluntary pension section --- README.md | 4 +++- 1 file changed, 3 insertions(+), 1 deletion(-) diff --git a/README.md b/README.md index ce8c540..05a5d18 100644 --- a/README.md +++ b/README.md @@ -663,7 +663,9 @@ Some available dental care providers: ### Consider buying voluntary pension insurance -In addition to the YEL described above, you can also get an individual pension insurance for yourself and pay it as a business expense. The main details: (source: https://www.vero.fi/sv/Detaljerade_skatteanvisningar/anvisningar/48268/frivilliga-pensionsf%C3%B6rs%C3%A4kringar-som-arbetsgivaren-tecknat2/, Swedish) +**Source of truth**: [Tax Administration](https://www.vero.fi/sv/Detaljerade_skatteanvisningar/anvisningar/48268/frivilliga-pensionsf%C3%B6rs%C3%A4kringar-som-arbetsgivaren-tecknat2/) + +In addition to the YEL described above, you can also get an individual pension insurance for yourself and pay it as a business expense. * The cost is tax-deductible up to 8500€ per year. Premiums above this will be taxed as personal income for you/the employee. * The pension has to be paid out during at least 10 years of time. From 5daf38391d94c8c8c7dec50dfcc3892dbfe0b423 Mon Sep 17 00:00:00 2001 From: Sam Hosseini Date: Fri, 17 May 2024 10:13:08 +0200 Subject: [PATCH 06/11] add what-is-it to voluntary pension section --- README.md | 2 +- 1 file changed, 1 insertion(+), 1 deletion(-) diff --git a/README.md b/README.md index 05a5d18..b4ce795 100644 --- a/README.md +++ b/README.md @@ -665,7 +665,7 @@ Some available dental care providers: **Source of truth**: [Tax Administration](https://www.vero.fi/sv/Detaljerade_skatteanvisningar/anvisningar/48268/frivilliga-pensionsf%C3%B6rs%C3%A4kringar-som-arbetsgivaren-tecknat2/) -In addition to the YEL described above, you can also get an individual pension insurance for yourself and pay it as a business expense. +**What is it?** On top of [YEL](#buy-social-security-insurance-yel), which is mandatory, you can buy *voluntary pension insurance*. * The cost is tax-deductible up to 8500€ per year. Premiums above this will be taxed as personal income for you/the employee. * The pension has to be paid out during at least 10 years of time. From 9324fb4ec0d70feb341f63368dd7ae415f239bd1 Mon Sep 17 00:00:00 2001 From: Sam Hosseini Date: Fri, 17 May 2024 10:26:21 +0200 Subject: [PATCH 07/11] add how-much to voluntary pension section --- README.md | 3 ++- 1 file changed, 2 insertions(+), 1 deletion(-) diff --git a/README.md b/README.md index b4ce795..3fff48a 100644 --- a/README.md +++ b/README.md @@ -667,7 +667,8 @@ Some available dental care providers: **What is it?** On top of [YEL](#buy-social-security-insurance-yel), which is mandatory, you can buy *voluntary pension insurance*. -* The cost is tax-deductible up to 8500€ per year. Premiums above this will be taxed as personal income for you/the employee. +**How much?** Depends on the coverage you choose. The higher the coverage, the more you pay in premiums. Premiums are a business expense and fully tax-deductible up to 8,500€/year. Above this limit, premiums will be taxed as personal income for you, the `self-employed`. + * The pension has to be paid out during at least 10 years of time. * The start of payouts can happen at 70 years of age, for people born 1962 or later, or slightly earlier if you are born at an earlier date. See the linked page for more details. * A life insurance can be included with the insurance, so that your spouse or other beneficiary can inherit the full value of the insurance you have accumulated if you die before reaching the pension age. This is an important difference from YEL and TyEL, where your accumulated pension money more or less "disappears" into the system whenever you die. From ac4e4361ef284c0845439b62b7236d3914879433 Mon Sep 17 00:00:00 2001 From: Sam Hosseini Date: Fri, 17 May 2024 10:42:53 +0200 Subject: [PATCH 08/11] add YEL comparison part to voluntary pension section --- README.md | 3 ++- 1 file changed, 2 insertions(+), 1 deletion(-) diff --git a/README.md b/README.md index 3fff48a..db7e3b5 100644 --- a/README.md +++ b/README.md @@ -669,9 +669,10 @@ Some available dental care providers: **How much?** Depends on the coverage you choose. The higher the coverage, the more you pay in premiums. Premiums are a business expense and fully tax-deductible up to 8,500€/year. Above this limit, premiums will be taxed as personal income for you, the `self-employed`. +**How does it differ from YEL?** If you die before reaching the pension age, what you've accumulated and paid for YEL goes to /dev/null and disappears. With voluntary pension insurance, you can include a life insurance, so that your spouse or some other beneficiary can inherit the full value of the voluntary pension insurance you have accumulated and paid for. + * The pension has to be paid out during at least 10 years of time. * The start of payouts can happen at 70 years of age, for people born 1962 or later, or slightly earlier if you are born at an earlier date. See the linked page for more details. -* A life insurance can be included with the insurance, so that your spouse or other beneficiary can inherit the full value of the insurance you have accumulated if you die before reaching the pension age. This is an important difference from YEL and TyEL, where your accumulated pension money more or less "disappears" into the system whenever you die. * The money in the insurance can be invested in the stock market, in various bonds which you can typically choose from yourself. The exact number and type of bonds available differ depending on insurance provider. Known providers at the time of writing include the following (in addition to this, Nordea has existing agreements, but are not accepting new customers at the time being). Discuss with one or more of them for the exact terms and conditions of their products. From c1c872c4dcdc265ad5d1550a3ce8aca7ed826643 Mon Sep 17 00:00:00 2001 From: Sam Hosseini Date: Fri, 17 May 2024 10:58:22 +0200 Subject: [PATCH 09/11] add voluntary pension details to what-is-it part --- README.md | 5 +---- 1 file changed, 1 insertion(+), 4 deletions(-) diff --git a/README.md b/README.md index db7e3b5..b4b09a4 100644 --- a/README.md +++ b/README.md @@ -666,15 +666,12 @@ Some available dental care providers: **Source of truth**: [Tax Administration](https://www.vero.fi/sv/Detaljerade_skatteanvisningar/anvisningar/48268/frivilliga-pensionsf%C3%B6rs%C3%A4kringar-som-arbetsgivaren-tecknat2/) **What is it?** On top of [YEL](#buy-social-security-insurance-yel), which is mandatory, you can buy *voluntary pension insurance*. +Payouts can start at the age of ~70 and have to be paid out during at least 10 years of time. Depending on the provider, you can typically choose what to do with the money in the insurance (invest in stocks/bonds/etc). **How much?** Depends on the coverage you choose. The higher the coverage, the more you pay in premiums. Premiums are a business expense and fully tax-deductible up to 8,500€/year. Above this limit, premiums will be taxed as personal income for you, the `self-employed`. **How does it differ from YEL?** If you die before reaching the pension age, what you've accumulated and paid for YEL goes to /dev/null and disappears. With voluntary pension insurance, you can include a life insurance, so that your spouse or some other beneficiary can inherit the full value of the voluntary pension insurance you have accumulated and paid for. -* The pension has to be paid out during at least 10 years of time. -* The start of payouts can happen at 70 years of age, for people born 1962 or later, or slightly earlier if you are born at an earlier date. See the linked page for more details. -* The money in the insurance can be invested in the stock market, in various bonds which you can typically choose from yourself. The exact number and type of bonds available differ depending on insurance provider. - Known providers at the time of writing include the following (in addition to this, Nordea has existing agreements, but are not accepting new customers at the time being). Discuss with one or more of them for the exact terms and conditions of their products. * LähiTapiola (LokalTapiola), information online not available in English From 2bbf230c2db3e09887979ffcf6b94a7ddf3eb0c1 Mon Sep 17 00:00:00 2001 From: Sam Hosseini Date: Fri, 17 May 2024 11:05:18 +0200 Subject: [PATCH 10/11] update providers part of voluntary pension section --- README.md | 3 +-- 1 file changed, 1 insertion(+), 2 deletions(-) diff --git a/README.md b/README.md index b4b09a4..5d7a84f 100644 --- a/README.md +++ b/README.md @@ -672,8 +672,7 @@ Payouts can start at the age of ~70 and have to be paid out during at least Date: Fri, 17 May 2024 11:08:43 +0200 Subject: [PATCH 11/11] remove explicit language information This is to prevent confusion for readers of the guide https://github.com/sam-hosseini/freelancing-in-finland/commit/a1fcc9b64bd7ab206e3c33e05b74da9b1ba51eab --- README.md | 4 +--- 1 file changed, 1 insertion(+), 3 deletions(-) diff --git a/README.md b/README.md index 5d7a84f..2f9118c 100644 --- a/README.md +++ b/README.md @@ -673,9 +673,7 @@ Payouts can start at the age of ~70 and have to be paid out during at least