Earnings-related allowance
Earnings-related allowance for the self-employed
To qualify for earnings-related allowance, a self-employed person can join unemployment fund for the self-employed. Qualifying for earnings-related allowance for the self-employed requires 15 months of self-employed work during the fund membership.
A full-time self-employed person can insure themselves against unemployment in the unemployment fund for the self-employed. Finland has one unemployment fund for the self-employed: the Entrepreneur Fund (Yrittäjän työttömyyskassa).
You are eligible for earnings-related allowance for the self-employed when:
- you are a member of the unemployment fund for the self-employed
- you have been working self-employed during your membership for at least 15 months and have insured yourself at an annual level of at least €15,481
- the self-employment has been terminated or working at the company has ended.
If your self-employment ends, immediately register as a jobseeker in the employment official’s online service. The earnings-related allowance can only be paid for the period during which the registration is valid. The employment official will also determine when the self-employment has ended.
The amount of the earnings-related allowance for the self-employed is calculated the same way as for a wage earner. However, the calculation is based on business income, and no deductions corresponding to the wage earner’s earnings-related pension and unemployment insurance contributions, or the health insurance daily allowance contributions, are made from this amount. You can calculate an estimate of the self-employed person’s allowance using the calculator available on the website of the Entrepreneur Fund.
The earnings-related allowance for the self-employed is paid for the same duration as the earnings-related allowance for wage earners. More information on the maximum duration can be found here: Duration of the earnings-related allowance. Please note that, unlike wage earners, self-employed persons are not entitled to additional days after the maximum duration.
Definition of a self-employed person under the Unemployment Security Act
Under unemployment security, persons subject to compulsory YEL or MYEL insurance are considered self-employed.
Grant recipients are an exception; they are not considered self-employed even if they have MYEL insurance.
In certain situations, part-owners of a company who are insured under TyEL and family members of self-employed persons are also considered self-employed under unemployment security.
A TyEL-insured part-owner of a company and a family member of a self-employed person is considered self-employed under unemployment security if they:
- alone own at least 15% or together with their family members at least 30% of the company in which they work in a managerial position (managing director, board member), or
- alone or together with their family members own at least 50% of the company in which they work without a managerial position (as an employee).
Termination of self-employment
Your self-employment is generally considered terminated if:
- your company has been declared bankrupt or placed into liquidation or an agreement on its dissolution has been made, or
- your company’s production and business operations have ended and you have cancelled your pension insurance for the self-employed and submitted a notification to the Tax Administration to have the company removed from the prepayment register, employer register, and VAT register, or of the interruption of self-employment.
If you are a private trader, self-employment is also considered terminated when your production and business operations have ended according to your notification, provided it is deemed reliable, or it is otherwise obvious that operations will no longer be continued, and you have cancelled any pension insurance for the self-employed.
Transition to self-employment or paid employment
When transitioning from a wage earner to self-employed, you can qualify for earnings-related allowance during your unemployment on the basis of work performed as a wage earner, if the self-employed person’s employment condition has not been fulfilled and less than 18 months have passed since the start of your self-employment. You can remain a member of the wage earners’ fund for this 18-month period or transfer to the fund for the self-employed. Please note that the self-employed person’s employment condition does not accrue as a member of a wage earners’ fund, so transferring membership to the fund for the self-employed is recommended.
When transitioning from self-employed to a wage earner, you can qualify for earnings-related allowance during unemployment on the basis of the employment condition fulfilled as self-employed, if the wage earner’s employment condition has not yet been fulfilled. When your employment relationship begins, you can remain a member of the fund for the self-employed or transfer to a wage earners’ fund. However, the wage earner’s employment condition does not accrue as a member of the fund for the self-employed, so transferring membership to a wage earners’ fund is recommended.
If you switch unemployment funds, you must join the new fund within one month of resigning from the old one in order to retain your accrued entitlement to the allowance.