The entrepreneur and unemployment security

Working as an entrepreneur or being self-employment may affect your unemployment benefits. Those considered self-employed are, for example, informal carers or grant recipients. Find out how your personal situation affects your unemployment security by calling TE phone services for personal customers.

The TE Services will determine whether you are an entrepreneur as referred to under the Unemployment Security Act. This assessment may not be consistent with solutions made in connection with taxation, for instance.

Self-employment is treated in the same way as entrepreneurship. The full or part-time nature of entrepreneurship or self-employment is not assessed during the first four months if you start a new business or self-employment while you are unemployed.

Issues such as the following are significant for the unemployment security system:

  • an entrepreneur's pension insurance (YEL) or farmer's pension insurance (MYEL)
  • finding employment as an entrepreneur or a private trader
  • a share of ownership in a company.

The share of ownership applies to both the shares of family members as well as ownership through a so-called intermediary company.

If you are a customer of a local government pilot on employment, your municipality of residence can also send you requests for clarification related to your business activities and being self-employed. 

Jobseekers’ services during the local government pilots

Full-time or part-time entrepreneurship and self-employment

The TE Services will first determine whether you are an entrepreneur as referred to under the Unemployment Security Act. If you are considered an entrepreneur, the TE Office will determine whether you are employed as a full-time or part-time entrepreneur. If you are neither a wage-earner nor an entrepreneur, you may be self-employed. For example, family caregivers are considered self-employed. The TE Office will determine whether your self-employment is considered full-time or part-time.

You are not entitled to unemployment benefits if you are fully employed as an entrepreneur or through self-employment. Your employment is considered full-time if the amount of work required by your business activities or your personal work input is so substantial that you cannot take on a full-time job. Only the amount of work required by the activities is crucial for determining whether you are seen as a full-time entrepreneur; the amount of income or profit obtained from the business or personal work input is insignificant.

If you are a part-time entrepreneur, the benefactor takes into account the income received from your business activities and adjusts the unemployment benefits accordingly. Income from part-time work in self-employment must be reported to the party paying the unemployment benefit.

Short-term employment as an entrepreneur and through self-employment

If you find employment under a commission contract with the maximum duration of two weeks, you will in principle retain your right to receive unemployment benefits. The unemployment benefit is adjusted based on the income you receive from the business activities.

Starting a business or self-employment during unemployment

If you start business activities lasting more than 2 weeks or start working for yourself during your unemployment period, the full or part-time nature of entrepreneurship or self-employment is not assessed during the first four months if you start a new business or self-employment. As an unemployed jobseeker, you will be granted unemployment benefits during this time. If you receive income for your business activities during the four-month period, you will be paid an adjusted unemployment benefit. Income from self-employment must be reported to the party paying the unemployment benefit who determines whether your income affects the unemployment benefit.

The assessment for whether you are a full-time or part-time entrepreneur will take place after the first four months since the start of your business activities as is the case at present. If the business activities are considered full-time, you will lose your entitlement to unemployment benefits. If the business activities are part-time, you may continue to receive unemployment benefits. This solution is only concerned with the time after the four-month period and has no retroactive effects. 

The full and part-time nature of self-employment is also assessed four months after starting activities, similarly to starting a business. Your right to unemployment benefits ends if it is assessed that the self-employment is full-time. If the self-employment is part-time, you can still receive unemployment benefits.

The evaluation utilises information on the actual workload of your business or self-employment during the first four months. If no other evidence is available of the extent of work required by your business, the decision may be based on your personal report of the workload.

If you receive unemployment benefits for the duration of being employed in your own business or self-employment, you must look for a full-time job, and your business or self-employment is not a valid reason to refuse employment or services that promote employment. Refusing a job offer or a service promoting employment may result in an unpaid time period or imposing an obligation to work.

The four-month period applies to the recipients of both unemployment allowance as well as labour market subsidy. The four-month period may start again in case of starting a new business or self-employment when:

  • you have fulfilled the condition regarding previous employment, which is the prerequisite for the unemployment allowance, and
  • maximum time for the unemployment allowance resumes.

You may not receive unemployment benefits for the same business activities or a second time.

Ceasing business activities or work and ending self-employment

When you terminate your business activities or your self-employment, the TE Services will investigate whether you meet the conditions for receiving unemployment benefits.

Full-time employment in a business may end with the termination of the company or, in some situations, once a person stops working for a company. A private trader may be entitled to an unemployment benefit after the end of commissioned work, for instance.

A family member of the entrepreneur may be granted unemployment benefits in certain situations after he or she has stopped working for the company.

The full-time employment of a self-employed person can be considered to have ended when the TE office has been reliably informed by the jobseeker that the activities no longer continue.

As a temporary measure, entrepreneurs would also be entitled to labour market support on the grounds of sudden and unforeseen decline in the demand due to the coronavirus epidemic. The decision concerns all entrepreneurs regardless of whether they engage in business as self-employed persons or in the form of a company. What is required to be eligible for labour market support: full-time employment of the entrepreneur has ended or monthly income from entrepreneurial activities is less than EUR 1,089,67 per each person engaged in it as an entrepreneur. A condition for the payment of labour market support is that a person registers with the Employment and Economic Development Office as a jobseeker and the TE Office gives a labour policy statement on his or her entitlement to labour market support to the Social Insurance Institution Kela. The act is in force until 30.9.2021. 

How to begin your job search


Your Europe logo

This website is part of the European Commission's Your Europe portal. Did you find what you were looking for? Give feedback! (