Employment relationship, self-employment, entrepreneurship. For the purpose of unemployment security, who is considered an entrepreneur? What does it mean if an employer offers you billable work rather than salaried work? Being an entrepreneur does not automatically exclude you from unemployment security. In this article, we discuss the definition of an entrepreneur, entrepreneur’s eligibility for earnings-related allowance, and how to apply for the allowance.
For the purpose of unemployment security, who is considered an entrepreneur?
In terms of unemployment security, any gainful employment that is not performed in an employment or a public service relationship is considered entrepreneurship. A traditional view of an entrepreneur is someone who works in their fully or partly-owned company, i.e. under a business name, in a limited liability company or as a partner in a general or limited partnership.
Light entrepreneurship, i.e. work conducted through billing services or through most joint cooperatives, is considered entrepreneurship, even though it is often not viewed as such.
For the purpose of unemployment security, simply owning a business does not make you an entrepreneur – it is whether you work at your company or not.
What can make an entrepreneur eligible for earnings-related allowance?
You can apply for earnings-related allowance if you have ceased operations as a full-time entrepreneur, if you are a part-time entrepreneur, or if you engage in entrepreneurial activities while unemployed. If you work as an entrepreneur, your eligibility for earnings-related allowance depends on whether employment authorities consider your entrepreneurial activities full time or part time.
Part-time entrepreneurs may be eligible for full earnings-related allowance or for daily allowance adjusted with their business income. Whether you are considered a part-time or full-time entrepreneur is primarily based on the amount of work performed, not just income earned. As a rule of thumb, your entrepreneurship can be deemed part time if you have been employed as a full-time salaried worker for a minimum of six months contemporaneously with your entrepreneurial activities.
If you engage in entrepreneurial activities while unemployed, you can apply for daily allowance for the first four months of your entrepreneurship. Following this initial period, employment authorities will assess the level of employment provided by your entrepreneurship. If your entrepreneurial activities are considered part time, you can continue to apply for adjusted daily allowance.
Adjusted earnings-related allowance and entrepreneur’s income
If your entrepreneurial activities are deemed part time, you are eligible for adjusted earnings-related allowance. This means that any business income you earn is factored in when determining the amount of daily allowance you receive.
- Your income is typically based on the income stated on your latest tax decision.
- If no tax decision is yet available, information from the incomes register, income statement or other revenue and expense statement is used.
- If you perform work through a billing service, your income is subject to adjustment with the same principles that apply to other entrepreneurs.
If you become employed in a full time job or by your entrepreneurial activities for a maximum of two weeks, any income you earn is factored in when determining the amount of daily allowance you receive. Should you become employed full time for a period of more than two weeks, you are excluded from unemployment security for the duration of this period and your income will not be subject to adjustment.
Any work undertaken for a period of more than two weeks should be reported to employment authorities. Also, you should always report any entrepreneurial activities to employment authorities to ensure that we have up-to-date information available concerning your entrepreneurship or potential employment. Report this information immediately as you register as an unemployed jobseeker or when your circumstances change. This way, we can avoid unfortunate investigations after the fact and potential recovery of paid allowances.
Please note that work performed as an entrepreneur does not accrue wage-earner’s employment condition. Salaried employment is the only way to gain eligibility for wage-earner’s employment condition.
Membership
A part-time entrepreneur is eligible for A-kassa membership while working as a salaried worker.
If a salaried worker becomes a full-time entrepreneur, they may continue as a fund member for a maximum of 18 months. A full-time entrepreneur is allowed to transfer their membership over to the Entrepreneur Fund if their YEL (pension insurance for the self-employed) income or their MYEL (pension insurance for agricultural entrepreneurs) income is at a minimum of 15,128 euros per year in 2025.
For more information:
Looking for more information on entrepreneurship and unemployment security? See the instructions at our website and contact our customer service.
