Entrepreneurship (FAQ)

Family members working in a family business will be considered salaried employees if they do not hold ownership or control in the company. The following are considered as the entrepreneur’s family members: spouse (also cohabitee) and any person related to the entrepreneur and living in the same household (parents, grandparents, children, grandchildren).

This means you can be part of an unemployment fund for salaried employees and get the same earnings-related unemployment security as other salaried employees. You will fulfil the employment condition after having been a member of a salaried employees’ fund in a non-owning position for at least 12 months, and at least 52 calendar weeks have been accumulated towards the employment condition in that period. The other criteria for the employment condition with regard to working hours and wages, for example, are the same as for other salaried employees.

Keep in mind, however, that if you own even a low share (more than 0%) of the family business, you are considered an entrepreneur in unemployment security.

Read more: Definition of ‘entrepreneur’ for the purpose of unemployment security

Notify the TE Office of your business activities, and also notify the KOKO unemployment fund when you submit your first daily allowance application. The TE Office will issue a labour policy statement on your business activities. This will be binding upon the KOKO fund. If you are considered a full-time entrepreneur, you will not be entitled to daily allowance. However, if your business activities are considered a secondary occupation, there is no restriction on payment of daily allowance.

The TE Office does not currently examine whether people who have been temporarily laid off are employed as entrepreneurs if the lay-off started on 16 March 2020 or later. If the lay-off continues after 1 January 2021, the TE Office will investigate the matter and provide the fund with a binding decision on the full-time or part-time nature of the applicant’s business activities. However, you will be required to notify the fund of any income from business activities.

Your earnings-related daily allowance will be adjusted according to the income from your secondary business activities. If these activities have continued for an extended period of time, your income will be considered according to the most recent confirmed taxation decision. If your most recent confirmed taxation decision does not cover at least 6 months of secondary business activities, your income and expenses from your business activities will be estimated on the basis of your bookkeeping. If your enterprise is a limited liability company, you do not need to submit your bookkeeping but instead a report on the amounts paid out of the company to you as earned income.

For further information on business activities, see Instructions for entrepreneurs and Adjustment of income from business activities and own employment.

If you accept work through a billing cooperative, you will be considered an entrepreneur for the purposes of unemployment security. If such work is considered a secondary occupation, you may be entitled to an adjusted daily allowance. The TE Office will issue a statement, binding upon the KOKO fund, as to whether you may be paid earnings-related daily allowance for the duration of your work through a billing cooperative. Contact the TE Office regarding your plans as necessary, and if you do begin such work, notify the TE Office and KOKO.

If you work through a billing cooperative, you must submit copies of agreements concerning assignments and statements of your gross income to KOKO. Your income will be adjusted over the period of the pay.

If you are receiving a daily allowance and start a business, the TE Office will issue a statement, binding upon the KOKO unemployment fund, as to whether your business activities are full-time or a secondary occupation. If you are considered a full-time entrepreneur, you will not be entitled to daily allowance. However, if your business activities are considered a secondary occupation, there is no restriction on payment of daily allowance.

Your earnings-related daily allowance will be adjusted according to the income from your secondary business activities. For further information on business activities, see Instructions for entrepreneurs and Adjustment of income from business activities and own employment.

When you go into business as a full-time entrepreneur, payment of your earnings-related daily allowance will stop. Notify the KOKO unemployment fund and the TE Office that you have become an entrepreneur. While you are an entrepreneur, you will not accrue time towards the employment condition for KOKO, and you may remain a member for no more than 18 months after beginning business activities. If you cease your business activities within 18 months of beginning them, you may again receive a daily allowance from KOKO based on the meeting of the employment condition in your earlier employment as a wage earner. In other words, payment of your daily allowance will resume as at the time when you became an entrepreneur.

As an entrepreneur, you should consider becoming a member of an entrepreneurs’ unemployment fund in order to secure your entitlement to earnings-related daily allowance beyond the first 18 months of your entrepreneurship. Entrepreneurs may turn for instance to Yrittäjäkassa (former SYT).

For further information on making the transition from wage earner to entrepreneur, see Instructions for entrepreneurs.