Business activities

Last updated 12.12.2023

You are not entitled to earnings-related daily allowance for the period during which you are employed full-time as an entrepreneur or self-employed for an uninterrupted period of more than two weeks.

When you apply for earnings-related unemployment allowance and inform the employment authority that you will be employed by your own business, the employment authority will ask you to provide an account of the extent to which the business employs you. If you are employed full-time in your own business, you are not entitled to earnings-related daily allowance.

---

In the case of business activities, the assessment of employment falls under the remit of the employment authority. If you need any further advice in these matters, do no hesitate to contact the TE Services.

---

Full-time and part-time entrepreneurship

You are considered employed full-time if the amount of work required by your business prevents you from accepting full-time employment. In this case, you are a full-time entrepreneur and are not entitled to earnings-related daily allowance.

If your workload is lower than above, your employment in business may be considered part-time. The employment authority may also assess your employment as part-time if you have simultaneously worked for at least six months in full-time employment not related to the business activity or self-employment in question. Part-time employment in business activities does not prevent the payment of earnings-related daily allowance, but the earned income from it is taken into account in the amount of earnings-related daily allowance.

Four-month protection period

Exceptionally, you are entitled to earnings-related unemployment allowance irrespective of full-time business activities if you have started your business or self-employment while unemployed. In this situation, the employment authority refrains from assessing how much your business employs you for four months from the start of your business activities. This means that if you are unemployed, you can start a business without immediately losing your right to earnings-related daily allowance.

This period of protection is available to you once per a cycle of fulfilling the employment requirement. In other words, you cannot start a new business using the protection unless you have met a new cycle of the employment requirement after the first four-month protection period. Otherwise, there are no restrictions on the eligibility to protection. You are eligible to the protection as many times you complete the a full cycle of employment requirement.

Even though full-time business activities do not prevent the payment of earnings-related unemployment allowance during the protection period, we will take into account your earned income from business activities in earnings-related daily allowance. In this situation, we will pay you adjusted earnings-related daily allowance. Despite the protection, restrictions related to adjusted earnings-related unemployment allowance may prevent the payment of earnings-related unemployment allowance.

When you start a business, the employment authority must verify that your business activities began while you were unemployed. We can pay you earnings-related unemployment allowance only after the employment authority has given us a statement on the results of its investigation. In some situations, this may lead to some delay in the payment of your earnings-related daily allowance.

Starting a business

Unless there are grounds for another assessment, the employment authority considers that a business was started and your employment began when the company

• commenced production or economic activity;
• was entered in the VAT register;
• was entered in the prepayment register; or
• was entered in the Tax Administration’s Employer Register.

If you have been employed full-time as an entrepreneur or as self-employed, you are considered to be employed full-time until your employment in the company has ended or your business activities or your self-employment have been terminated as described below. If you are employed in full-time paid employment for at least six months at the same time with your entrepreneurial activity, your employment as an entrepreneur or as self-employed is no longer considered to be full-time.

When you stop working as an entrepreneur or self-employed

Unless there are grounds for another assessment, the employment authority will consider your employment in your business to have ended if

• your ability to work has been permanently and substantially reduced;
• you are an entrepreneur comparable to an employee whose contract has ended
• your business is seasonal and the operating season has ended

Your work ability is considered permanently and substantially impaired if you have received daily allowance under the Health Insurance Act for the maximum period, you are still unable to work in the company for health reasons and your disability pension application is pending or rejected.

You are an entrepreneur comparable to an employee if

• You participate in the work in the manner prescribed by the client
• you are in an assignment relationship with the same few clients, and
• you do not have a fixed point of purchase or sale or a similar establishment for carrying out the activity

In addition, it is required that during one year from the date of registration as a jobseeker, you have not employed any employees in an employment relationship other than occasionally to perform the work referred to above.

Your business activities are seasonal if, due to natural conditions, it is possible to engage in business activities for an average of no more than six months a year.

Termination of employment of an entrepreneur’s family member

If you work in your family member’s company, do not own the company and are not insured under the Self-Employed Persons’ Pensions Act, the employment authority will assess the termination of employment differently from what is described the above. Your employment in the company is considered to have ended if

• your ability to work has been permanently and substantially reduced
• your business is seasonal and the operating season has ended
• your employment in the company has ended and you have previously been employed full-time in business activities for a maximum of six months during the two-year review period
• your employment in the company has ended and the work was solely due to participation in a service promoting employment or practical training related to self-motivated studies
• your work has ceased due to the discontinuation of production or a similar reason
• you have been temporarily laid off full-time and at least one employee who is not a family member of the entrepreneur has been temporarily laid off or dismissed from the company for financial or production-related reasons during the reference period of one year
• work and payment of wages have been completely suspended due to fire, exceptional natural event or other similar reason, and the company also has at least one other employee who is not a family member of the entrepreneur and whose work and payment of wages have been interrupted for the same reason
• the work has ceased due to a permanent deterioration in the conditions for entrepreneurial activity, and the income generated by the business activity per person working in it is less than EUR 1,000 per month, and no one other than the entrepreneur’s family members work in the company

Closure of business activities

Unless there are grounds for another assessment, the employment authority assesses that the business activity has been closed down if

• the court has, on the initiative of the debtor or creditor, issued a decision to declare bankruptcy
• the limited liability company or cooperative has been placed in liquidation
• the dissolution of a company other than a limited liability company has been agreed upon between all partners
• Your production and economic activities have ended and you have
  • have given up pension insurance under the Self-Employed Persons’ Pensions Act or the Farmers’ Pensions Act,
  • submitted a notification to the Tax Administration to remove the company from the prepayment register,
  • submitted a notification to the Tax Administration to remove the company from the employer register, and
  • submitted to the Tax Administration either a notification to remove the company from the VAT register or to suspend business operations; or
  • on the basis of factors comparable to those mentioned above, it is apparent that the production and economic activity of the business has ceased altogether

If you are a sole trader, the employment authority may assess that your business closed down when

• according to your notification, production and economic activities have ended or otherwise it is obvious that the operations will no longer be continued, and
• have given up a possible pension insurance under the Self-Employed Persons’ Pensions Act or the Farmers’ Pensions Act

Termination of self-employment

If you have been employed full-time as self-employed, the employment authority estimates that you will continue to be employed until the time when it is evident on the basis of your notification or otherwise that the activity is no longer continued.