Entrepreneur’s parental benefits
Entrepreneurs have access to the same parental benefits as wage earners. You are entitled to daily parental allowances, such as maternity, paternity and parental allowance. You are also entitled to receive child care allowances, namely child home care allowance or private day care allowance as well as flexible or partial care allowance. However, you cannot engage in business while receiving certain benefits.
As an entrepreneur, you may apply for the same daily parental allowances from Kela as wage earners. You are eligible for the allowances for your biological child and your adopted child aged under 7.
You can get maternity allowance for the duration of your maternity leave, in total for around four months before and after the birth of your child.
You can get special maternity allowance if you are unable to work before the actual maternity leave.
You can get paternity allowance for the duration of your paternity leave, which is around nine weeks at a time of your choosing after the birth of your child.
A child’s mother or father can get parental allowance for a total of around six months after the maternity leave. You can also divide this, in which case the mother and father must take the parental leave at different times.
You can receive partial parental allowance if both the mother and father are taking a partial parental leave at the same time. In this case, both parents must reduce their working time and salary by 40–60 per cent for at least two months.
Please note that as an entrepreneur, you are not entitled to apply for compensations to annual leave costs or for family leave costs.
If you are a full-time entrepreneur, the extent of your daily parental allowance is determined on the basis of your income from work under the YEL or MYEL scheme. The income for the 12 calendar months before the month preceding the start of the entitlement to the daily allowance is reviewed. In other words, there will be 1 month between the period reviewed and the start date of the daily allowance. If your income from work under the YEL or MYEL scheme has changed during the period reviewed, your average income from work will be taken into account when calculating the amount of daily parental allowance.
Please note that the wages or dividends you pay for yourself from your company have no effect on the amount of your daily allowance. If you have been in paid employment outside your company during the period under review in addition to your own business, the amount of the daily allowance will also be affected by your earned income.
If you are an entrepreneur on a part-time basis, both your wage income and the insurable income under the YEL or MYEL insurance affect your daily parental allowance.
If you are not required to take out YEL or MYEL insurance, your daily parental allowance is determined according to your annual income. Your annual income consists of your salaries, certain benefits and other income. The annual income for the 12 calendar months before the month preceding the start of the entitlement to the daily allowance is reviewed. In other words, there will be 1 month between the period reviewed and the start date of the daily allowance.
The parental allowance is typically around 70 per cent of your income. Partial parental allowance is half of the amount of the normal parental allowance.
As an entrepreneur, you may apply for the same child care allowances from Kela as wage earners.
You can get child home care allowance, if your child under 3 years of age is looked after at home instead of municipal day care. The caregiver can be the child's parent, grandparent or a hired nanny.
You can get private day care allowance if your child is looked after by a nanny that you have hired or a private day care provider. You cannot get this allowance if your child is in municipal day care. Kela pays the private day care allowance directly to the hired nanny or private day care provider.
You can get flexible care allowance for a child under 3 years if you work for 30 hours per week or less and are insured under YEL or MYEL. You can get the flexible care allowance even if your child is attending day care, for instance.
You can get partial care allowance for a child in the first or second year of school if you work for 30 hours per week or less and are insured under YEL or MYEL.
The flexible and partial care allowance can be paid to both the child’s mother and father if they take care of the child at different times. You can get the care allowance even if you live in a different household than your child.
Your opportunities for engaging in business while receiving daily parental allowance or child care allowance depend on the benefit you are getting.
If you are receiving maternity allowance or parental allowance, you can engage in business activities. However, you should take into account that if you are working on weekdays, the maternity allowance is paid at a minimum rate for the days on which you work. Working on Sundays or other holidays does not affect your maternity allowance, because maternity allowance and parental allowance is only paid for weekdays.
If you are receiving special maternity allowance, you may not engage in any business activity.
If you are receiving paternity allowance, you may not engage in business activities on weekdays. However, you can work on Sundays and other holidays, because paternity allowance is only paid for weekdays.
If you are receiving child home care allowance or private day care allowance, you may engage in business activities. However, you should note that the income you get from your business may reduce the amount of allowance you get.
If you are receiving flexible care allowance or partial care allowance, you may engage in business activities for 30 hours per week or less on average.