Family leave for the self-employed
As a self-employed person, you can take time off work to stay at home with your children just like employees. For the duration of your leave, Kela will pay you a parental allowance which is determined based on your YEL income. Your allowance also increases your future pension.
As a self-employed person, you can take time off work to stay at home with your children
As an entrepreneur, you are entitled to the same family leave benefits as employees: maternal leave, parental leave and child care leave. For the duration of the leave, you can receive parental allowance from Kela: maternity allowance, special maternity allowance, paternity allowance, parental allowance and partial parental allowance. In addition, you can be granted flexible care allowance if your child is under 3 years of age and your weekly working hours are on average no more than 30 hours or a maximum of 80% of normal full-time working hours. Read more about family leave on Kela’s website (Kela.fi).
Your allowance also increases your future pension. Read more about how social benefits increase your pension.
Your YEL income determines the amount of your parental allowance
Since the beginning of 2020, the parental allowances paid by Kela have been determined based on annual earnings. As a self-employed person, your annual earnings are based on the YEL income. If you work as a wage-earner outside your own company in addition to your entrepreneurial activities, the amount of your allowance is affected by both your earnings as an employee and your YEL income as a self-employed person. The annual earnings are calculated based on the earnings from the 12 calendar months preceding the calendar month when the entitlement to the benefit begins. Lisätietoja vuositulon määräytymisestä löydät Kelan sivuilta (Kela.fi).
If you apply for the parental allowance for a second time, it may be determined based on the income used as the basis for your previous parental allowance if your child’s calculated time of birth is before your youngest child turns three years.
Linda, a 32-year old entrepreneur, is having her first child and will take maternity leave on 12 December 2020. Linda’s annual earnings are calculated for the 12 calendar months preceding November, i.e. 1 November 2019–31 October 2020.
Linda’s YEL insurance can be terminated in the beginning of the maternal leave if she does not work during the family leave. When Linda returns to work, she must take out new YEL insurance. If she continued working during the family leave, the YEL insurance would be kept in force. In that case, she should adjust her YEL income to reflect her reduced work input.
YEL insurance during family leave
If you do not work during your maternity, parental or child care leave, terminate your YEL insurance.
If you work during your leave and your work input exceeds the lower limit required under the Self-Employed Persons’ Pensions Act, keep your YEL insurance in force and adjust your YEL income to reflect your reduced work input.
If you get back to self-employment after your leave, take out new YEL insurance.
If you need to stop working before your maternity leave
Sometimes you may need to stop working during your pregnancy before your maternity leave begins. In that case, always contact Kela to find out what you should do and how the possible termination of your YEL insurance will affect the size of your upcoming maternity allowance.