Why you should become a light entrepreneur?
It’s a handy way to test your idea!
Light entrepreneurship is a risk free way to test becoming self employed, for example while you are studying or working. Becoming a light entrepreneur is easy and quick. You will gain valuable experience, even if you decide not to pursue starting your own business.
When does it pay off to be a light entrepreneur?
Light entrepreneurship is best suited when you want to try out entrepreneurship without your own Y -business id. It is also suitable for a part time business. If you only have a few gig or jobs per year, light entrepreneurship is the easiest option. As a light entrepreneur you don’t have to worry about financial management or bookkeeping, but you are responsible for pricing and marketing.
Definition of light entrepreneurship
Light entrepreneurship is term used when you employ yourself by using a billing service. In other word, you can become a light entrepreneur without starting your own business. Light entrepreneurship does however, resemble being a business owner in the sense that you are responsible for various obligations.
There are degrees to light entrepreneurship as some billing services offer Y -Business ID option and others don’t. Usually light entrepreneurship refers to work done without your own Y -Business ID.
Light entrepreneurship is not an official, legally defined term, even if its use is an established practise. Usually the term refers to a situation where
- you employ yorself without employment relationship
- you work without your own Y business ID
- you bill for your services via a billing service
As a light entrepreneur you have to be aware of taxation and other responsibilities.
Light entrepreneurship from the viewpoint of different authorities
Different authorities view light entrepreneurship differently. Light entrepreneurship can affect your unemployment benefits or KELA benefits.
Always contact the proper authority in question.
From the employment agency view point all self employment without employment relationship is regarded as entrepreneurship. As a part time entrepreneur you might be entitled to adjusted daily allowance for unemployment. Whether you are a full time or part time entrepreneur is always evaluated case by case. Read more and you can also call information and guidance about unemployment security.
Unemployment security advice is a national advisory service maintained by the TE Services that provides information and answers to questions related to unemployment security 0295 020 713
Tax authority viewpoint The commonly used name “light entrepreneur” (kevytyrittäjä) applies if you are self-employed, you are in business for yourself, but you do not own a company. To do business this way means that you use an invoicing service to send invoices to your customer (that pays you for the work you do). Your customer makes its payments to the invoicing service company, which in turn pays you. However, you are the person who advertises your work performances, and you agree with your customer on the terms and conditions of your work including how much the customer will pay for it.
Invoicing service companies have different ways of operating. An invoicing service company can pay you wages or trade income. See what kind of tax card is suited for you: What kind of tax card?
In employment and social insurance legislation, individuals using an invoicing service company are usually regarded as entrepreneurs. This means that as a light entrepreneur you must take out insurance in accordance with the legislation on entrepreneur’s pension, provided that certain conditions are met. For more information, go to tyoelake.fi/en.
Do you work as a light entrepreneur or do you use a mobile application to receive job orders, such as food delivery? Answer questions to receive tailored instructions.
Pension insurance viewpoint
As a self-employed worker, you have to take out pension insurance under the Self-employed Persons’ Pensions Act within six months from the date on which you start your self-employment.
You are considered a self-employed worker if you:
- receive a grant in the arts or sciences,
- are an agricultural entrepreneur, or
- you have earnings from work without being in an employment or service relationship.
If you do self-employed work on the side (of an employment or service relationship) or if it is seasonal but meets the requirements of self-employment set out in the law, you have to take out insurance. In other words, the same rule applies if you are a small-scale self-employed person.
What is YEL? Read more about YEL
KELA viewpoint is that a light entrepreneur is self-employed, but self-employed persons are entitled to the same benefits as employees. The reported income under the YEL (Self-Employed Persons’ Pensions Act) or MYEL (Farmers’ Pensions Act) pension insurance schemes for self-employed persons affects daily allowances, unemployment allowances and pensions. Read more
Starting entrepreneurial activities during unemployment
If you are unemployed and start entrepreneurial activities lasting more than two weeks, notify the TE Office or the local government pilot of it. Your assigned expert will find out the start times of unemployment and entrepreneurial activities.
The Unemployment security advisory services of the TE Services will advise you on how your situation will affect your eligibility for unemployment security.