Entrepreneurs’ social security

Nowadays, an entrepreneur has the right to almost all the same social benefits (sickness, unemployment, parental benefit) as employees are.

However, there are still differences when it comes to business owners’ social security status. Some of them are intrinsic to the nature of running a business. However, there are grounds for tackling many grievances.

Business owners’ contributions to their social security and the benefits they receive in exchange do not always match. If a business owner makes the lowest permitted pension contributions, he or she does not accrue any earnings-linked social security. Instead, the business owner is only entitled to basic assistance.

Basic assistance is funded by taxation. Part of social security funding is tied to paid employment: there, the employer contributes the majority of the social security payment, and the employee pays a small share. However, business owners, with rare exceptions, are responsible for funding their earnings-linked social security benefits in full.

Social security legislation in general should aim towards a single, harmonized definition of an “entrepreneur”. This would ease people’s awareness of their own status and equip them as best as possible for life changes. Suomen Yrittäjät believes that one way to do so would be to use the best-known definition and recognize as an entrepreneur anyone who paid the minimum pension insurance (YEL) contribution.