Maternity, paternity or parental allowance for persons who are self-employed
The maternity, special maternity, paternity and parental allowances are all calculated in the same way.
- Examples of the payments rates for allowances
- The allowances can also be increased by certain set amounts.
For self-employed persons, the amount of the allowance is based on their taxed earnings or their most recent earnings.
If you are self-employed and were insured under the Self-Employed Persons' (YEL) or Farmers' (MYEL) Pensions Act during the tax year in question, your allowance will be determined on the basis of your insurable income from self-employment. Allowances that start in 2017 are based on insurable income earned in 2015, which is adjusted by a wage coefficient. If you were employed outside your business during the tax year, any income from that employment will be included in your taxed earnings in addition to your insurable income under the YEL or MYEL Act.
The pension provider confirms the insurable income from self-employment for a given year. Insurable income from self-employment is not the same as your own salary from self-employment. The salary you pay yourself does not affect your allowance when it is based on the YEL or MYEL insurance.
Self-employed persons who are not insured under the YEL or MYEL Act
If you are not required to take out YEL or MYEL insurance, your maternity, paternity or parental allowance is paid based on the income you have declared to the tax authorities (e.g., based on earned income or a salary). The income is multiplied by a one-year wage coefficient. If you have no earned income or salary, the allowance will be paid to you at the minimum rate.
If you are self-employed on a part-time basis (meaning that you are both self-employed and working for another employer), both your salary income and the insurable income under the YEL or MYEL insurance are taken into account when calculating your allowance.
If your income has increased by at least 20%
At your request, the allowance due to you can be calculated on the basis of the insurable income under the Self-Employed Persons’ (YEL) or Farmers’ (MYEL) Pensions Act that you have earned during the 6 months preceding the payment of the allowance, provided that such income, as annualised, is at least 20% higher than the earned income for which you were taxed. Kela will take your earnings for the 6 months immediately preceding the maternity, paternity or parental allowance period and multiply them by two to arrive at an annual income.
If you have taken out a voluntary or mandatory YEL or MYEL insurance, Kela calculates your allowance based on your insurable earned income under the YEL or MYEL Act. This means that you do not have the option of choosing whether to declare, as the 6-month income, your earned income under the pension insurance or the salary earned from self-employment. The allowance will be based on the insurable income under the YEL or MYEL Act.
Self-employed persons who are insured do not have declare their YEL or MYEL income to Kela, because the information is available to Kela from the pension providers.
If you are not required to take out YEL or MYEL insurance, your earnings from self-employment in the most recent complete accounting period (i.e., salary and share of profits) will be considered as your earned income. However, for self-employed persons working in a limited company, only the salary is considered as earned income (and not for example dividends).
Maternity, paternity and parental allowance for grant and scholarship recipients
If you have a research or arts grant or scholarship and have MYEL insurance with the Farmers' Social Insurance Institution (Mela) based on the grant or scholarship, your maternity, paternity or parental allowance is calculated on the basis of your earned income under the MYEL insurance.
If you are not required to take out insurance, your allowance is based on the taxable grant or scholarship. If your grant or scholarship is not subject to tax (for example because it is small), it is not used as the basis for calculating the allowance.