By 9 min read Last Updated: November 22, 2023
Guide to unemployment benefits as a self-employed person
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Your guide to unemployment benefits as a self-employed person

If you are self-employed and in the process of closing your business, or you run a business as a second job, you may be entitled to unemployment benefits.

In this guide, we dive into the new rules and conditions for unemployment benefits as a self-employed person and provide practical tips for the application process.

What is unemployment benefit?

Dagpenge, also known as unemployment benefit, is a temporary financial support that is usually granted during unemployment.

Both employees and the self-employed are eligible for unemployment benefits when they are unemployed and meet certain conditions. The monthly benefit, also known as the unemployment benefit rate, is set and paid by the unemployment insurance fund.

When am I self-employed?

Your status as self-employed depends on your role and ownership in the business.

A self-employed person is someone who has set up their own company and performs tasks for other companies or private customers on an invoice basis. As a self-employed person, you are not employed as a salaried employee, unless you are employed by a limited liability company that you are a co-owner of.

As self-employed, you don't have a fixed monthly salary, but you have full control over your business and you act as your own employer. You decide your working hours, which tasks you take on and which customers you want to work for.

New rules for unemployment benefits for the self-employed: What you need to know

The new rules for unemployment benefits for the self-employed aim to equalize the rights of self-employed and employees, as well as to modernize the unemployment benefit system to accommodate changing forms of employment.

The latest rules on unemployment benefits came into force on October 1, 2018.

Significant changes to the unemployment benefit rules include the following:

  1. Activity focus rather than personal status - Previously, a person's status as an employee or self-employed person determined their entitlement to unemployment benefits. Now it is the person's activities that are decisive, just like in the tax system.
  2. Earning unemployment benefit - Dagpenge is earned by combining A and B income and profits from self-employment. This allows those who have both an employee job and self-employment to meet the income requirement.
  3. Calculation of the unemployment benefit rate - The unemployment benefit rate is calculated by adding together A and B income and profits from self-employment. The model follows the same calculation method as for employees, based on the best 12 months within 24 months.
  4. Objective criteria for main and secondary employment - The definitions of main and secondary employment are now determined based on objective criteria instead of discretion.

These changes to the unemployment benefit system ensure a fairer assessment based on activities, creating a transparent and understandable process for both employees and the self-employed.

You can read more about the unemployment benefit law here

Who can receive unemployment benefits?

As a rule of thumb, you can receive unemployment benefits if you are registered with an unemployment fund (a-kasse) and are registered as unemployed in the labor market. This means that if you are self-employed, you can also receive unemployment benefits as long as you run your business as a second job.

If you run a business as your main occupation, that is, if your income comes exclusively from your business, you need to close your business first in order to qualify for unemployment benefits.

  • Main occupation is your primary occupation - that is, where you earn the most money.
  • Secondary employment is the secondary employment that serves as an additional income alongside your main employment.

The process for unemployment benefits as self-employed

The process for unemployment benefits as a self-employed person is very much the same as for employees, with a few differences. This includes joining an unemployment insurance fund for at least one year, meeting income and employment requirements, and setting up an employment account to record hours worked.

The income requirement

To meet the income requirement, your total income over the past three years is assessed. This includes A-income, self-employed business profits and any salaried work. The income requirement means that you must:

  • Meet the income requirement of at least DKK 254,328. (applicable for 2023) within the last 3 years. This means that you can include a maximum of DKK 21,194 per month (applicable for 2023).
  • Be available for the labor market (be registered as unemployed at the job center).

The income requirement applies to self-employed people:

  1. First time receiving unemployment benefits.
  2. Not previously been unemployed.
  3. Have been unemployed previously, but are no longer entitled to unemployment benefits.
  4. Do not have saved hours in the employment account.

The employment account is a type of savings account where your paid hours are registered. Your unemployment insurance fund sets up the employment account for you and makes sure to regularly report the hours you earn from different types of work.

The employment requirement

The employment requirement requires a minimum number of paid hours within the last three years, depending on whether you are insured full-time or part-time.

If you are insured full-timeyou must meet the following conditions:

  • You must have been a member of an unemployment insurance fund for at least one year.
  • You must be registered as a job seeker at your local job center from the first day you are registered as unemployed.
  • You must have reported at least 25,328 kr. (applicable for 2023) to the income register within the last 3 years.
  • You must include A-income and B-income and profits from self-employment. However, you can include a maximum of DKK 21,194 per month (applicable for 2023).

If you are insured part-time, you must fulfill the following conditions:

  • You must have been a member of an unemployment fund for at least one year.
  • You must be registered as a job seeker at your local job center from the first day you are unemployed.

- You must have reported at least 169,548 kr. (applicable for 2023) and the maximum monthly inclusion is DKK 14,129 (applicable for 2023).

Calculating unemployment benefits for the self-employed

The calculation of unemployment benefits for the self-employed is different than the rates for regular employees. There are basically three ways in which the calculation is done - these are explained below.

  1. Self-employed people can receive unemployment benefits equivalent to 90% of their previous income. The maximum monthly amount is set at DKK 19,728 (2023) for full-time insured members. This calculation takes into account the individual's financial situation.
  2. Unemployment benefits are calculated based on the 12 months with the highest income within the last 24 months prior to the onset of unemployment. This gives a realistic picture of your finances just before unemployment.
  3. If you only have income from self-employment, the unemployment benefit is calculated as an average of the two years with the highest taxable profit before interest and other financial items. This covers the last 5 completed income years before the onset of unemployment. A-income from companies where the owner has a decisive influence is included in the calculation.

Supplementary unemployment benefits as a second job

If you are self-employed as a second job, you can receive unemployment benefits for a limited period of time.

This applies even if you were running a business alongside your salaried job before you became unemployed and continue with this business as a second job.

This also applies if you start a new business during the period you receive unemployment benefits.

To be eligible for supplementary unemployment benefit, you must:

  • Be unemployed and available for the labor market.
  • Be able to take over full-time work at short notice.

You can continue to work in your company during normal working hours, but these hours will be deducted from your unemployment benefits. In addition, any profits from your business can be used to extend the period of supplementary unemployment benefit and the right to resume your unemployment benefit entitlement.

Please note that you can only receive supplementary unemployment benefit for 30 weeks within a 104-week period. After that, the right to supplementary unemployment benefit will cease.

FAQ - Frequently asked questions about unemployment benefits as self-employed

It is possible to receive unemployment benefits if you have a CVR number, but there are specific requirements depending on whether it is your main or secondary employment.

If you have a CVR number and the business is your main occupation, you must cease to be self-employed before you can receive unemployment benefits. You can cease your business by:

  • Ordinary closure
  • Sale of a business
  • Lease out of business
  • Termination with bankruptcy

If you run a business as a sideline, you can also receive unemployment benefits. However, you must be available for the labor market. The hours you work in your business are deducted from your unemployment benefit, so you receive supplementary unemployment benefit.

Yes, you can be self-employed and receive unemployment benefits if you run a business as a second job. In this case, you can receive supplementary unemployment benefits for a limited period of time. If you run a self-employed business as your main occupation, you must close the business before you can receive unemployment benefits.

One of the best solutions for self-employed people on unemployment benefits is to invoice through Factofly. You can read more about your unemployment benefit entitlement and how unemployment benefit with Factofly works here.

The unemployment benefit rate for self-employed persons is based on your company's taxable profit before interest and other financial items. When your income comes exclusively from your own business, the two years with the highest average profit are taken as the basis for calculating the unemployment benefit rate.

However, it should be noted that no more than five years are looked back when identifying the two years with the highest profits. If your company, which is owned by you, has paid out A-income and has decisive influence, this will also be included in the calculation of the income base.

However, these rules are only relevant when your business is classified as your main occupation. This ensures that the unemployment benefit rate for the self-employed accurately reflects the economic performance of the business, thus creating a fair assessment of the unemployment benefit level.

To receive unemployment benefits as a self-employed person, you must have been a member of the unemployment insurance fund for at least 1 year, have ceased personal work in the company and meet the income requirement of DKK 254,328 within 3 years. You must also be registered as unemployed on jobnet.dk, be available to the labor market and go through a waiting period of 3 weeks.

After the end of self-employment, the first 6 months is a job search period without the right to unemployment benefits when starting a new business.

By 8.6 min read Last Updated: November 22, 2023
Guide to unemployment benefits as a self-employed person

Your guide to unemployment benefits as a self-employed person

If you are self-employed and in the process of closing your business, or you run a business as a second job, you may be entitled to unemployment benefits.

In this guide, we dive into the new rules and conditions for unemployment benefits as a self-employed person and provide practical tips for the application process.

What is unemployment benefit?

Dagpenge, also known as unemployment benefit, is a temporary financial support that is usually granted during unemployment.

Both employees and the self-employed are eligible for unemployment benefits when they are unemployed and meet certain conditions. The monthly benefit, also known as the unemployment benefit rate, is set and paid by the unemployment insurance fund.

When am I self-employed?

Your status as self-employed depends on your role and ownership in the business.

A self-employed person is someone who has set up their own company and performs tasks for other companies or private customers on an invoice basis. As a self-employed person, you are not employed as a salaried employee, unless you are employed by a limited liability company that you are a co-owner of.

As self-employed, you don't have a fixed monthly salary, but you have full control over your business and you act as your own employer. You decide your working hours, which tasks you take on and which customers you want to work for.

New rules for unemployment benefits for the self-employed: What you need to know

The new rules for unemployment benefits for the self-employed aim to equalize the rights of self-employed and employees, as well as to modernize the unemployment benefit system to accommodate changing forms of employment.

The latest rules on unemployment benefits came into force on October 1, 2018.

Significant changes to the unemployment benefit rules include the following:

  1. Activity focus rather than personal status - Previously, a person's status as an employee or self-employed person determined their entitlement to unemployment benefits. Now it is the person's activities that are decisive, just like in the tax system.
  2. Earning unemployment benefit - Dagpenge is earned by combining A and B income and profits from self-employment. This allows those who have both an employee job and self-employment to meet the income requirement.
  3. Calculation of the unemployment benefit rate - The unemployment benefit rate is calculated by adding together A and B income and profits from self-employment. The model follows the same calculation method as for employees, based on the best 12 months within 24 months.
  4. Objective criteria for main and secondary employment - The definitions of main and secondary employment are now determined based on objective criteria instead of discretion.

These changes to the unemployment benefit system ensure a fairer assessment based on activities, creating a transparent and understandable process for both employees and the self-employed.

You can read more about the unemployment benefit law here

Who can receive unemployment benefits?

As a rule of thumb, you can receive unemployment benefits if you are registered with an unemployment fund (a-kasse) and are registered as unemployed in the labor market. This means that if you are self-employed, you can also receive unemployment benefits as long as you run your business as a second job.

If you run a business as your main occupation, that is, if your income comes exclusively from your business, you need to close your business first in order to qualify for unemployment benefits.

  • Main occupation is your primary occupation - that is, where you earn the most money.
  • Secondary employment is the secondary employment that serves as an additional income alongside your main employment.

The process for unemployment benefits as self-employed

The process for unemployment benefits as a self-employed person is very much the same as for employees, with a few differences. This includes joining an unemployment insurance fund for at least one year, meeting income and employment requirements, and setting up an employment account to record hours worked.

The income requirement

To meet the income requirement, your total income over the past three years is assessed. This includes A-income, self-employed business profits and any salaried work. The income requirement means that you must:

  • Meet the income requirement of at least DKK 254,328. (applicable for 2023) within the last 3 years. This means that you can include a maximum of DKK 21,194 per month (applicable for 2023).
  • Be available for the labor market (be registered as unemployed at the job center).

The income requirement applies to self-employed people:

  1. First time receiving unemployment benefits.
  2. Not previously been unemployed.
  3. Have been unemployed previously, but are no longer entitled to unemployment benefits.
  4. Do not have saved hours in the employment account.

The employment account is a type of savings account where your paid hours are registered. Your unemployment insurance fund sets up the employment account for you and makes sure to regularly report the hours you earn from different types of work.

The employment requirement

The employment requirement requires a minimum number of paid hours within the last three years, depending on whether you are insured full-time or part-time.

If you are insured full-timeyou must meet the following conditions:

  • You must have been a member of an unemployment insurance fund for at least one year.
  • You must be registered as a job seeker at your local job center from the first day you are registered as unemployed.
  • You must have reported at least 25,328 kr. (applicable for 2023) to the income register within the last 3 years.
  • You must include A-income and B-income and profits from self-employment. However, you can include a maximum of DKK 21,194 per month (applicable for 2023).

If you are insured part-time, you must fulfill the following conditions:

  • You must have been a member of an unemployment fund for at least one year.
  • You must be registered as a job seeker at your local job center from the first day you are unemployed.

- You must have reported at least 169,548 kr. (applicable for 2023) and the maximum monthly inclusion is DKK 14,129 (applicable for 2023).

Calculating unemployment benefits for the self-employed

The calculation of unemployment benefits for the self-employed is different than the rates for regular employees. There are basically three ways in which the calculation is done - these are explained below.

  1. Self-employed people can receive unemployment benefits equivalent to 90% of their previous income. The maximum monthly amount is set at DKK 19,728 (2023) for full-time insured members. This calculation takes into account the individual's financial situation.
  2. Unemployment benefits are calculated based on the 12 months with the highest income within the last 24 months prior to the onset of unemployment. This gives a realistic picture of your finances just before unemployment.
  3. If you only have income from self-employment, the unemployment benefit is calculated as an average of the two years with the highest taxable profit before interest and other financial items. This covers the last 5 completed income years before the onset of unemployment. A-income from companies where the owner has a decisive influence is included in the calculation.

Supplementary unemployment benefits as a second job

If you are self-employed as a second job, you can receive unemployment benefits for a limited period of time.

This applies even if you were running a business alongside your salaried job before you became unemployed and continue with this business as a second job.

This also applies if you start a new business during the period you receive unemployment benefits.

To be eligible for supplementary unemployment benefit, you must:

  • Be unemployed and available for the labor market.
  • Be able to take over full-time work at short notice.

You can continue to work in your company during normal working hours, but these hours will be deducted from your unemployment benefits. In addition, any profits from your business can be used to extend the period of supplementary unemployment benefit and the right to resume your unemployment benefit entitlement.

Please note that you can only receive supplementary unemployment benefit for 30 weeks within a 104-week period. After that, the right to supplementary unemployment benefit will cease.

FAQ - Frequently asked questions about unemployment benefits as self-employed

It is possible to receive unemployment benefits if you have a CVR number, but there are specific requirements depending on whether it is your main or secondary employment.

If you have a CVR number and the business is your main occupation, you must cease to be self-employed before you can receive unemployment benefits. You can cease your business by:

  • Ordinary closure
  • Sale of a business
  • Lease out of business
  • Termination with bankruptcy

If you run a business as a sideline, you can also receive unemployment benefits. However, you must be available for the labor market. The hours you work in your business are deducted from your unemployment benefit, so you receive supplementary unemployment benefit.

Yes, you can be self-employed and receive unemployment benefits if you run a business as a second job. In this case, you can receive supplementary unemployment benefits for a limited period of time. If you run a self-employed business as your main occupation, you must close the business before you can receive unemployment benefits.

One of the best solutions for self-employed people on unemployment benefits is to invoice through Factofly. You can read more about your unemployment benefit entitlement and how unemployment benefit with Factofly works here.

The unemployment benefit rate for self-employed persons is based on your company's taxable profit before interest and other financial items. When your income comes exclusively from your own business, the two years with the highest average profit are taken as the basis for calculating the unemployment benefit rate.

However, it should be noted that no more than five years are looked back when identifying the two years with the highest profits. If your company, which is owned by you, has paid out A-income and has decisive influence, this will also be included in the calculation of the income base.

However, these rules are only relevant when your business is classified as your main occupation. This ensures that the unemployment benefit rate for the self-employed accurately reflects the economic performance of the business, thus creating a fair assessment of the unemployment benefit level.

To receive unemployment benefits as a self-employed person, you must have been a member of the unemployment insurance fund for at least 1 year, have ceased personal work in the company and meet the income requirement of DKK 254,328 within 3 years. You must also be registered as unemployed on jobnet.dk, be available to the labor market and go through a waiting period of 3 weeks.

After the end of self-employment, the first 6 months is a job search period without the right to unemployment benefits when starting a new business.