The self-employed, sole traders, entrepreneurs – in short, those who have decided to take responsibility for their earnings into their own hands. But what if a situation arises that makes it impossible for them to continue working, either temporarily or in the long term? Are self-employed workers entitled to unemployment benefits? And when can an entrepreneur receive sick leave? These are not the only questions answered in the article on support for sole traders.
Support for the self-employed (self-employed) is a frequently discussed topic, as the conditions and entitlements for this group of earners differ from those for employees. Self-employed workers are also entitled to sickness benefit and, in certain cases, unemployment benefit. Let’s take a look together at when self-employed workers are entitled to these benefits and how unemployment benefits are calculated for self-employed workers.
Sickness insurance is voluntary for self-employed workers. Each sole trader can decide whether or not to pay it. Most self-employed people pay compulsory pension and health insurance, but only a minority pay sickness insurance, which would entitle them to sick pay if they need it.
And what is the amount of sickness benefit for sole traders? It is based on the assessment base, which is the amount on which the insurance premium is calculated. Sickness benefits are around 60% of the daily assessment base.
In addition, it should also be mentioned that self-employed workers are only entitled to sickness benefits from the 15th day of illness, while the first 14 days are without benefits. This can therefore mean some financial uncertainty for self-employed workers. In addition, they cannot carry on their trade while receiving sick leave. This is why many of them are considering whether to sign up for sickness insurance and use the benefit at all.
They don't want to reimburse your holiday?
If you work for a company as a self-employed person for a regular fee every month, you are legally entitled to four weeks of paid leave. If that employer tells you otherwise, then contact our law firm. The law is on your side and we will help you to get everything you are entitled to.
Self-employed workers are not automatically entitled to unemployment benefits. However, they can still get it under certain conditions. The most important condition, which makes most self-employed people hesitate when considering whether to receive benefits, is that they must completely close or at least discontinue their business. They must then register with the unemployment office in order to receive unemployment benefits.
Tip: Going into business? Find out what payments and levies you will have to take into account.
Registering with the Job Centre is the first step. After that, the self-employed person must submit the necessary documents, including a certificate of termination of trade. Among the documents, you will mainly need a certificate of the period of payment of insurance and the last assessment base issued by the Czech Social Security Administration. It is from this basis that benefits are calculated. You will need to fill in an application for job placement and unemployment benefit at the Job Centre. The Labour Office then assesses the application on the basis of the insurance premiums you have paid. It then determines whether and how much support the claimant can receive.
The calculation of unemployment benefits for self-employed workers differs from that for employees. Unemployment benefit is calculated on the basis of the assessment base on which the self-employed person has paid insurance premiums. You can find this out from the Czech Social Security Administration, as we write above. Generally, the amount of unemployment benefit for self-employed workers is lower than for employees. This is most often because self-employed workers pay less into the insurance. Thus, if you have been paying the minimum on your insurance premiums, count on the minimum support.
The maximum amount of support is capped, which changes annually according to the law. Therefore, self-employed workers usually receive less support than employees with a similar income.
Unemployment benefit is also used by the self-employed as a safety net, rather than as a long-term means of earning income. Moreover, the support period is limited. As is the case for employees, self-employed workers receive support for varying lengths of time depending on the age of the claimant:
The maximum possible monthly support for 2024 was CZK 24 608. This corresponds to 58% of the average wage set by the Ministry of Labour and Social Affairs.
Self-employed workers may also benefit from certain aid in other specific cases. The first of these is parental leave support. If a self-employed person stops working to care for a child, he or she can receive support at the same time in some cases. For example, if she has paid social security for a long enough period of time, she may also be entitled to support when she switches from active work to childcare. If you’re wondering what happens to sick pay for the self-employed when your child falls ill, read our article on this.
Another case is support when you move into employment. If a self-employed person decides to leave the trade and go into employment, they are only entitled to support if they leave the trade completely. Unemployment benefit therefore applies to the period when the trade is interrupted or terminated, not when the self-employed person is working as an employee and running a business at the same time.
Tip: Did you know that if you work for a company for a regular monthly amount as a self-employed person, you are entitled to paid holidays? Those who work as self-employed to save the company money on tax payments are entitled to 4 weeks paid holiday per year under EU law. Read more here.
Pay your social security and health insurance regularly. It’s important to stay one step ahead in case of illness or business closure, which means paying your relevant insurance regularly. We recommend looking at sickness insurance as protection in case of unexpected income shortfalls.
As both sickness and unemployment benefits have their limitations, it is definitely worthwhile to build up a financial reserve in case of a loss of income. As a self-employed person, you can determine the amount of reserves based on your fixed costs and the possible expected amount of sickness and unemployment benefits.
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Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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