Obligations of a self-employed individual
A sole proprietorship (toiminimi) is the simplest business form in Finland. You and your business are legally the same entity — unlike a limited company, a sole proprietorship has no separate legal person.
What does this mean in practice?
You are personally liable for the business debts and obligations
Business income is your personal income for tax purposes
You need a Business ID (Y-tunnus) for your business activities
Statutory obligations of a self-employed individual
Bookkeeping — all income and expenses must be recorded
VAT reporting — value added tax must be reported and paid to the Tax Administration
Tax prepayment — income tax is paid in advance throughout the year
Business tax return — annual tax return for business income
Self-employed persons\u0027 pension insurance (YEL) — mandatory if your earned income exceeds EUR 9,423.09/year (2026)
What does PalkkaOnline handle on your behalf?
Bookkeeping — automatic based on invoices and expenses
VAT reporting — PalkkaOnline prepares the report, you approve it, PalkkaOnline reports and pays
Tax prepayment — PalkkaOnline withholds and pays automatically
Business tax return — PalkkaOnline prepares and submits on your behalf
Settlements — PalkkaOnline handles the money flow
What do you need to do yourself?
Send invoices through PalkkaOnline
Record expenses and add receipts
Review and approve VAT reports
Keep a driving log (if you drive for work)
Notify us if your income changes significantly (income estimate)
Obtain YEL insurance (if required)
Need help? Ask PalkkaBot or contact our customer support.