A part-time entrepreneur is an entrepreneur for whom entrepreneurship is not their main job. Usually, they also earn other income besides entrepreneurship. Thus, many part-time entrepreneurs have a job in addition to entrepreneurship. Usually, part-time entrepreneurs earn most of their income from paid employment and spend most of their working time in paid employment.
How is part-time entrepreneurship defined?
Part-time and full-time entrepreneurships are assessed by many parties, for example when unemployment is encountered by the TE Office. The TE Office makes the decision based on the amount of work entrepreneurship requires, i.e., assesses whether the jobseeker can be employed full-time in addition to his or her business.
In practice, part-time entrepreneurship can mean, for example, making and selling cupcakes under one's business name on the side of full-time work. Some enjoy part-time entrepreneurship precisely because of its part-time or seasonal nature and do not set goals to grow their business. Part-time entrepreneurship can also be a hobby and a counterweight to paid work.
In many cases, part-time entrepreneurship can also be a kind of milestone for full-time entrepreneurship. In many cases, it makes sense to try your business idea first as a part-time entrepreneur, or even as a light entrepreneur without business ID.
A part-time entrepreneur can pay taxes in advance or by using their tax card
Entrepreneurs usually pay their income tax in advance, i.e., they provide the Tax Administration with an estimate of their profit for the year. This estimate then determines how much taxes need to be paid and when.
However, there is another possibility for a part-time entrepreneur: he or she can also pay business taxes at the tax rate shown on the tax card in the taxation of paid employment. In this case, the tax rate increases, but the entrepreneur does not have to take care of declaring and paying the taxes themselves.
If you want to manage the taxes on your part-time business using the tax rate, you just need to sum up your annual salary income and the estimated business profit and apply this amount for your tax card. In this way, the income rate includes both paid employment and business income, and the correct amount of taxes are paid from your employment salary.