How to Earn €3,000 Net Monthly as an Entrepreneur: The Pricing Breakdown

Wondering how much you need to charge to take home €3,000 per month as an entrepreneur in Finland? It’s not just about setting an hourly rate—taxes, insurance, and business expenses all play a role. In this article, we break down the key costs and calculations on how to earn €3,000 net monthly as an entrepreneur. Try the calculator at the bottom of the blog.

Example company and entrepreneur

A self-employed person in the service sector aims to earn a net after-tax income of €3000 per month. The entrepreneur sells his labour to his clients at an hourly or daily rate.

Customers are made up of many different clients and the entrepreneur also has to market his services. In general, the reality is not that the entrepreneur’s occupancy rate is 100%. Utilisation rate means how many hours of effective working time have been sold to customers.

The bureaucracy of running a business inevitably eats up some of the labour input, and services also have to be marketed to new customers, so this takes time away from effective working time. Of course, many entrepreneurs stretch their days into evenings and weekends in order to fill the effective working time in relation to the normal 37.5/40 hour working week.

This is how the example pay slip is made

The example assumes that an entrepreneur can sell 17 days a month of his labour to his customers. It is also assumed that the entrepreneur takes one month’s holiday per year. In this case, over 11 months, the average monthly invoice amount is €5,450, leaving a net after-tax income of around €3,000 per month. In this case, the hourly rate for services sold on an hourly basis must be at least €43 per hour + VAT.

Credit losses, i.e. customers who do not pay their bills, are always possible. They have to be covered by other sales. If the costs are higher than the invoice example, the hourly rate must be higher than calculated here.

Taking taxes into account

Taxation varies slightly depending on the municipality where the entrepreneur lives. The example assumes an income tax rate of 23%. The example does not really take into account the different types of companies.

Sole proprietors receive a 5% entrepreneur’s deduction, but on the other hand, the limited liability company form can provide entrepreneurs with various benefits in kind that are not available to sole proprietors. The result is roughly the same for a sole proprietorship and a limited liability company if the entire taxable profit of the company is taken as wages.

Impact of YEL insurance

In the example, the largest cost is the self-employed person’s pension insurance (YEL insurance). It is up to the entrepreneur to decide the level of his/her income for the YEL insurance. The cost of YEL insurance at different levels of income can be calculated using a calculator on Ilmarinen’s website, for example.

It is possible to increase the entrepreneur’s residual income by reducing the level of YEL insurance income from work, which means that fewer premiums are paid. In this case, however, you will eat into your future pension. Of course, there are many ways to save for your retirement and YEL insurance is not the only option for retirement security. However, YEL insurance is compulsory for self-employed persons, so the minimum contribution is the minimum you have to pay each year.

Calculation: what will you be left with?

When pricing professional services, price information on competing operators is usually available on the market. You can then set your own prices according to the market price. It is still important to understand your own cost structure. A calculation helps you work out how much you need to charge to reach your desired income level. Expert services are usually only paid for the hours of attendance, so preparation and travel time, for example, are often paid for by the client.

Want a calculation with your own numbers? Contact us and the Valjas team can help you with profitability calculations, pricing or budgeting, for example.