1.1. Service provider: Omapaja Oy (Business ID 2399894-2) (hereinafter “Omapaja”)
1.2. Service user (hereinafter “Paja Entrepreneur”)
(1.1-1.2 hereinafter “Parties”)
2. Content of service
Omapaja provides the Paja Entrepreneur with services supporting self-employment and independent earning. The Paja Entrepreneur invoices through Omapaja’s invoicing services with the business ID of Omapaja and can also take advantage of the offered coaching services in order to develop his or her activities. Omapaja takes care of the statutory obligations related to salary payment and tax withholding and has taken out group accident and liability insurances on behalf of the Paja Entrepreneur.
3. Status of the Paja entrepreneur
Paja Entrepreneur is a self-employed professional who operates without his or her own business ID and agrees on the conditions and price of his or her work or services directly with the client. Invoices are issued through Omapaja’s invoicing service with its business ID. From a taxation point of view, a Paja Entrepreneur is a wage earner. For this reason, he or she is not obligated to keep accounting records. The Paja Entrepreneur has the right to take a helper or a substitute.
Omapaja is not the employer of the Paja Entrepreneur. There is no employment relationship between Omapaja and the Paja Entrepreneur, as Omapaja does not have the right to direct and supervise the work or services. Only assignments where no employment relationship, as defined by labor law, exists between the Paja Entrepreneur and the client can be invoiced through the invoicing service. In this case the Paja Entrepreneur works under the commission of the client and collective agreements are not applicable.
In order for the Paja Entrepreneur to remain entitled to unemployment security, the business activity invoiced through Omapaja must not prevent him or her from accepting full-time employment.
The work invoiced through Omapaja does not accumulate the employment condition of a wage earner. However, a YEL insured Paja Entrepreneur may join the entrepreneurs’ unemployment fund and accumulate the employment condition there, provided that the conditions are fulfilled. Omapaja’s staff members provide further information on the issue.
Registeration for Omapaja is cost-free and no fixed monthly fees are charged for using the service. Omapaja charges a service fee of the invoiced work and services.
The service fee is scaled to three levels: Journeyman (5%), Smith (4%) and Master (3%). 24% value added tax is added to the service fee.
- The new Paja entrepreneur is at the level Journeyman and the service fee is 5% + 24% of the VAT-free amount of the invoice of the entrepreneur.
- When the Paja entrepreneur’s invoicing reaches more than 75,000 euros (VAT 0%), the Paja entrepreneur rises to level Smith, with a service fee of 4% + VAT 24% of the VAT-free amount of invoicing.
- When the Paja entrepreneur’s invoicing reaches more than 150,000 euros (VAT 0%), the Paja entrepreneur rises to level Master, with a service fee of 3% + VAT 24% of the of the VAT-free amount of invoicing.
In calculating the service fee, the invoicing of the Paja entrepreneur for the entire time of operations is taken into account and does not reset annually. In calculating the service fee, the invoices, cash sales and other sales paid by a customer are taken into account. Internal invoices are not included in the service fee calculation.
5. Calculating the pay of the Paja entrepreneur
The gross salary of the Paja entrepreneur is calculated by deducting the costs associated with the acquisition of income and travel expenses from the VAT-free amount of the invoice. Omapaja’s service fee (3-5% + VAT 24%), health insurance contribution (0.77% + VAT 24%) and voluntary insurance premiums, if they have been subscribed to through Omapaja by the entrepreneur, are deducted from the net salary. Voluntary insurance premiums include group accident and liability insurance. Payments for insurance are; accident insurance 2% + VAT 24% and liability insurance 1% + VAT 24%. The amount of insurance is calculated from the gross salary of the entrepreneur. The service fee and insurance premiums are deductible for the personal tax of the Paja entrepreneur.
If the earned income of the Paja Entrepreneur exceeds 7799,37 euros per year, he or she is required to take out an entrepreneur’s pension insurance (YEL). Pension insurance contributions are deductible in the Paja Entrepreneur’s personal tax return. A Paja entrepreneur with a YEL insurance may also take out an entrepreneur’s voluntary accident insurance that complies with the Worker’s Compensation Act. In this case Paja Entrepreneur is not covered by the group accident insurance taken out by Omapaja, meaning that the abovementioned insurance contributions will be decreased by 2% percentage points.
Omapaja shall withhold tax from the gross wage of the Paja entrepreneur according to his or her personal tax card. If the Paja entrepreneur does not provide Omapaja with a valid tax card by the payday, the withholding rate will be 60 percent.
The appropriate VAT rate is always added to the VAT-free sum on the invoice created by the Paja entrepreneur. The VAT rate is determined by his or her trade. The Paja entrepreneur does not qualify for the VAT-exemption based on small-scale activity, as referred to in Article 3 of the VAT Act, since the turnover of Omapaja exceeds the limit of 10 000 euros.
The Paja entrepreneur has the right to deduct expenses related to the sales of the assignment in question (expenses for the production of income). He or she may also receive part of their income as tax-exempt reimbursements of expenses, which reduce the taxable sum. The Paja entrepreneur must provide Omapaja with the relevant receipts before the payday of the assignment. He or she is responsible for the validity of the reported reimbursements of expenses. The deductibility of any single purchases of over 500 euros must be discussed with Omapaja in advance.
The Paja entrepreneur needs to take into account the abovementioned expenses when agreeing on the invoicing of the work. He or she must set the price so high that, even after the expenses and contributions have been subtracted from the total sum, he or she receives a reasonable compensation for the work.
The compensation for the provided work or service that the client and Paja entrepreneur agree on is a lump sum. The Paja entrepreneur does not have a right to invoice for additional expenses, such as overtime work, sick leave, work-related travel or use of own tools, unless agreed in advance.
The payment is made to the Paja entrepreneur’s bank account after the client has paid their invoice to Omapaja. The Paja entrepreneur may choose the date when he or she wishes to receive the salary payment by notifying Omapaja.
6. Liability of Omapaja
Omapaja is responsible for keeping records of the income and expenditure and the payroll of the Paja entrepreneur, as well as paying the salary, withholding the tax, taking care of the employer’s social security contributions and VAT payments and making the related notifications.
If the Paja entrepreneur has taken out accident insurance through Omapaja, he/she has been insured by Omapaja with group accident insurance, which covers accidents occurring in work that is invoiced through Omapaja. The amount insured is 5,000 euros for treatment costs, 25,000 euros for death and 30,000 euros for permanent harm. In addition, the insurance company pays a daily allowance of 40 euros after the three-day deductible period for a short-term (less than one year) disability to work caused by the accident.
If the Paja entrepreneur has taken out a liability insurance through Omapaja, his/her operations are insured with legal insurance and liability insurance up to 1,000,000 euros. The insurance indemnifies for any personal and property damage to the assignee or third party in accordance with the valid insurance terms and conditions. As a rule, the deductible for damages is 500 euros. The listing of the branches covered by liability insurance can be made available on request. The insurance does not cover damage caused by unprofessional work.
7. Liability of Paja entrepreneur
The Paja entrepreneur is liable for his or her activity and the possible damages caused by it. Omapaja is not liable for the end product, nor is there any contractual relationship between the client and Omapaja. The Paja entrepreneur shall follow occupational safety regulations in his or her work. The Paja entrepreneur settles any disputes regarding the assignment directly with the client.
If the profession of the Paja entrepreneur requires permits, the Paja entrepreneur must present them to Omapaja before commencing the work.
Any property rights, copyrights and other rights to the trademarks, trade names, product and operating models and inventions that the Paja entrepreneur has created while working with Omapaja belong to the Paja entrepreneur.
The Parties shall not to disclose any confidential information of the other party to a third party without consent.
10. Validity of the agreement
The Agreement is in effect until further notice. The Parties may terminate the Agreement on a 7 days’ notice. Termination does not free the parties of the obligations that have arisen during the validity period of the Agreement.