Micro-business and unemployment: how to combine them in 2024?

Self-employed entrepreneurs and unemployment: is it possible to combine the two?

As a micro-entrepreneur, you can continue to receive your monthly unemployment benefit while working as an auto-entrepreneur. A real opportunity if you're planning to set up your own business while maintaining a regular income...

Micro-entreprise is therefore the ideal status for securing the start-up of your business. By setting up an auto-entreprise, you can keep all or part of your benefits, depending on the income generated by your new activity.

What are the conditions for receiving unemployment benefit for micro-businesses?

To receive theARE (Allocation d'Aide au Retour à l'Emploi), you must meet the following conditions:

• be involuntarily unemployed;
• be registered as a job seeker with France Travail (formerly Pôle Emploi);
• reside in France ;
• be actively seeking employment;
• not have reached retirement age;
• prove you have worked at least 6 months (130 days or 910 hours) in the last 24 months if you are under 53 or in the last 36 months if you are over 53;
• not have submitted an application for business start-up or takeover assistance (ARCE).

People in transition from salaried employment to micro-enterprise must also check their eligibility to maintain their ARE rights.

Finally, to qualify for ARE, you must update your situation every month with France Travail (formerly Pôle Emploi), declaring the income generated by your activity.

How do I qualify for unemployment benefit for micro-businesses?

Declaring the creation of your micro-business to France Travail

Have you just set up a micro-business? To maintain your ARE benefits, you need to report the creation of your micro-business to the France Travail operator, and indicate that you wish to maintain your benefits in full. It is also crucial to declare your sales to Pôle Emploi every month to continue receiving ARE.

But what if I set up my own business before registering with France Travail? If you've already started your own business before the end of your contract entitling you to unemployment benefit, you're probably in a "retained activity" situation.

If you are in this situation :

• you can combine all the income from your auto-entrepreneur activity with your allowance (ARE);
• you are not eligible for the Aide à la reprise et à la création d'entreprise (ARCE).

Update your situation with Pôle Emploi (now France Travail)

Then, to receive your back-to-work allowance (ARE), you need to update your situation every month on the France Travail website. In other words, you need to continue transmitting your income as a micro-entrepreneur to maintain your entitlement to monthly unemployment benefits.

However, France Travail does not take into account the frequency of your URSSAF declarations. So, if you have chosen to declare your sales on a quarterly basis, you will still need to update France Travail on a monthly basis.

How is ARE calculated for micro-businesses?

Once you've declared your income from your auto-entrepreneur activity, France Travail calculates your unemployment benefit. The ARE return-to-work benefit is calculated on the basis of your declared income. To find out the exact amount of your ARE, perform the following calculation:

• define the basis for calculating your ARE ;
• calculate your daily reference salary (SJR);
• calculate your daily ARE ;
• determine the final amount of your unemployment benefit.

Step 1: Define the basis for calculating your ARE 

The basis for calculating your ARE is the sales figure you have declared, less a flat-rate allowance applied by France Travail. This allowance varies according to the nature of your business and corresponds to :

• 71% for purchase/resale and housing supply activities ;
• 50% for service activities ;
• 34% for the self-employed.

In other words, the basis for calculating ARE is : Sales - Flat-rate allowance.

This is the basis on which your unemployment benefit will be calculated. It's important to know the criteria for receiving benefits as a microentrepreneur.

Step 2: Calculate your daily reference salary (SJR) 

Your daily reference salary (SJR) corresponds to your remuneration over the last two years prior to the end of your employment contract.  

The calculation of the SJR is therefore as follows: remuneration for the last 2 years / number of calendar days between the first and last day of this period.

Let's take an example:

You received total remuneration of €40,500 over the 2 years preceding the end of your employment contract. Between the first and last day of this period, 730 calendar days have elapsed. Your daily reference salary is €55.47 (40,500 / 730). 

Step 3: Calculate your daily ARE

There are two possible calculations for calculating your daily ARE:

• 40.4% of your daily reference salary (SJR) + a fixed portion of €12.95 or ;
• 57% of your RLS.

The highest amount should be selected, the aim being to take into account your salary level and pay you the most advantageous allowance in your situation.

Please note, however, that the amount of the daily ARE is limited. In 2024, it may not be less than €31.59 and may not exceed a ceiling equal to 75% of your daily wage.

Let's go back to our example:

• (40,4 % x 55,47) + 12,95 = 22,40 € + 12,95 = 35,35 ;
• 57 % x 55,47 = 31,61 €.

The first calculation is the most favorable. The daily ARE is therefore €35.35.

Step 4: Determine the final amount of your unemployment benefit

To determine the final amount of your monthly allowance, you need to take into account the income from your auto-entrepreneur activity, including that of micro-entrepreneurs.

The final amount of the ARE is calculated on the basis of the monthly ARE you would have received without working, minus 70% of the gross monthly salary earned from your new activity.

In other words, France Travail deducts 70% of the gross monthly salary you earn from your job, before subtracting your ARE.

Let's go back to our example

You are a self-employed professional and have declared sales of €1,600 for the month of February 2024.

Monthly ARE received = €35.35 x 30 days = €1,060.5

The gross monthly salary is calculated as follows (sales - allowance): 1,600 - 34% = 1,600 - 544 = €1,056

Next, subtract 70% of the gross monthly salary: €1,056 - (1,056 x 0.7) = 1,056 - 739.2 = €316.8

Partial ARE = €1,060.5 - €316.8 = €743.7

In addition to the income from your job, you will therefore receive €743.7 in unemployment benefit.

ARCE, an alternative for unemployed auto-entrepreneurs

ARCE (Aide à la reprise ou à la création d'entreprise) is a financial aid scheme that pays out part of the remainder of your unemployment benefit in the form of a lump sum. In other words, when you set up your micro-business, you can choose to receive your compensation in the form of a lump sum, rather than a monthly allowance.

ARCE allows you to receive a payment of 60% of the amount of benefits still to be paid. The payment is made in 2 instalments:

• a first payment, corresponding to half the aid, when you start your business;
• a second payment 6 months later, provided you are still in business.

Let's take an example:

From January 1, 2024, you receive an ARE of €40 per day for 700 days. You decide to start your own business on February 1, 2024. You still have a balance of 669 days (700 - 31 days). The remaining amount of benefits due in the form of a lump sum will be (€40 x 669 days) X 0.60 = €16,056.

Please note, however, that if you opt for ARCE, you will lose your ARE benefits for good.

Is a micro-entrepreneur entitled to unemployment insurance?

As an auto-entrepreneur, if you decide to cease your activity, you are in principle not entitled to unemployment benefits, as you are not contributing.

In practice, however, if you lose your self-employed activity involuntarily and definitively, you may be entitled to an allowance for self-employed workers (ATI). The amount of this benefit is based on your income from your activity over the 2 calendar years prior to its cessation. It ranges from €600 to €800 per month and is limited to 6 months (182 days).

So don't wait any longer to set up your micro-business! There's plenty of support available to help you launch your project and get your business off to a flying start.