The amount of your earnings-related allowance is calculated on the basis of your salary, taking into account your so-called established earned income.
Income taken into account
- monthly salary or hourly wages
- bonuses paid on top of your salary (such as evening work and shift work bonuses)
- fringe benefits (such as phone benefit, car benefit, housing benefit)
- compensation for reduced working hours (so-called “Pekkanen” time off)
- annual holiday pay
- performance-related and other bonuses earned in the period on which the allowance calculation is based
Income not taken into account
- holiday bonus
- holiday compensation
- lump sum payment made at the end of an employment relationship
- performance-related and other bonuses earned in another period than the one on which the allowance calculation is based
- reduced pay during sick leave
Neither list is exhaustive.
Performance-related and other bonuses are taken into account in determining the allowance to the extent that they are paid in the same period as other established income.
The monthly pay that forms the basis of earnings-related allowance is not the same as your monthly salary, as the employee’s pension contribution (TyEL) (4.48 % in 2018) is deducted from the salary for the purposes of calculating the allowance.
The pay minus the deduction is divided by the number of working days over the six-month period (five days a week, i.e. 130 days) and multiplied by the average number of working days a month (21.5 days).
Because of the formula involving deductions and averages, the monthly pay on which your allowance is based is different from the monthly salary that you were paid.
The amount of your earnings-related allowance is not a simple percentage of your salary. The allowance consists of:
- a basic component, which equals the basic unemployment allowance paid by Kela
- and an earnings-related component, which is calculated on the basis of your pay preceding your unemployment.
You may also be paid an increased allowance or a child increase for children under 18 years of age.
The earnings-related component is 45 percent of the difference between your daily pay and the basic allowance, but 20 percent of the pay exceeding €3,078.00 (= 95 x basic component €32.40).
The allowance is calculated using the following formula:
|Earnings-related component up to income limit||45% x [(monthly pay up to €3,078.00 / 21.5) – basic component €32.40] = €49.84|
|Earnings-related component exceeding income limit||20% x [(€3,554.44 – €3,078) / 21.5] = €4.43|
|Total||€32.40 + €49.84 + €4.43|
|Amount of earnings-related allowance||€86.67|
A child increase is paid for children under 18 years of age who are in your care.
|1 child||€5.23 per day|
|2 children||€7.68 per day|
|3 or more children||€9.90 per day|
You can use the Allowance calculator for an estimate of your allowance.
You can receive an increased allowance for the duration of participation in an employment promotion service. Higher factor percentages are used in the calculation of the increased allowance than for a normal earnings-related allowance. The earnings-related component is 55 percent of the difference between your daily pay and the basic allowance, but 25 percent of the pay exceeding €3,078 (= 95 x basic component €32.40).
The increased allowance is calculated using the following formula:
|Earnings-related component up to income limit||55% x (monthly pay up to €3,078.00 / 21.5) – basic component €32.40 = €60.92|
|Earnings-related component exceeding income limit||25% x [(€3,554.44 – €3,078.00) / 21.5] = €5.54|
|Total||€32.40 + €60.92 + €5.54|
|Amount of increased allowance||€98.86|
Child increases are paid on top of the increased allowance as for a normal allowance.
Take notice of the activation model’s effect on your daily allowance
To receive your daily allowance in full amount, please note the activity obligation and the actions required from you. Further information: An applicant of earnings-related allowance must indicate being active – otherwise the daily allowance will decrease by 4,65 %
The amount of your allowance is calculated on the basis of the salary you have earned during the period that counts towards your employment condition. In other words, weeks during which you have worked at least 18 hours over a period of 26 weeks.
In the following situations, your allowance is calculated on the basis of your salary before this period:
- temporary pay reduction
- job alternation leave
- part-time child care leave
- part-time pension
- partial disability pension