The amount of earnings-related daily allowance is calculated on the basis of your pre-unemployment salary. Wages are taken into consideration for at least 6 months. The gross value of your salary is considered, i.e. before tax is deducted.
Wages are only taken into account for those weeks in which you have worked for at least 18 hours. However, if you are working as a teacher, for example, this number of hours may be lower.
The salary on which the daily allowance is based does not correspond fully to the gross salary you have received, as a percentage reduction is made that corresponds to the employee’s occupational pension and unemployment insurance premiums and the daily allowance for health insurance. In 2019 the deduction is 4.24%. The calculator takes this deduction into account, so you can enter your actual salary.
Holiday pay is not included in the salary.
The calculation of the earnings allowance takes into account factors including the basic salary paid for the work, the annual holiday pay salary component, and the salary for the notice period (NOTE! If you have waived the period of notice and received compensation instead, this compensation will not be taken into account), and various additional extras such as evening or shift work. In particular, taxable fringe benefits and reimbursement of costs are also taken into consideration.
Income that is not based on employment, capital income or other income that is not deemed to be regular are not taken into consideration when determining the earnings-related allowance. Such income includes, but is not limited to, holiday bonuses, holiday compensation, and any ancillary financial benefit paid by the employer, such as a so-called ‘Golden Handshake’.
A precise list of the salary components considered to be regular/established parts of your salary is available here.
Earnings-related daily allowance is classed as taxable income and you may want to order a tax card that takes your benefits into account so that the correct tax rate is applied. The fund records your tax rate as that which it was at the beginning of the year in relation to your salary, but the tax rate applied to your salary is increased to at least 25% when you are in receipt of earnings-related daily allowance.
The fastest way to get a new tax card is online at www.vero.fi/verokortti. You can print the tax card yourself or send it by mail to an address of your choosing. Please note that you can also send a tax card directly to your own unemployment fund via the online service.
The basic component of the earnings allowance is EUR 32.40 per day. This part of the daily allowance does not depend on your pre-unemployment wages and the full daily allowance is always at least equal to the basic component.
The earnings-related component (the amount of which depends on your wages) is then added to the basic component. The earnings-related component is 45 per cent of the difference between your daily wage and the basic component. If your monthly salary is more than EUR 3,078, the earnings-related component is 20% of the excess salary component.
If you have children under the age of 18, you can get a childcare contribution. The childcare contributions are EUR 5.23 for one child, EUR 7.68 for two children, and EUR 9.90 for three or more children.
If you participate in the Employment Promotion Service (link), you can get an additional daily allowance. The increased earnings-related component is 55 per cent of the difference between your daily pay and the basic component. If your monthly salary is more than EUR 3,078, the earnings-related component is 25% of the excess salary component.
The full earnings-related allowance including the childcare contribution can be no more than 90% of the daily pay on which the daily allowance is based. If you receive an increased earnings-related daily allowance in relation to attending a service that promotes employment, the daily allowance may not exceed the salary on which the daily allowance is based.
In any case, the earnings-related allowance cannot be lower than the basic unemployment allowance, including any childcare contribution.
If you claim other social security benefits while unemployed, they may affect your earnings-related allowance. Some benefits prevent the payment of earnings-related allowance, some reduce the full amount of the allowance, and some have no effect on the unemployment fund benefits.
Benefits that prevent the payment of earnings-related allowance include several pensions, full or partial sickness allowance, maternal, paternal or parental allowance, and rehabilitation allowance.
Benefits that reduce the amount of earnings-related allowance include partial disability pension and the early retirement pensions paid under the State Employees’ Pensions Act (valtion eläkelaki, VaEL 1295/2006). Child home care allowance for children under three years of age reduces the allowance. The reduction is based on the benefits claimed by both parents. If you claim earnings-related allowance, your partner’s child home care allowance is deducted from your allowance unless your partner cares for your child him/herself and is therefore unable to work.
The gross value of your benefits is considered, i.e. before tax is deducted.
Further information: Reducing, preventing and non-effect social benefits
If you get a part-time or gig job or are engaged in a business activity, you may still have the right to an earnings allowance. You can use the calculator to calculate the estimated impact of your work-related income or read more about it here. (Link)