Amount of earnings-related allowance
When you apply for earnings-related daily allowance, we calculate the amount of earnings-related daily allowance from your earnings before unemployment or lay-off. The amount of earnings-related daily allowance is therefore based on wages paid before unemployment.
We take into account earned income for the period fulfilling the working condition. From this income, we calculate the salary on which the earnings-related daily allowance is based. This does not fully correspond to your monthly salary, because not all salary items are taken into account, a statutory deduction is made from the salary and it is calculated as a daily salary.
According to the Act, when calculating the salary on which the daily allowance is based, 60 % is deducted from the total amount of the health insurance contribution referred to in the Health Insurance Act, the employee’s earnings-related pension contribution referred to in the Employees Pensions Act and the employee’s unemployment insurance contribution referred to in the Act on the Financing of Unemployment Benefits, minus 2.68 percentage points.
In 2024, the statutory deduction amount is 3,76 %.
From the salary on which earnings-related daily allowance is based, we calculate the amount of earnings-related daily allowance.
On average, the full earnings-related allowance we pay is around 80 € per day. Such earnings-related daily allowance is paid at a monthly salary of about 3000 euros.
You can estimate the amount of your earnings-related daily allowance using our calculator.
When we pay you earnings-related daily allowance, we take into account the amount of any earned income from part-time work. Other social benefits paid to you may also reduce the amount of your earnings-related daily allowance. Before payment, we make a withholding tax, i.e. we pay taxes on earnings-related daily allowance to the tax authorities.
We pay earnings-related daily allowance for a maximum of five days during the calendar week. The amount of earnings-related daily allowance to be paid can therefore also be affected by the number of days we can pay.
The amount of earnings-related daily allowance we pay you for the entire period of unemployment depends on the length of unemployment. For this amount, you can also calculate the estimate using our calculator. The earnings-related allowance also has a maximum duration.
If your unemployment is prolonged, it is possible that the maximum duration of earnings-related daily allowance will be reached. After that, we can pay you earnings-related daily allowance only after you have fulfilled the condition regarding employment again.
Calculating the daily allowance
Earnings-related daily allowance consists of the basic amount and the earnings-related portion. The basic amount is equal to the basic daily allowance paid by Kela, i.e. 37,21 €
We calculate the earnings-related portion based on your earned income using the rules defined by law.
First, we take into account the earned income you receive for the period that meets the employment condition. We then take out the income from the earnings, which is not considered to be part of the established salary. Such income includes, for example, holiday bonus and holiday compensation. After that, we will make a statutory deduction on earned income.
What is left is the salary on which the daily allowance is based for the period fulfilling the employment condition. When we divide this salary by the number of calculated working days in a period that meets the employment condition, we receive a daily wage. The daily wage allows us to calculate the earnings-related portion.
The earnings-related portion is 45 % of the difference between the daily wage and the basic amount.
Increased earnings component
We can pay you an increased share of earnings component for the period of employment services agreed in the employment plan. We may also pay the above-mentioned increased earnings component for the period between the agreed services, if the period between these services is no more than seven calendar days.
We can pay you an increased earnings component for the period of employment-promoting services for a maximum of 200 days in total. We can start paying the increased earnings part from the beginning once you have met the working condition again.
The increased earnings component is 55 per cent of the difference between the daily wage and the basic amount. Earnings-related daily allowance with child increase may not be more than the daily salary on which the earnings-related daily allowance is based. However, the earnings-related daily allowance is always at least as much as the basic amount increased by the possible child increase and the increase portion.
With the main rule, the earnings-related portion is 45 % of the difference between the daily salary and the basic amount. When the salary per month is more than 95 times the basic amount, the earnings-related portion is 20 % for the daily wage above this limit.
The 95-fold basic component is 3 534,95 €. Up to this amount, the earnings-related portion is 45 % of the difference between the daily wage and the basic component. After the income limit, the earnings-related portion is 20 % of the daily salary above the income limit.
If your work and the earned income from it are seasonal, we will use the annual income as the basis for the daily allowance.
The work and the earned income from it are seasonal if the work can only be done at a certain time of the year due to natural conditions or for some other similar reason and if the amount of work and the earned income from the work are significantly higher than normal for this reason.
In such an annual income determination, we take into account the earned income you have received during the definition period, as well as any other personal income comparable to salary. In determining annual income, therefore, we do not deduct, for example, holiday bonus, holiday premiums or annual holiday pay, which are otherwise regularly deducted in the determination of wages based on established pay.
In determining annual income, we do not only take into account earned income, but we also take into account some social benefits, compensation for loss of earnings and other subsidies. The Government Decree lists exhaustively the benefits that are taken into account in the determination of annual income. We will only take these benefits into account to the extent that they are compulsory.
The determination of annual income is made by taking into account the income for the 12 months immediately preceding unemployment. The amount of annual income calculated per month we get by dividing the annual income by 12 and the daily wage we get by dividing the monthly income by 21.5.
Annual income determination and social benefits
In determining annual income, we take into account not only earned income but also the following social benefits
- unemployment benefit under the Unemployment Security Act
- alternation compensation according to the alternation leave act
- daily allowance under the Health Insurance Act and maternity, special maternity, paternity and parental allowance
- benefit paid by a sickness fund in accordance with the Insurance Fund Act due to illness
- Rehabilitation allowance in accordance with the Act on Rehabilitation Benefits and Rehabilitation Cash Benefits of Kela or the earnings-related pension acts referred to in the Employees Pensions Act
- daily allowance and accident pension in accordance with the Accident Insurance Act, the payment of which has ended
- daily allowance, loss of earnings compensation and disability pension in accordance with the Motor Liability Insurance Act, the payment of which has ended
- per diem allowance under the Military Injuries Act
- disability pension in accordance with the earnings-related pension acts referred to in the Employees Pensions Act, the payment of which has ended
- Adult education allowance in accordance with the Act on Adult Education Allowance
If you have a dependent child under the age of 18, you may be entitled to a child increase. The amount of the child increase for one child is 5,84 €, for two children total 8,57 € and for three or more children total 11,05 €.
The child increase is going away.Parliament has approved an amendment to the law that will abolish child increases from 1.4.2024.
Examples of the amount of earnings-related daily allowance
The salary subject to withholding for the period fulfilling the employment condition is 18 750 €. The period is 130 working days and earnings include a holiday compensation of 2 500 €.
First, we deduct from the salary (18 750 €) the holiday allowance (2 500 €). That leaves 16 250 €.
We then make a statutory deduction (3,76%), leaving the amount of 15 639 €.
We divide this amount by the number of working days included in the period (130). This gives us a daily wage of 120,30 €.
For the daily wage (120,30 €), we deduct the basic amount (37,21 €). We multiply the difference (83,09 €) by 45 per cent, in which case we get an earnings share of 37,39 €.
When we add the earnings part (37,21 €) to the basic part (37,39 €), we get an earnings-related daily allowance of 74,60 €.
18 750,00 € – 2 500,00 € = 16 250,00 €
16 250,00 € x 0,9624 = 15 639 €
15 639 € ÷ 130 = 120,30 €
120,30 € – 37,21 € = 83,09 €
83,09 € x 0,45 = 37,39 €
37,21 € + 37,39 € = 74,60 €
The salary subject to withholding for the period fulfilling the employment condition is 28 125 €. The period is 130 working days and earnings include a holiday compensation of 3 750 €.
First, we deduct the holiday allowance (28 125 €) from the salary (3 750 €). That leaves 24 375 €.
We then make a statutory deduction (3,76%), leaving the amount at 23 458,5 €.
We divide this amount by the number of working days included in the period (130 days). This gives us a daily wage of 180,45 €/day.
First, we count the earnings part up to the income limit (3 534,95 €). From the daily wage at the income limit (3 534,95 € / 21.5 days = 164.42 €/day) we deduct the basic amount (37,21 €/day) . We multiply the difference (127.21 €/day) by 45 %, in which case we get the earnings below the income limit of 57.24 €/day.
We calculate the share of the salary exceeding the income limit point by deducting the earnings from the daily salary (180,45 €/day) from the daily salary at the income limit (164,42 €/day). The difference (16,03 €/day) we multiply by 20%. Thus, the part exceeding the income limit is 3,20 €/day.
We get the amount of earnings-related allowance by adding the basic amount (37,21 €/day), the earnings part below the income limit (57,24 €/day) and the earnings part above the income limit (3,20 €/day). This is how we get the amount of earnings-related daily allowance in this example 97.65 €/day.
28 125,00 € – 3 750,00 € = 24 375,00 €
24 375,00 € x (1 – 3,76 %) = 23 458,5 €
23 329,31 € ÷ 130 day =180,45 €/day
164,42 €/day – 37,21 €/day = 127,21 €/day
127,21 €/day x 45 % = 57,24 €/day
180,45 €/day – 164,42 €/day = 16,03 €/day
16,03 €/day x 20 % = 3,20 €/day
37,21 €/day + 57,24 €/day + 3,20 €/p = 97,65 €/day
The annual work income is 20,000 € and other income to be taken into account is 5,000 €.
First, we make a statutory deduction from earned income. We then add up the reduced earned income and other income to be taken into account. We divide the sum by 12 and further by 21.5. In this way, we get a daily wage, which allows the amount of the earnings-related share and, further, the amount of the earnings-related daily allowance.
20 000 € x (1 – 3,76 %) = 19 248 €
19 248 € + 5 000 € = 24 248 €
24 248 € ÷ 12 = 2 020,67 €
2 020,67 € / 21,5 day = 93,98 €/day
93,98 €/day – 37,21 €/day = 56,77 €/day
56,77 €/day x 45 % = 25,55 €/day
37,21 €/day + 25,55 €/day = 62,76 €/day
Daily allowance according to example 1:
18 750,00 € – 2 500,00 € = 16 250,00 €
16 250,00 € x 0,9624 = 15 639 €
15 639 € ÷ 130 = 120,30 €
120,30 € – 37,21 € = 83,09
83,09 € x 0,45 = 37,39 €
37,21 € + 37,39 € = 74,60 €
Child increase for one child:
74,60 €/day + 5,84 €/day = 80,44 €/day
Child increase for two children:
74,60 €/day + 8,57 €/day = 83,17 €/day
Child increase for three or more children:
74,60 €/day + 11,05 €/day = 85,65 €/day
Recalculation of the amount of earnings-related allowance
When you meet the working condition again after becoming entitled to an earnings-related allowance, the maximum period starts again and we recalculate the amount of the earnings-related allowance. If the salary is different, the amount of the earnings-related allowance will also change.
We will not recalculate your earnings-related pay if the maximum period of the daily allowance period based on the recalculated pay would start within one year of the start of the previous maximum period and if your earnings-related pay was calculated at the start of the maximum period of the previous daily allowance period. In practice, this means that we will calculate the amount of your daily allowance at most once a year.
If you meet the working condition before the maximum period is reached, your new daily allowance will always be at least 80% of the daily allowance you were previously paid. The comparison is made with the full earnings-related daily allowance without child increases.
If the working condition has been met in a job to which you have been employed under a statutory obligation or if the employment condition has been met after you have turned 58, we will not recalculate the salary on which the earnings-related daily allowance is based, unless the salary calculated on the basis of new income data is higher than the previously determined salary.
If your working condition includes the time you have been in an employment-promoting service, we will not recalculate the salary on which the earnings-related daily allowance is based.
Income we take into account when calculating the amount of daily allowance
When we calculate the amount of your earnings-related daily allowance, we take into account the following earnings
- pay during the annual holiday period, pay during the notice period and other basic pay for work
- evening work allowance, shift work allowance, person- and task-specific allowance, circumstance allowance, Saturday and Sunday work allowance, night work increase, overtime allowance, contract base and weekday holiday allowance and other similar pay supplements and allowances
- a remuneration equal to that of the salary;
- reserve and on-call allowances
- performance-based salary such as commission, bonus and tantiemi
- taxable in-kind or staff benefit
- taxable cost compensation
- savings insurance premium paid by the employer
- the insurance premium paid by the employer for individual voluntary pension insurance insofar as it is taxable
- remuneration paid on the basis of the duties of the shop steward and the occupational safety and health representative, and remuneration paid on the basis of co-operation between the employer and employees in government agencies and institutions in accordance with the Act on Co-operation between Employers and Employees in Government Agencies and Institutions
- wages paid as pay security for which no deduction has been made in accordance with the Pay Security Act, to the extent that it would be earned income taken into account as the basis for earnings-related daily allowance paid by the employer
- service money
- compensation for work agreed to be partly or fully compensated by a daily allowance paid by a sickness fund referred to in the Insurance Fund Act, which the employee receives in lieu of a salary stipulated by law or agreed in a collective agreement or other agreement
- compensation for work agreed to be partly or fully reimbursed with private care support in accordance with the Child Home Care and Private Care Support Act or other similar support paid by the state or municipality
- dividend based on labour input referred to in the Income Tax Act
- other similar income
Income that we do not take into account when we calculate the amount of daily allowance
When we calculate the amount of your earnings-related daily allowance, we do not take into account the following income:
- holiday allowance, holiday return allowance and holiday compensation
- a financial benefit paid by the employer as referred to in the Unemployment Security Act, which is periodized on the basis of a person’s established salary
- monetary gift from the employer
- tax-free in-kind and staff benefit
- tax-free reimbursement of costs
- individual voluntary pension insurance premium, tax-exempt
- employee Loan Interest Benefit
- salary for the waiting period
- grants and scholarships
- revenue from the Staff Fund
- profit distribution item
- wages paid as pay security insofar as it would not be income taken into account as a basis for earnings-related daily allowance
- supplementary benefits from the sickness fund of the place of work
- trust fee paid for a position of trust
- compensation based on intellectual property
- share option, unless the agreed subscription price of the share subscribed for by the employee stock option materially falls below the fair value of the share at the time the employee stock option is issued and such employee stock option is exercised within one year of the employee stock option being issued, or unless it is a reward paid in consideration for the work
- dividend income
- employment-based share issue
- covered dividend
- compensation corresponding to the salary of the period of notice
- cash compensation withdrawn from the working time bank and cash compensation paid as pay security by the working time bank
- savings in the Working Time Bank
- a remuneration in the form of shares, investment deposits or other similar means quoted on a multilateral trading facility under the supervision of an authority of an employer company or a company within the same group or other similar economic association, or in cash instead of shares, where the value of such an advantage in the form of a remuneration depends on the development of the value of the shares in question for at least one year between the promise and the issuance of the remuneration;
- other similar income