The earnings-related daily allowance is calculated based on your stable salary. Stable salary includes, among others, the basic salary paid for work, taxable fringe benefits, salary for the period of termination, annual holiday salary, compensation for shortened work time and different increments, like evening work increment, shift work increment and Sunday increment. Also annual holiday, sick leave with pay and period of termination with pay is parallel with employment and is taken into consideration when defining the salary.
However, please notice that the salary upon which the daily allowance is based on is always smaller than the actual monthly salary. This is because when calculating the basis salary, portions which are not a part of the stable salary according to legislation, have been deducted. These deducted portions include for example vacation bonus, leave compensation and benefits paid at the end of the employment, like compensation corresponding to the salary of termination period and possible benefits paid by the employer. What can be considered a stable income has been described in the government’s decree on the salary that is taken into account when defining unemployment benefits (30.12.2002/1332).
The period of time from which the salaries are taken into consideration
The salary income is taken into consideration according to the salary certificate that you have delivered to the fund. The earnings-related daily allowance is supposed to reflect the level of income that you have had during the period that meets the employment condition, immediately prior to your unemployment. Thus, your salary income is taken into account from those 26 calendar weeks that immediately predate your unemployment and during which you have met the employee’s employment condition. The period between the last salary period included in the salary certificate and the beginning of your unemployment can be a maximum of 30 days.
The employee’s employment and membership condition has shortened from 34 weeks to 26 weeks at the beginning of 2014. The change applies to all those daily allowance applicants who have had at least one week that can be read into the employment condition after 29.12.2013. If there are not any calendar weeks that fulfill the requirements and can be read into your employment condition from 30.12.2013 onwards, you need to fulfill the 34 week employment condition. In this case, you need to deliver the fund the salary information from those 34 calendar weeks during which you have fulfilled the employee’s employment condition.
The salary definition is always done of the shortest period possible. The salary income is, however, taken into account from a longer period, if the period of 26 calendar weeks includes calendar weeks that do not fulfill the employment condition. This is because calendar weeks that do not fulfill the employment condition cannot be taken into account when defining the salary.
Only in exceptional cases can the salary income be taken into account from a shorter period than 26 calendar weeks. Exceptionally this can be done when your employment condition has been met completely or partially in a work done in another EU or EEA country or in Switzerland.
Annual income definition
If the work and the salary income from it has been seasonal, the amount of daily allowance is calculated from the annual income. In the annual income definition, the income is taken into account from the past 12 months that predate the unemployment. The annual income definition differs from the regular salary definition in that it takes into account also some taxable social benefits, loss of income compensations and benefits, if they are taxable income for the receiver. When carrying out the annual income definition, the vacation bonus, leave compensation or annual holiday compensations are not deducted from the salary.
The work is seasonal, if due to natural conditions or other such reasons the work can be done only at a certain time of the year and if the amount of work and the income of it are for this reason remarkably larger than normally. For example, asphalt workers and resort employees work seasonally.
As a rule, the salary is taken into account according to the so-called earning principle. This means that the income you have earned during the salary definition period is taken into account even in the case that it has been paid to you outside the salary definition period. These salary portions that are paid retrospectively include for example different piecework pays, production rewards, sales provisions and salary portions paid as income security.
Applying the earning principle also means that salary paid during the salary definition period cannot be taken into account as basis for daily allowance, if the salary has been earned outside the salary definition period.
As a rule, we can only take notice of salaries actually paid. In exceptional cases also the right for salary can be taken into account as your salary income, i.e. salary receivables in the future. However, you need an exceptionally strong documentation about the existence of these salary receivables. An adequate documentation can be for example the legal ruling of a court of law.
Calculating the salary on which the daily allowance is based on
When calculating the salary, upon which the daily allowance is based on, the portions that are not included in the stable salary are deducted from your salary income. From the income that is left, a deduction is made according to the employee’s pension and unemployment insurance payments and the daily allowance payments of the health insurance. The amount of this deduction is 4.64 per cent in 2017.
The daily salary, that is the basis for the daily allowance, forms from dividing the salary income, we have come to in the previous paragraph, by the number of working days in the salary definition period. By multiplying the daily salary with 21.5, we receive the amount of the monthly salary upon which the daily allowance is based on.