General earnings-related allowance
You can get earnings-related allowance if the membership condition and the work requirement are met, you are registered as an unemployed jobseeker with TE services and there are no other obstacles to payment.
Membership Condition
The membership condition is met when you have been a member of the unemployment fund for a continuous period of at least 26 weeks. A membership period in another fund can also be counted if you have joined PAM Unemployment Fund within one month of resigning from the other unemployment fund.
Work Requirement
The work requirement is met when you have been in paid employment for at least 26 calendar weeks during your membership period. Calendar weeks with at least 18 hours of work or other paid time (e.g. annual holiday) are counted towards the work requirement. The wages must be in accordance with the collective agreement. If there is no collective agreement in the sector, wages from full-time work in 2023 must be at least 1331 euros a month.
The work requirement must be met within a 28-month review period. The review period is generally calculated backwards from registration as a jobseeker. If necessary, the review period can be extended for a valid reason, which could be parental leave, childcare leave, various spells of work incapacity or full-time studying. The review period can be extended by a maximum of seven years.
The work requirement you have acquired remains valid as long as you are available in the labour market or your absence from the labour market is due a justifiable reason. You are considered to being available in the labour market if you are either working at a job that accumulates your work requirement or you are registered as a jobseeker with TE Services. Justifiable reasons to be absent from the labour market are, for example, sick leave, rehabilitation, military service, full-time studies or parental leave. If you are absent from the labour market without a justifiable reason for more than 6 months, you lose the work requirement that you have acquired. In this case, you are entitled to the benefit only after you have fulfilled the work requirement again.
If you work in the education sector or the arts and cultural sectors, the work requirement is calculated in a slightly different way. For more information, contact our customer service either via e-services or by phone.
Basic component
Earnings-related allowance consists of a basic component and an earnings-related component. The basic component of earnings-related allowance is the same for everybody and the full daily allowance is always at least the basic component amount. In 2023 the basic component is €37,21/ day. The basic component is the same as Kela basic unemployment allowance.
Earnings-related component
The earnings component paid in addition to the basic component depends on your income. The earnings component is 45 % of the difference between your daily wage and the basic component. If your monthly wage is higher than 3534,95€ (after 1 January 2023), the earnings component is 20 % of the wages above this amount.
The amount of earnings-related allowance is calculated from your earnings in the period immediately before unemployment. The calculation takes into account regular wage income in the 26 weeks of the work requirement. Holiday pay and sick pay are also taken into account in the work requirement period. If your working hours were reduced due to partial pension, partial disability pension, partial childcare leave or partial sickness allowance, the period preceding this is calculated. In these cases you must submit a wage certificate for the period covered by the work requirement.
Only regular income is taken into account in the calculation. Profit-related bonuses, holiday bonuses or holiday compensation, for example, are not regular income so they are not taken into account in the calculation.
A percentage deduction is made from wages before daily allowances are calculated. This deduction corresponds to an employee’s employment pension and unemployment insurance contributions and the daily allowance contribution of health insurance (4.40 % in 2023). Therefore the wages that daily allowances are determined on are always lower than actual average monthly wages.
Full earnings-related allowance with the child increase is at most 90 % of the daily wage that the allowance is based on. If you are paid an increased earnings-related component for a period of employment promotion, the daily allowance can at most be the daily wage that the allowance is based on.
Re-calculating the allowance
Your daily allowances are re-calculated when your work requirement is met if it is one year or more since the allowances were calculated and payment began. If you accrue the 26-week work requirement again within one year of the previous calculation and the first paid day, the level of daily allowances is not re-calculated and there is no new waiting period.
Taxiation
Unemployment benefits are taxable. Read more about the taxation of earnings-related allowance here.
Daily allowance calculator
You can work out an estimate of your daily allowances using the TYJdaily allowance calculator or the calculator in our e-services.
Employment-promoting services
Find information about how participating an employment-promoting service affects the amount of your allowance here.
Duration of earnings-related allowance / How long can you get earnings-related allowance for?
Earnings-related allowance is paid for five days a week. Length of the maximum payment period depends on your work history prior the unemployment. The maximum payment period of earnings-related allowance is always reset when the 26-week work requirement is met again.
The maximum period of earnings-related allowance is:
- 300 days if your employment history is less than three years when unemployment starts.
- 400 days if your employment history is more than three years when unemployment starts.
- 500 days if you are at least 58 years old when you meet the work requirement and have worked at least 5 years in the last 20 years. You may also be entitled to 500 days if the maximum allowance period began before 1.1.2017.
Right to additional days
Earnings-related allowance can be paid after the maximum period has been met as “additional days” up to the end of the calendar month when you reach the age of 65 years.
A new change security scheme has been introduced from the beginning of 2023 for those who were born in 1965 or after. Change security will replace the right to additional days gradually by the year 2030.
You may be entitled to additional days if:
- you were born between 1957-1960 and turned 61 before the maximum allowance period was reached
- you were born between 1961-1962 and turned 62 before the maximum allowance period was reached
- you were born in 1963 and turned 63 before the maximum period was reached
- you were born in 1964 and turned 64 before the maximum period was reached
The age requirement is met also if you turn 61-64 on the same day that the maximum payment period ends.
A further requirement is that you have worked at least 5 years in the last 20 years.
The unemployment fund checks your entitlement to additional days when the maximum allowance period is reached.
The government has decided to remove the right to additional days in the future. This will apply for applicants, who were born 1965 or later.
Earnings-related allowance is a benefit, so it is taxed differently from wages.
In accordance with the Tax Administration’s instructions, at least 25% tax is withheld from earnings-related allowance if the tax information the fund has is for wage income.
If you want, you can order a revised tax card for benefits from the Tax Administration. This is easy to do, for example in the Tax Administration’s MyTax service.When you select PAM Unemployment Fund/Palvelualojen työttömyyskassa as the benefit payer in the service, the unemployment fund can access the information electronically the next day.
Please note that the revised tax card must be specifically for benefits. If the revised tax card is for wage income, 25% tax is still withheld from the benefit.
Read more about taxation of unemployment benefits on the Tax Administration website.
A waiting period is taken when you apply for earnings-related allowance for the first time or when your work requirement is met again. A waiting period is not taken, however, if it is less than one year since the start of the previous daily allowance period (first day paid) and a waiting period was taken at the start of that period.
The waiting period is a period equivalent to five working days and earnings-related allowance is not paid for this period. The waiting period can only be taken into account for periods when your job search has been active with the TE Office and there have been no other obstacles to the payment of daily allowances, such as a suspension period. A maximum of five days’ waiting period can accrue in a week.
For part-time workers, the waiting period is calculated in hours. The difference between full working hours and hours worked is counted towards the waiting period and the wating period is met when the number of hours equivalent to five working days is reached.The waiting period must be accrued during eight consecutive calendar weeks. It is not counted for periods when working hours exceed 80% of a full-time worker’s maximum working hours.
A waiting period must be counted in a period of eight consecutive weeks. Days outside this period can’t be counted as a part of a waiting period.
Example
If you have four fully unemployed days within a period of eight weeks and the fifth fully unemployed day would be on the ninth week, there would still be only four days to count for the waiting period. This is because the day counted on the first week could not be counted in anymore.
A suspension period is an unpaid time limit set by the Employment and Economic Development Office.Daily allowances are not paid for the period of the suspension period and the waiting period is also not taken.The length of the suspension period varies from 7 days to 90 days depending on the basis for it. You can read more about this on the TE Office website.
Annual holiday, holiday pay and holiday bonuses may reduce the amount of daily allowances paid or prevent payment altogether. The effect of these depends on whether the holiday and related payments were accrued from full-time work or part-time work.
If you have been laid off from full-time work, you are not entitled to daily allowances for annual holiday periods. Enter holiday periods in your application. You are entitled to unemployment allowance for holiday periods earned from part-time work on condition that your job search has been active with the TE Office.
Enter holiday days in your application according to the holiday hours paid. Holiday pay and holiday bonuses are taken into account in the adjustment in the application period in which they were paid to the applicant’s account. Work where the contractual working hours do not exceed 80% of the total working hours in the collective agreement is considered part-time work. Read more about adjusted daily allowances or entitlement to daily allowances in lay-off situations.