Unemployment security vocabulary
Earnings-related daily allowance
Earnings-related daily allowance is the same as unemployment allowance. Unemployment funds pay unemployment allowance as earnings-related daily allowance, while Kela pays unemployment allowance in the form of basic unemployment allowance. Earnings-related daily allowance is also referred to as unemployment compensation, even though unemployment funds no longer pay compensation, and the unemployment allowance and the earnings-related daily allowance are allowances. Earnings-related daily allowance is available to unemployment fund members who meet the requirements for the payment of earnings-related daily allowance, such as the membership and employment conditions. Earnings-related daily allowance consists of the basic part and the earnings-related part which is tied to your earnings. The amount of the basic part is the same as full basic unemployment allowance paid by Kela (EUR 37,71). The earnings-related part is 45 percent of the difference between daily earnings and the basic part. If your monthly earnings exceed EUR 3 534,953 the earnings-related part for the amount in excess of this limit is 20 percent.
Daily pay is calculated on the basis of the average of earned income. The section on the calculating the rate of earnings-related daily allowance and staggering provides further information on how the amount of earnings-related daily allowance is calculated. You can calculate the estimated amount of your earnings-related daily allowance by going to the electronic services of the unemployment fund.
Unemployment path to retirement
The unemployment path to retirement is an established concept in Finnish unemployment security. The unemployment path to retirement refers to a person’s right to additional days. In other words, payment of daily allowance beyond the normal maximum payment period (300 to 500 days). The right to additional days is being phased out, but the right to additional days is still as follows:
If you were born between 1961 and 1962 you may be entitled to additional days if you turned 62 years of age before reaching the maximum daily allowance payment period.
If you were born in 1963 you may be entitled to additional days if you turned 63 years of age before reaching the maximum daily allowance payment period.
If you were born in 1964 you may be entitled to additional days if you turned 64 years of age before reaching the maximum daily allowance payment period.
Additionally, you must have had pension-insured work for at least five years in the last 20 years counted backwards from the maximum period to receive additional days. We can pay earnings-related unemployment allowance up to the age of 65.
Additionally, you must also have a minimum of five years of employment history in pension-insured work in the 20 years prior to meeting the employment condition. We can pay you earnings-related daily allowance up to the age of 65.
If you were born in 1965 or after, you are not entitled to additional days.
Transitioning to additional days does not require any action from you, as the unemployment fund will automatically check the right to additional days when you apply for the allowance and the maximum period is reached. If you do not have the right to additional days, you will receive a negative decision.
If you are already on additional days, their days will no longer be reset and their rate of earnings-related daily allowance will not be recalculated, even if you are employed and meet the employment condition while on additional days.
Resetting the maximum payment period
The unemployment fund "resets" the paid daily allowance days each time the 12-month employment condition is met again. Each calendar month during which a salary of at least 930 euros is paid counts towards the employment condition. If a salary of at least 465 euros but less than 930 euros is paid during a calendar month, a half-month of employment condition is accrued. Two half-months of employment condition make up one full month of employment condition. The salary must comply with the collective agreement regardless of the aforementioned salary limits. If there is no collective agreement in the field, the salary for full-time work must be at least 1,430 euros per month (as of 2025).
Mandatory waiting period
Mandatory waiting periods are set by the employment official and prevent the payment of daily allowance. The unemployment fund has no control over whether or not the employment official sets a mandatory waiting period, because the periods are based labour policy. If the employment official sets a mandatory waiting period it will provide the unemployment fund with a labour policy statement. The unemployment fund will then issue a decision to the member on account of the statement. You may then appeal the decision to the Social Security Appeal Board.
7-day waiting period
The 7-day waiting period is a period corresponding to seven full workdays and must be completed within eight consecutive calendar weeks. The 7-day waiting period is always applied when applying for earnings-related daily allowance for the first time. The 7-day waiting period is also applied if you meet the employment condition again and the new maximum payment period of daily allowance begins.
The waiting period is seven business days if you are fully unemployed. If you are working part-time your “unemployed” hours count towards the 7-day waiting period. For example, if you work 4 hours per day and 20 hours per week and a full-time working week in the sector is 37.5 hours, 3.5 hours per day and 17.5 hours per week can be counted towards your waiting period. This means that you need to accumulate a total of 7 x 7.5 hours, i.e. 52.5 hours (=corresponding to three working weeks), to complete your waiting period.
Pay-subsidized work
You can accumulate the employment condition during pay-subsidized work if the pay-subsidy is granted for the employment of a person with reduced work ability or a long-term unemployed person aged 60 or over. In this case, the employment condition accumulates at a rate of 75% after 10 months of pay-subsidized work. Therefore, the pay-subsidized work must last for 26 months for the employment condition to be fully met through pay-subsidized work. This change came into effect on September 2, 2024.
If the pay-subsidized work started by September 1, 2024, the employment condition still accumulates at a rate of 75% from the start of the employment, and the length of the employment condition is 6 months. Thus, the pay-subsidized work must last approximately eight months for the employment condition to be fully met. If the pay-subsidized work is arranged based on the employment obligation, the employment condition is 6 months and it accumulates at a rate of 100% for the entire duration of the employment.
Employee
Wage and salary earners whose income is based on payment received for work carried out for another party. You can become a member of an employees’ unemployment fund only if you are an employee, and only employees can get unemployment security from an employees’ unemployment fund.
Adjusted daily allowance
The unemployment fund can pay an adjusted daily allowance if you are, for example, in part-time work or have income from secondary business activities. You can check the detailed conditions under the section on employment and income. The adjusted daily allowance is paid either in monthly or four-calendar-week periods. The adjusted daily allowance is calculated so that 50 % of your earned income reduces your earnings-related daily allowance. For example, if the taxable salary is € 1,000 per month, € 23.26 per day is deducted from the full daily allowance (€ 1,000 / 2 = €500 -> € 500 / 21.5 = € 23.26). The salary and the adjusted daily allowance together can be at most 100 % of the salary on which the daily allowance is based. You can calculate an estimate of the adjusted daily allowance in the online service.
Adjusted daily allowance and the maximum payment period
When receiving adjusted daily allowance, the accumulation of days towards the maximum payment period is calculated by dividing the adjusted daily allowance (gross) by the full earnings-related daily allowance. This gives the number of days that count towards the maximum payment period. For example, if the gross adjusted daily allowance paid by the unemployment fund is € 750 per month and the full earnings-related daily allowance is € 75, the accumulation of days towards the maximum payment period is slowed down by about 50 percent and approximately 10 days per month are counted towards the maximum payment period.
Work requirement for the payment of earnings-related daily allowance (employment condition)
To be eligible for the earnings-related daily allowance, you must have been employed during your membership in the unemployment fund and met the employment condition. The employment condition requirement is 12 calendar months and is income-based (euroization model). This means that the employment condition is accrued based on the salary paid, not the hours worked. Each calendar month during which a taxable salary of at least 930 euros has been paid accrues one month of employment condition. If a salary of at least 465 euros but less than 930 euros has been paid during a calendar month, a half-month of employment condition is accrued. If there are two half-months of employment condition, one full month of employment condition is accrued. The half-months of employment condition do not need to be consecutive. Thus, the 12-month employment condition can be met, for example, with 11 full months of employment condition and two half-months of employment condition.
Employment does not need to be continuous or fulfilled in a single employment relationship; employment condition months can be accumulated from temporary jobs, for example. However, the employment condition must be met within 28 months. The review period can be extended for up to seven years for an acceptable reason. Acceptable reasons for extending the review period include full-time studies, periods of sickness allowance, military service, and caring for a child under 3 years old.
Insurance condition
The insurance condition refers to the membership condition, which means that in order to receive earnings-related daily allowance you must meet the 12-month employment condition during your membership.
Entrepreneur
In the context of unemployment benefits, a person working as a salaried employee may be considered a full-time entrepreneur. For example, if you work as a salaried employee in a company in which you have an ownership stake, either alone or together with your family members, you may be considered an entrepreneur for unemployment benefits. For detailed definitions of entrepreneurship, see the section on entrepreneurship.
A part-time entrepreneur can receive daily allowance if the business activity is considered small enough not to prevent accepting full-time work. This is always assessed by the employment official, not the unemployment fund.