Amount of adjusted earnings-related daily allowance

Last updated 14.12.2023

The amount of the adjusted daily allowance is calculated in such a way that the total of the daily allowance and 50% of the income received during the period of adjustment may increase to the amount that would otherwise have been paid as a benefit.

The adjusted daily allowance has a maximum and a minimum amount.

The adjusted earnings-related daily allowance with possible child increases and income during the adjustment period may in total not exceed the salary on which the earnings-related daily allowance is based. When revising the maximum level, the protective part is not taken into account. 

The total of the adjusted daily allowance and the income received during the adjustment period may not exceed the amount of the wage or salary on which the daily allowance is based. However, the minimum amount of the adjusted daily allowance is the amount to which you would be entitled to receive the basic daily allowance on an adjusted basis.

Calculation of the amount

The rules for calculating adjusted earnings-related daily allowance may seem complicated. After all, the calculation is quite simple. You also don’t have to know how to do it yourself. The easiest way to assess the impact of income from part-time work is to try our daily allowance calculator.

The amount of the adjusted daily allowance under the main rule is calculated as follows

• take the salary paid during the application period
• divide the amount received into two
• the amount i converted into a daily wage by dividing the sum obtained by 21.5
• deduct the residue from the full daily allowance
• Finished!

Examples of calculating adjusted earnings-related daily allowance

Salaries are paid in one lump sum for several months

If you are paid for a period of more than one month and there is no benefit purpose, we will divide your earnings and the period of work on which they are based into the month of payment and the number of months after that that for which the earnings have been paid. In this procedure, we do not take into account how the wages were actually earned, but divide the income equally according to the number of months.

Such a procedure may be appropriate if

• your salary is normally paid once a month, but the employer pays you in one instalment for two or more months
• your pay is delayed for reasons attributable to the employer and is therefore paid later than usual
• pay due on a Saturday or public holiday is paid on the preceding working day because of a provision in the Employment Contracts Act

We will not apply the procedure in a situation where

• your salary is paid regularly every 2 weeks, but there are therefore 3 pay days in a settlement period and earnings are therefore paid for a longer earning period than one month in a settlement period
• your basic salary and its supplements are paid regularly at different times
• on the first payday of the employment relationship, you will be paid for the first full pay period and the preceding short pay period

We will always use income equalisation as described above if it is obvious from the timing of the payment and other circumstances that the arrangement is designed to avoid income being taken into account in the settlement.

Earned income to be taken into account in adjustment

When calculating the amount of the adjusted daily subsistence allowance, we take into account the following income from work

• basic salary for work and related allowances and allowances such as evening allowance, overtime pay, standby and on-call allowance, and in-kind or staff benefit subject to tax
• holiday allowance, holiday bonus and holiday compensation
• pay for annual leave based on part-time work
• pay for the period of notice to the extent that the person’s application for unemployment benefit is not rejected on the basis of the right to pay for the period of notice
• performance-based salary such as commission, bonus and tantiemi
• Savings insurance premium paid by the employer
• the insurance premium paid by the employer for individual voluntary pension insurance insofar as it is taxable
• scholarships and grants paid by the employer in tax terms
• compensation based on intellectual property rights; but not copyright compensation
• the remuneration paid on the basis of the duties of the shop steward and the occupational safety and health representative, as well as the remuneration paid on the basis of co-operation
• a remuneration equal to that of the salary;
• wages paid as pay security to the extent that it would be adjusted earned income paid by the employer
• service money
• earned income from business activities, excluding the clean income from forestry calculated in accordance with the Agricultural Income Tax Act
• earned income portion of dividend income
• the earned income part of the hidden dividend
• cash compensation withdrawn from the working time bank
• dividend based on labour input referred to in the Income Tax Act
• other comparable earned income

Income not considered in adjustment

When calculating the amount of adjusted earnings-related daily allowance, we do not take into account the following non-work-related earned income

• a financial benefit paid by the employer, which is amortised on the basis of the person’s established salary
• cash compensation withdrawn from the working time bank insofar as it has been amortised under the Unemployment Security Act
• pay for the period of notice for which the unemployment benefit application is rejected
• pay for annual leave based on full-time employment
• ordinary non-taxable in-kind or staff benefit
• individual voluntary pension insurance premium, tax-exempt
• salary for the waiting period
• Indemnification
• money gift
• scholarships and grants tax-free
• employee Loan Interest Benefit
• supplementary benefits from the sickness fund of the place of work
• revenue from the Staff Fund
• profit distribution item
• wages paid as pay security to the extent that it would not be a conciliatory income paid by the employer
• employment-based share issue
• share options, unless the agreed subscription price of the share to be subscribed 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 that is considered as consideration for the work
• dividend income in respect of capital income
• covered dividend for capital income
• trust fee paid for a position of trust
• 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