Pay from the holiday period
Employees receive pay from the duration of their annual holiday. The holiday pay is determined based on the holiday credit year and the salaries and wages paid to the employee. The type of pay, an employee’s average working hours per month, and the regulations of the collective agreement all affect the calculation of annual holiday pay.
The public sector has agreed that the holiday pay will be paid on the regular pay day, unless the employee requests the holiday pay before their holiday starts.
Similarly, in SOSTES and TPTES agreements, holiday pay will be paid on the regular pay day, unless the employee requests, the holiday pay to be paid in accordance with the Annual Holidays Act. The request has to be made at least one month before the start of their holiday. The principle of the Annual Holiday Act:
- The holiday pay is paid before the start of the holiday.
- If the holiday lasts no more than six days, the employee is paid on the regular pay day.
A monthly-paid employee will be paid the pay defined in their employment contract from the duration of their annual holiday. In addition, working time compensations are paid:
According to SOTE, KVTES, HYVTES and YTHS agreements, an employee who has worked Sundays, evenings or nights during their regular working hours, will receive a bonus to their annual holiday pay in accordance with the monetary compensation paid for these hours. The annual holiday pay is occasionally increased with the percentage that is the proportion of the monetary compensation paid for working Sundays, evenings or nights during regular working hours from the actual pay paid to the employee during the previous holiday credit year. This increase is a maximum of 35%.
Under the SOSTES and TPTES agreements, holiday pay is increased with the percentage that is the proportion of the working time compensation accumulated during the holiday credit year of the actual pay.
Changing working time in the middle of a holiday credit year will affect the amount of holiday pay.
In this case, when calculating holiday pay in the public sector, the average working hours of the holiday credit year need to be calculated. If an employee has been working full-time for six months and 60% hours for the other six months, they have been working 80% hours on average. In this case, their holiday pay will be 80% of the actual pay, with the bonuses from working time compensation added to it.
In the private sector, when the working times of employees covered by SOSTES or TPTES agreements are changed, this leads to counting the holiday pay based on percentages. This percentage-based calculation method means that the annual holiday pay is a certain percentage of the salaries and wages paid during the holiday credit year. The percentages applied vary depending on the collective agreement.
SOSTES and TPTES: The annual holiday pay is calculated based on average daily pay when an employee works at least 14 days a month. The annual holiday pay is based on the average sum that the employee has earned per day during the holiday credit year (1 April–31 March).
The calculated average daily pay is multiplied with the coefficient presented in the tables of the collective agreement, corresponding to the number of holiday days.
The percentage-based calculation method is applied to hourly-paid employees, who, based on their contract, work less than 14 days a month, even if just during one month. If an employee has agreed to work on three days a week, the limit of 14 work days per month is not met every month. In such cases, the holiday pay is paid as percentage-based.
The duration of the employment relationship and the employee’s years of experience affect the percentage applied to the annual holiday pay.
The percentage-based calculation is also applied to monthly paid employees whose working hours are changed in the middle of the holiday credit year.
Check the more specific collective agreement regulations on percentage-based annual holiday pay from the collective agreement applied at your workplace.
Holiday compensation
At the end of the employment relationship, the employee is paid for all the annual holiday days they have not taken as holiday compensation as a part of their final salary.