Key terms related to salaries and wages
The subject of salaries and wages includes many terms and concepts that you should be familiar with.
Wellbeing services counties apply a system for assessing the difficulty level of jobs (‘tehtävien vaativuuden arviointijärjestelmä’, TVA) and pay personal increments, whereas in the private sector the pay regulations vary between the different collective agreement sectors.
Statistics on salaries and wages, on the other hand, use different terms related to earnings, such as total earnings and regular earnings.
This small glossary of terms related to your pay helps you understand what each terms means.
Basic pay
Basic pay is the minimum pay that must be paid to the employee/officer on that level of salaries in accordance with the collective agreement applied.
Job-specific pay
Job-specific pay is based on how difficult the job is. Wellbeing services counties must apply an evaluation system for assessing the difficulty of a job, based on which the job-specific pay is determined. Each employer applies a different system for assessing the difficulty of a job, which means that the job-specific pay paid for the same job varies between employers.
The municipality applies the ‘OSVA’ model, meaning that the competence and responsibility demanded by the job impacts the amount of pay.
In the private sector, the job-specific pay is determined on the basis of in which pay group the employee belongs to based on their education and work duties.
Regular pay
Your actual regular pay includes your job-specific pay, personal increment, service increment, availability increment, and language increment. Shop stewards and occupational safety and health representative’s compensation is also included in the actual regular pay.
The term ‘actual regular pay’ is needed when calculating the hourly or daily wages, pay from the duration of annual holiday and sick pay.
In part-time work, the job-specific pay and the increments are proportionally smaller in relation to the shorter working hours of the officer or employee. Shift bonuses are paid based on an hourly wage calculated on the basis of full-time work.
Daily wage is calculated differently in the different agreement sectors.
In the public sector, daily wage is calculated by dividing the actual regular pay with the number of days in the calendar month. When actual regular pay, for example, is €2,500, the daily wage is 2,500:30 (calendar days in June) = €83.33.
If you do ‘gig work’ with your own employer during your unpaid leave, for example during care leave, your pay will be based on your daily wage. The reason for this is that the employment relationship lasts more than 12 days, despite your unpaid leave, as your employment relationship will remain valid also during your leave. In such cases, it can be agreed that the pay is to be paid as an hourly wage, based on the hours worked.
In the private social services sector, the partial monthly wage is calculated by using the month’s weekdays (from Mon to Fri) as the basis for the calculation. The pay from one working day is divided by the normal working days of a month – November, for example, has 21 working days – and multiplying this number with the monthly pay: 1: 21 x €2,500 = €119.05.
Public sector
If the employment relationship lasts no longer than 12 days, the pay will be paid as hourly wages. Hourly wage is calculated by dividing the actual regular pay with a certain divisor number. This number is 163 for period-based work, general working time and normal working time. When actual regular pay, for example, is €2,500, the hourly wage is 2,500:163 = €15.34.
For employees working office working hours, the divisor applied is 152.
Private sector
In the private sector, either monthly or hourly wages can be agreed on. Hourly wage is calculated by dividing the actual regular pay with a certain divider number; in period-based work, general working time and normal working time, this divisor number is 163.
The minimum pay for full-time employees over the age of 17 in accordance with the SOTE agreement starting from 1 June 2024 is €1,785.63.
‘Regular earnings’ is a statistical term that describes the compensation paid for regular working hours, including working time and other bonuses, as well as e.g. in-kind benefits. Earnings from regular working hours do not include one-time pay instalments, such as holiday bonuses and lump-sum performance bonuses.
Total earnings comprise the pay paid for regular working hours and other working time, such as overtime and additional working hours. The concept of total earnings deviates from the concept of regular earnings in the perspective that total earnings also include compensation for overtime and additional work. Total earnings do not include holiday or performance bonuses.