If you are unable to take all your vacation days during your employment, the untaken vacation will be paid as a monetary compensation (lomakorvaus) when your employment ends. If you have worked over 2 weeks in a full-time employment that ends and you are paid monetary compensation for untaken vacation, you are not entitled to unemployment allowance for the period of time for which the vacation compensation received corresponds to as salary. The period for which unemployment allowance is not paid is calculated by dividing the compensation you received by the average salary of that employment. This is called periodizing.

Example 1: Your employment ends on 7.1. On the payment date of 13.1. vacation compensation is paid for 3 weeks untaken vacation. You have no right to unemployment allowance for a period of approximately 3 weeks (estimated 8. – 28.1.)

If you are paid vacation compensation from a part-time job (working hours max. 80% of full-time hours) or from so-called gig job (a full-time job that last no more than 2 weeks), the vacation compensation is taken into account in the same way as the normal salary from that job. Read more about adjusted unemployment allowance.

Vacation compensation for successive employment relationships

As a general rule, monetary compensation for untaken leave (lomakorvaus) is periodized at the end of each period of full-time employment of more than two weeks. However, if you enter into a new employment relationship with the same employer and continue to work immediately after the end of the previous employment relationship, the vacation pay accrued for the entire period of employment is only periodized at the end of the second employment relationship.  

Example.
You have an employment contract for the period 9.9.2024 to 24.9.2024. When your employment relationship ends, you are paid vacation compensation for the period of employment. However, you sign a new employment contract with the same employer as of 25.9.2024. Your employment will end on 14.10.2024 and you will apply to the fund for daily allowance from 15.10.2024 onward. The vacation compensation you have earned from both employment contracts will be added together and periodized from 15.10.2024 onward.

Even if the employment relationships are not immediately consecutive, you can agree with your employer that your annual leave benefits accrued before the end of the employment relationship will be carried over to be taken during the next employment relationship. You can do this if you agree on a new employment contract before the end of the previous employment relationship, and at the same time agree to carry over your annual leave days. Please note that the agreement on the carry-over of leave must be in writing. If you have concluded a written agreement and you are paid vacation pay on the basis of two or more employment relationships at the end of your last employment relationship, the periodizing of vacation compensation is calculated on the basis of the total amount of vacation compensation. If the agreement is oral and not in writing, the case-law states that vacation pay must be periodized from the end of the job to which it relates. 

When you became unemployed or laid-off for the first time, the payment of unemployment allowance starts only after a waiting period of 7 unemployed working days. A calender week is considered to have 5 working days, so the 7-day waiting period lasts more than a week. The waiting period does not have to be continuous. The days of unemployment for a maximum of 8 consecutive calendar weeks can be included in the waiting period.

For those who work part-time or gig job, the waiting period is calculated by deducting the working hours during the calendar week from the maximum working hours according to the collective agreement. When these hours amount to 7 working days, the waiting period has been completed.

TE office can impose a mandatory waiting period for which no unemployment allowance is paid. TE office examines on a case-by-case basis if a person can be considered to have had a valid reason for resigning or refusing to work. If the TE office imposes a mandatory waiting period, the normal 5-day waiting period is still taken after the mandatory waiting period.

Regardless of a mandatory waiting period unemployment allowance can be paid, if you participate in a employment promoting service during the waiting period.

Read more about employment promoting services from TE Offices website.

Read more about mandatory waiting periods from TE Offices website.

Mandatory waiting period of 90 days (about 3 months) can be imposed if you

• resign without a valid reason from employment that would have lasted more than 5 days
• refuse without a valid reason work for which you have been chosen 

Mandatory waiting period of 60 days (about 2 months) can be imposed if you

• by your own improper actions cause the termination of work that would have lasted more than 5 days
• refuse the work offered to you by the TE Office or another party and the work would have lasted more than 2 weeks
• refuse to participate in an interview or prepare or update your employment plan 
• interrupt or resign from an employment promoting service without a valid reason

Mandatory waiting period of 30 days (about 1 month) can be imposed if

• you resign without a valid reason from employment that would have lasted no more than 5 days
• refuse the work offered to you and the work would have lasted no more than 2 weeks. 

In some situations, your employer may enter into an agreement with you to terminate your employment and agree to pay you a separate compensation. If the payment of the compensation is not based on a collective agreement or any law, you are not entitled to unemployment allowance for the period of time for which the compensation received corresponds to as salary. The period for which unemployment allowance is not paid is calculated by dividing the compensation you received by the salary on which your daily allowance is based on. Read more about the salary on which your daily allowance is based on.

Holiday pay or salary for notice period are not separate compensation as they are based on law. Separate compensation is extra money that your employer is willing to pay to you. Compensations can be paid under several names, e.g. support package, lump sum payment, severance pay, golden handshake.