Holiday compensation, holiday bonus and holiday pay: what you should know
Different types of holiday-related payments may affect your earnings-related allowance. The impact depends, among other things, on whether the work is full-time or part-time and on when the payment is made. In this article, we explain clearly what you should know about holiday compensation, holiday bonus and holiday pay.
The impact of holiday compensation
Holiday compensation is paid if you have unused annual leave when your employment ends. In some cases, it may also be paid during the employment relationship.
Holiday compensation paid for full-time work is periodised over a specific period, and no earnings-related allowance is paid for that period. The periodisation time usually begins on the day following the end of the employment relationship. The length of the period is calculated by dividing the amount of holiday compensation by a calculated daily wage. The unemployment fund determines the calculated daily wage and the exact periodisation time when processing your application. Holiday compensation may also affect your allowance entitlement if it is paid during the employment relationship, for example during a lay-off or a comparable situation.
Holiday compensation paid for part-time work is not periodised over time. Instead, it is adjusted with the allowance. This means that the income reduces the amount of your earnings-related allowance. The adjustment is based on the payment date. Holiday compensation may be adjusted even if the part-time employment has already ended and the payment date falls entirely within a period of unemployment.
Holiday compensation from full-time work
- holiday compensation is periodised
- no earnings-related allowance is paid during the periodisation time
Holiday compensation from part-time work
- is not periodised but adjusted, meaning it reduces the amount of the allowance
- adjustment is based on the payment date
Example of the periodisation of holiday compensation
Kaisa’s full-time employment ends on 31 May 2026, and she applies for earnings-related allowance starting from 1 June 2026.
Kaisa is paid holiday compensation on 30 June 2026 in the amount of €2,300. Her calculated daily wage is €150 per day. The allocation period for the holiday compensation is therefore 2,300 / 150 = 15 days.
Only weekdays are included in the allocation period, so Kaisa’s holiday compensation is allocated to the period 1 June 2026 – 19 June 2026.
If Kaisa meets the employment condition, a waiting period will also be applied. The waiting period corresponds to 7 weekdays of unemployment. In her case, it would be set for the period 20 June 2026 – 30 June 2026.
In this situation, earnings-related allowance could be paid at the earliest from 1 July 2026.
Example of adjusting holiday compensation
Tapio’s part-time employment ends on 31 May 2026. He applies for allowance for the period 1 June 2026 – 30 June 2026.
Tapio is paid his final salary and holiday compensation on 15 June 2026. Both the salary and the holiday compensation are adjusted based on the payment date. The salary and holiday compensation (as well as any holiday bonus) reduce the amount of earnings-related allowance for the period 1 June 2026 – 30 June 2026.
Holiday bonus is often confused with holiday compensation, but they are different and their impact on the allowance differs partly.
The impact of holiday bonus
Holiday bonus is often confused with holiday compensation, but they are different and their impact on the allowance differs partly. Holiday bonus is not based on the Employment Contracts Act; it is usually based on a collective agreement.
Holiday bonus paid for full-time work does not affect entitlement to earnings-related allowance or the amount of the allowance. Holiday bonus paid for part-time work, however, is adjusted in the same way as holiday compensation, i.e. based on the payment date.
Holiday bonus from full-time work
- holiday bonus paid for full-time work does not affect entitlement to earnings-related allowance or the amount of the allowance
Holiday bonus from part-time work
- adjusted in the same way as holiday compensation
- reduces the amount of the allowance base don the payment date
Example: holiday bonus paid from full-time work
Emma’s full-time employment ends on 31 May 2026. She applies for earnings-related allowance for the period 1 June – 14 June 2026.
Emma is paid her final salary, holiday bonus and holiday compensation on 12 June 2026. Since this concerns full-time employment, the final salary and holiday bonus are not adjusted, even though their payment date falls within the adjustment period. They therefore do not reduce the amount of the allowance.
Holiday compensation, however, is allocated over a period, and no earnings-related allowance is paid during the allocation period.
Example: holiday bonus paid from part-time work
Elias’s part-time employment ends on 31 May 2026. He applies for earnings-related allowance for the period 1 June – 14 June 2026.
He is paid his final salary on 12 June 2025, and the salary includes hourly wages, holiday bonus and holiday compensation. The payment date falls within the adjustment period, so the salary is adjusted based on the payment date, even though the employment has already ended in practice.
How does holiday pay affect the allowance and applying for it?
If you are laid off and receive holiday pay based on full-time work, you are not entitled to earnings-related allowance for those holiday days. In your application, select “paid annual leave” for the days for which you receive holiday pay. Enter working hours corresponding to your full working time. For example, if your full working time is 7.5 hours per day, enter 7.5 hours for each holiday day.
If the holiday pay is based on part-time work, you may be entitled to adjusted allowance. In this case, the holiday pay reduces the amount of your allowance. Enter working hours according to how much pay you receive for the holiday period. For example, if you receive holiday pay and it is based on 4 working hours per day, enter 4 hours for each holiday day.
Submitting a payslip may speed up the processing of your application
Salary information is obtained from the Incomes Register, and you usually do not need to submit a payslip.
However, if you have been paid holiday compensation or holiday pay, attaching a payslip may speed up the processing of your application. This is because the information in the Incomes Register is not always sufficiently detailed.
Unemployed during the summer? Explore our summer section and apply for the allowance smoothly!
Unemployed in summer 2026? Read this!
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