Annual income

The parental allowance system was reformed - are you on the right page?

The information on this page applies to your family if:

the estimated due date of your baby is on or after 4 September 2022
you have adopted and the child was placed in your care on or after 31 July 2022.

Read more: Parental allowance if the estimated due date of your baby is before 4/9/2022.

The amount of your allowance is based on your annual income. Your annual income is calculated for the 12 calendar months prior to the calendar month that precedes the start of your entitlement to the benefit. In certain situations, the allowance can be calculated on the basis of the last 3 months of the period. These situations include situations where you have been on child care leave or have graduated from your studies. You must separately request that your allowance is calculated based on your income for 3 months.

There is a 1 month gap between the reference period and the start of the allowance period, and the income during this one month is not included in the annual income.

Kela cannot issue a decision on the parental allowance until the reference period for the annual income has ended.

The following are taken into account as annual income for the reference period:

  • wages and salaries
  • salary for insurance purposes
  • Income under the self-employed persons' (YEL) and farmers' (MYEL) pension insurance schemes
  • certain benefits
  • certain compensations for loss of income.

The annual income can thus consist of one or several of the aforementioned types of income. As a rule, Kela receives the necessary information for determination of the annual income from the national Incomes Register, the pension and insurance providers and the unemployment funds, so this information need not be reported to Kela separately. If necessary, Kela may request further information from you or from the payer of the income.

Different types of income

3 month income period

In certain situations, the parental allowance can be calculated on the basis of the income for the last 3 calendar months of the reference period.  However, this requires that one of the following situations has applied to you during the 12 month reference period:

  • You have attained a vocational qualification and completed, for example, a basic vocational degree, a vocational degree or a bachelor’s or master’s degree in higher education.
  • You have performed conscript or alternative civilian service.
  • You have been partly or completely absent from the labour market after the parental allowance period, because you have stayed at home caring for a child under the age of 3.
  • You have been partly or completely absent from the labour market after the parental allowance period, because you have stayed at home caring for an adopted child.
  • You have been absent from work because of participating in the medical care of a child of yours that is ill or disabled or the care of a child of yours that is under the age of 16 (home care or hospital care).
  • You have moved to Finland from another country and you were not covered by the Finnish national health insurance while living abroad.

A further requirement is that your income for 3 months multiplied by 4 is at least 20% higher than the annual income determined on the basis of the 12 month reference period. The income for the last 3 months of the reference period is taken into account in the same way as the income based on the entire reference period.

Calculation formulas for parental allowances