palvelulisä

Palvelulisä, literally a service allowance, is a component of remuneration used in Finland to supplement base pay for employees in certain positions. It is paid in addition to the regular salary and is intended to compensate for factors linked to the service provision, such as demanding duties, special responsibilities, irregular hours, or challenging work conditions.

Scope and eligibility: It is most common in the public sector—municipalities, state agencies, and the defence sector—but can also appear in private sector jobs covered by collective agreements. Eligibility is defined in job contracts or collective agreements; it may apply to specific job grades, tasks, shifts, or locations.

Calculation: Palvelulisä is usually a fixed amount per month or a percentage of the base salary, depending on the contract. It may be paid automatically to all employees meeting conditions or require a decision by the employer or union representatives.

Taxation and relation to other pay: In Finland, added allowances are generally treated as earned income for tax and social security purposes, and are integrated into the employee’s total remuneration when calculating benefits. The exact tax treatment can depend on the nature of the supplement and current tax rules.

Context: The term has been used for decades as part of wage structures in Finland. With evolving collective agreements and reforms, some uses of palvelulisä have been adjusted or replaced by other forms of compensation, while the concept remains a recognized part of remuneration for many workers.