What Is "Lopputili" and What Does It Include?
In Finland, the final settlement payment made at the end of an employment relationship is known as lopputili (or loppupalkka). It consolidates all unpaid earned wages, accrued benefits, and monetary compensations owed to the employee up to their final contractual day of service.
Core Components of Final Pay
- Partial Month Salary (Osakuukauden palkka): If your employment terminates in the middle of a calendar month, you are entitled to wages for the days worked. Under Finnish Labour Court precedent TT 2003:1, monthly salaried workers are compensated using a standardized divisor of 21 working days (or the month's actual working days if dictated by the applicable collective agreement).
- Holiday Compensation (Lomakorvaus): Employees accumulate 2 or 2.5 vacation days per qualifying month under the Annual Holidays Act (Vuosilomalaki 162/2005). Any unused days remaining upon termination must be liquidated into cash. The statutory daily value is calculated by dividing monthly salary by 25 (because Finnish vacation law counts Saturdays as leave days).
- Holiday Bonus (Lomaraha): While not required by Finnish statute, most collective bargaining agreements (TES) provide an additional holiday bonus equal to approximately 50% of the holiday compensation.
- Overtime & Banked Flexitime: Any uncompensated overtime hours, Sunday work premiums, or positive hours accumulated in a working time bank (työaikapankki) must be paid out in full.
Due Date and the 6-Day Waiting Compensation Rule (TSL 2:14 §)
Under Chapter 2, Section 13 of the Employment Contracts Act, final pay falls due on the last day of the employment relationship. The contract may agree that payment takes place on the employer's regular subsequent payroll run, but this must be explicitly agreed.
If the employer unlawfully delays payment beyond the due date, Section 14 establishes a powerful protective sanction: the employee is entitled to receive full daily wages for each waiting day, up to a maximum of 6 calendar days. For example, if an employee earning €3,000/month experiences an unjustified 8-day delay in final payment, the employer must pay €600–€700 in waiting compensation in addition to the owed salary and statutory interest.
Taxation of Final Pay in Finland
Final pay and holiday compensation are subject to standard Finnish earned income tax (ansiotulovero) as well as employee statutory pension (TyEL ~7.15%) and unemployment insurance contributions (~0.79%).
Because final pay often bunches together several thousand euros of accumulated holiday compensation with regular wages into a single lump sum, it can temporarily exceed your monthly withholding threshold. Ensure your Finnish tax card (verokortti) has an adequate annual income limit to prevent withholding at the higher additional tax rate (lisäprosentti).