Annual earnings

Compensation for loss of earnings is based on the annual earnings in the following situations:

Annual earnings are determined on the basis of the injured person’s earnings at the time of the claim event (earnings on the claim date). These are determined on the basis of the earnings received during the year preceding the claim event. All employment relationships valid on the claim date will be taken into account.  

The annual earnings of the claim date are compared to the average annual earnings of the three years preceding the claim event (reference period earnings). If the earnings of the claim date differ by less than 20 per cent from the average, the annual earnings are deemed the earnings of the claim date.  

If the earnings of the claim date differ by at least 20 per cent from the average reference period earnings, the annual earnings are deemed to be the average of the reference period earnings and the claim date earnings. However, if this difference of at least 20 per cent is caused by a change in earnings that has been assessed to be permanent, the annual earnings are deemed to be the earnings of the claim date.  

The above paragraph explains the main rules of how annual earnings are determined. The calculation also taken into account the effects of unemployment, illness and other absence on earnings.  

In addition to cash pay, annual earnings include other taxable remuneration received from work, such as benefits in kind.  

If the annual earnings remain under the limit provided in legislation, the compensation will be based on the minimum annual earnings.  

The Workers’ Compensation Act contains special provisions on the annual earnings of students and retired persons.  

Main rules of how annual earnings are determined: 
A waiter has had an accident on 1 January 2016. The permanent employment relationship had begun on 1 December 2014.

  • Earnings of the claim date, i.e. earnings for the period of 1 January 2015 – 31 December 2015 are EUR 26,363.45.
  • Earnings for the reference period, i.e. earnings for the years of 2013 – 2015 are EUR 26,363.45, EUR 15,763.00 and EUR 23,477.00 and increased to the 2016 level EUR 26,556.873, EUR 16,031.55, EUR 24,290.82, the average being EUR 22,293.08.
  • When the earnings of the claim date are compared to the average of the reference period earnings, the difference is 18.25843 per cent.
  • Because the claim date earnings do not differ by 20 per cent from the average reference period earnings, the annual earnings are deemed to correspond to the earnings on the claim date, i.e. EUR 26,363.45.
Modified 04.08.2016