Labour costs and the pay system

Personnel expenses account for more than half of all local and joint authority expenses. The job-based pay is determined by the collective agreement for each sector.

Personnel expenses in the local government sector amount to some 20 billion euros, of which 15,9 billion are salary costs and the rest are social security charges, pensions and other labour costs.

The pay system in the municipal sector

The components of pay are job-based pay i.e. basic pay, person-based pay, working time compensations and goal-sharing plan.

The job-based pay is determined by the collective agreement for each sector. It is based on an assessment of the demands of work.

The person-based pay is determined by work experience, individual competence and work performance.

Depending on the agreement sector, the job-based pay component is 66–83% and increments for length of service 6–13% of total pay.

Working time compensations are 9–25% of total pay and goal-sharing plan 0.2% of pay.