Salary cost options

During the 2021–2027 programme period, projects’ salary costs will be compensated in full or in part using simplified cost options. The cost options applied to each funding call will be indicated in the funding call. The funding authority will make the final decision on the salary cost option used in each project. 

The beneficiary must apply the same salary cost option to all tasks of all project employees, and it cannot be changed during the project. For group projects, it is recommended that the same salary cost option apply to all beneficiaries. 

There are two salary cost options:

1) unit cost option for salary costs; 

and 

2) compensation for salary costs based on actual and paid eligible costs, and percentage-based compensation for social insurance contributions and holiday bonus (standard social insurance contribution option). 

Key points of the salary cost options in brief: 

Unit cost option for salary costs (hourly rate, 1,720 hours)

  • This salary cost option can be used in projects that are funded under the funding act and include salary costs. 
  • Working hours accounting is required for full-time and part-time project employees.
  • Eligible salary costs are calculated based on acceptable units, i.e. acceptable hours, instead of actual costs.
  • The employer’s social insurance contributions and holiday bonus are calculated based on a flat rate (standard social insurance contribution rate).
  • Standard social insurance contribution rates have been verified (in Finnish, file opens in a new tab) separately for teaching staff at universities of applied science and other project personnel. 

Standard social insurance contribution option

  • This salary cost option is used in all projects that are funded under the business support act and include salary costs.
  • It can also be used in projects that are funded under the funding act and include salary costs.
  • The beneficiary is not obligated to adopt any separate working hours accounting to verify the eligibility of salary costs regarding its full-time or part-time project employees.
  • Salary costs, excluding social insurance contributions and holiday bonus, are compensated based on actual and paid eligible costs.
  • The employer’s social insurance contributions and holiday bonus are compensated based on a flat rate (standard social insurance contribution rate).
  • Standard social insurance contribution rates have been verified separately for teaching staff at universities of applied science and other project personnel. 

Unit cost option for salary costs

The funding authority can decide that a project’s salary costs are compensated using the hourly unit cost model. In this option, eligible salary costs are calculated based on acceptable units, i.e. acceptable hours, instead of actual costs. Actual salary costs are not verified using an extract from the project’s accounting material. Working hours accounting is required for full-time and part-time project employees, and it is the most important instrument for verifying salary costs in the unit cost option. 

Hourly unit costs are calculated by dividing the most recent documented annual gross employee costs by 1,720 hours, regardless of the employees’ actual annual working hours. If an individual has previously worked part-time in the organisation, and annual gross employee costs corresponding to 100 per cent working hours are not directly available, the gross employee costs must be adapted to correspond to 100 per cent working hours before the calculation of unit costs. The annual gross employee costs for salary costs can also be determined using other methods that are described in more detail in the memo of the eligibility decree. 

In the project application, the applicant must indicate the most recent annual gross employee costs separately for each task proposed for its project employees. The annual gross employee costs also include wages during annual holidays and periods of leave. The EURA 2021 system calculates the employer’s social insurance contributions based on law and the holiday bonus based on an employment or public service contract automatically as an average percentage (standard social insurance contribution rate) based on the annual gross employee costs indicated by the applicant. 

The salary costs of members of the project personnel in accordance with the support decision are compensated as the project’s eligible costs, and they are calculated by multiplying the unit cost with acceptable hours. The beneficiary must maintain working hours accounting for all individuals carrying out project activities, indicating the work carried out for the project in hours. Acceptable hours used in the calculation of eligible salary costs are regulated in section 6 of the eligibility decree. 

The number of acceptable working hours cannot exceed 1,720 hours for any individuals carrying out work full-time for the project or the number of hours calculated from 1,720 hours using the percentage of part-time work applied to a project approved in the support decision for any individuals carrying out work part-time for the project during any project year. The EURA 2021 system monitors the accrual of hours during each operating year through payment applications and prevents them exceeding the permitted limit. The operating year means the one-year reference period from the project start date, i.e. a period of 12 successive months and following periods of 12 months. 

Standard social insurance contribution option

The funding authority can decide that a project’s salary costs excluding social insurance contributions and holiday bonus are compensated based on actual and paid eligible costs. In this case, the employer’s statutory social insurance contributions and the holiday bonus based on an employment or public service contract are compensated for the beneficiary as an average percentage of salary costs, excluding social insurance contributions and holiday bonus (standard social insurance contribution rate). The EURA 2021 system automatically calculates the standard social insurance contribution rate based on salary costs. This salary cost compensation option always applies to business development aid and aid for developing the operating environment funded based on the business support act (758/2021). 

In the standard social insurance contribution option, the beneficiary is not obligated to adopt any separate working hours accounting to verify the eligibility of salary costs regarding its full-time or part-time project employees. 

Salary costs of individuals who carry out work part-time for the project are calculated from eligible salary costs using a flat rate based on a fixed percentage of working hours allocated monthly to the project. The beneficiary must verify the fixed employee-specific percentage in its support application. The fixed percentage must be based on the estimated average percentage of the work carried out by the employee for the entire project. 

Salary costs during annual holidays and periods of leave are eligible insofar as wages are earned during the project period in accordance with the support decision and actually paid to the employee by the submission of the application for the payment of support. Provisional costs that the beneficiary has not yet paid to employees are not accepted.