The pay raises are structured differently each year. Next year the pay raise will be 2.5 percent, adjusted for the cost of living. It's a combination of flat percentage rise as well as a fixed euro amount. There's also a floating adjustment that each sector and its respective union can allocate as they see fit. In 2006, the raise will be 2.1 percent, also adjusted for the cost of living. This is purely a percentage-based rise, and includes the floating adjustment. It also includes a gender-equality raise meant to narrow the pay gap between men and women. Negotiators will now present the deal for approval from their respective unions. It will only become binding once enough unions from across all industries sign on to the deal. Government Plans Income Tax Cuts The government has responded to the pay deal by producing a proposal for the income tax cuts it promised. Next year the taxation scale will be reduced by half a percentage point, and in 2006 by one percentage point. The proposal also promises further cuts in 2007. The three-year drop in taxes will cost the government 1.7 billion euros. The cuts were designed to help employers and unions come to an agreement on pay raises. The government has also offered to increase spending on industry research and development to help offset employers' costs. YLE24, Finnish News Agency