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Earnings to be reported

The earnings that form the basis for pension always consist of compensation for work performed. Usually, the earnings that accrue pension for your employee are the same as the earnings subject to withholding tax. Earnings under TyEL are, for example:

  • basic pay, such as monthly, hourly or contractual pay
  • fringe benefits, such as a company car or flat or free or subsidised meals
  • bonus and performance pay
  • compensation paid for a statutory period of notice
  • annual holiday pay and compensation
  • pensionable earnings
  • sick-leave pay paid by the employer
  • remuneration for positions of trust, if the individual has an employment contract with the payer

The following do not fall under TyEL:

  • tax-exempt travel reimbursements
  • tax-exempt per diem allowances
  • staff benefits, if they extend to all employees
  • compensation paid for a period of notice exceeding the statutory period
  • compensation for a dismissal during a temporary lay-off period
  • compensation for expenses such as working equipment and kilometre travel allowances
  • dividends or profit sharing

Please note that these are simplified examples. If you are unsure whether a certain compensation or benefit qualifies as earnings under TyEL, please call us at 010 192 102 to find out if the employee’s pension contribution should be withheld from it.

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