Pension accrues on earnings from employment
For wage-earners, pension accrues on their earnings from employment. Usually, the earnings that accrue pension are the same as the salary that is subject to withholding tax.
We obtain earnings information from the Incomes Register; all employers are obligated to report the salaries they pay to the Incomes Register. Pension is calculated on gross earnings.
For self-employed persons, pension accrues on their confirmed income under YEL insurance.
Pension accrues at a rate of
- 1.5% per year for 17–52-year-olds and from the age of 63 on
- 1.7% per year for 53–62-year-olds (effective until the end of 2025)
Pension is calculated one year at a time. The formula is simple: 1.5% of annual earnings is divided by 12, which gives you the amount of monthly pension that has accrued in the course of one year.
The amount of pension is also affected by
- the number of employment years
- certain unpaid periods that accrue pension
- the life expectancy coefficient, which is based on year of birth
- a possible increment for deferred retirement after reaching the minimum retirement age
- index increments
You can see the amount of pension you have accrued in your pension record in Varma’s online service.
National pension can supplement your pension if your earnings-related pension is below Kela’s income limits:
- EUR 1,373.30 if you live alone
- EUR 1,230.63 if you live with another person