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Pension taxation

Earnings-related pension is subject to withholding tax. The taxation of pension income is based on the Tax Administration’s instructions and tax legislation.

Obtain a tax card for pension income when your pension begins

Obtain a tax card for your pension income from the tax authority as soon as possible after receiving your pension decision. If you live outside of Finland, Varma will obtain a tax card for pension income from the Finnish tax authorities on your behalf.

The tax rate for employment income can no longer be used as the withholding rate for pension as of 2016. It is therefore advisable to obtain a tax card for pension income as soon as the pension decision has arrived. In the coming years, we will request each year a new tax rate from the tax authority for the pensions that are being paid.

If tax information is missing, the tax rate is 40%

If the tax rate for pension income is not known by us at the time when the payment of pension begins, we are required, under the tax legislation, to withhold 40% tax for both future and retroactive pension.

We will refund any overpaid tax as soon as we receive your tax card for pension income from the tax authority.