Pension amount and contributions

Your earnings-related pension will be calculated based on all your earnings from both employment and self-employment. When you are self-employed, you will earn pension funds under the Self-employed Persons’ Pensions Act based on your confirmed annual income.

Your pension funds will grow by 1.5% of your confirmed annual income.

Pension calculation self-employed

As a result of the 2017 pension reform, your pension funds will grow by 1.7 per cent between the years 2017-2025 if you are between the ages of 53 and 62.

In addition to your confirmed income, your pension funds will grow also for studies leading to a degree, for certain social security benefits, and for periods when you take care of your own children (at home) under the age of three.

Example of how your pension funds grow
Your confirmed income from self-employment €28,000
Accrual rate 1.5%
Monthly amount of pension funds that your earn €28,000 x 1.5% ÷ 12 = €35
If you keep your confirmed income at this level for 10 years, your will have earned a monthly pension of €350.

The amount of your pension funds that you have earned from self-employment is based on your confirmed income throughout your period of self-employment. If you have raised or lowered your earnings-related pension contributions at any point during your self-employment, that will also be taken into account.

It is important that you keep your confirmed income on the correct level at all times. If you raise your confirmed income in the last years of your self-employment, it will not significantly affect the amount of your pension funds.

Insurance contributions

The higher contributions you pay, the higher your pension will be.

The contribution will be collected based on your confirmed income stated in the insurance contract.

Your pension contribution when you are self-employed
If you are under 53 or over 63 If you are between 53 and 62 
24.1% 25.6%

You can deduct the contributions you pay in your taxation to their full amount. The Ministry of Social Affairs and Health confirms the YEL contribution rate each year.

Example of how much your contributions are and the pension funds you earn (in 2018)
How much you would pay in contributions/year
Your confirmed income from self-employment €28,000
Your contribution rate (you are under 53-years-old) 24.1%
The amount you pay in pension contributions per year €28,000 x 24.1% = €6,748 (ca €562/month)
  How much pension you earn/month
Your confirmed income from self-employment  €28,000
 Accrual rate  1.5%
How much your pension funds will grow per month €28,000 x 1.5% ÷ 12 = €35
Your year of birth 1967
Your retirement age 65 years and 4 months
Your expected time life expectancy after retirement (according to Statistics Finland) 22 years and 2 months
(= 266 months)
The total amount of pension you would get 266 months x 35 euros = €9,310
With the above assumptions, the contributions you have paid (€6,748) will give you an old-age pension of €9,310 in total.

Money value adjustments have not been taken into account in the example. As stated in the pension acts, the accrued pension will be adjusted with the valid wage coefficient up to the time of retirement and with the earnings-related pension index after retirement.

Reduction for newly self-employed

If you are a newly self-employed worker, you will receive a 22% discount on your YEL contribution for four years (48 months). If you stop being self-employed before the 48 months are up, you can use the remaining discount months later if you take up self-employment again.

Flexible contributions

You can make your future pension grow more thanks to flexible contributions. This means that, when you are doing well, you can temporarily raise your insurance contribution by 10-100%. When times are tough, you can temporarily reduce your contribution by XX-XX%. In that case, you will earn less in pension funds during that period.

You can pay higher contributions every year if you want, but the restrictions for reducing your contributions are stricter. You have to notify your pension provider of your changed contributions. The change is valid for one year at a time. Increasing or reducing your contributions does not affect your confirmed income, nor does it affect the benefits granted by the Social Insurance Institution of Finland (Kela).

Examle of flexible contributions
Example of how you earn more pension when you increase your contribution
Your confirmed annual income €28,000
Your contribution rate 24.1%
Amount you pay in contributions each year €28,000 x 24.1% = €6,748
Amount you pay in increased contributions/year €2,500
Your total income from self-employment used when calculating your pension (following the increase in contributions) (€6,748 +€2,500) ÷ 24.1% = €38,373

Interests may also slightly effect the result depending on at white time of year you pay the additional contribution. If you pay it at the beginning of the year, it results in a higher total income than if you increase your contributions with the same amount towards the end of the year.

Example of how you earn less pension when you decrease your contribution
 Your confirmed annual income  €28,000
 Your contribution rate 24.1%
Amount you pay in contributions each year  €28,000 x 24.1% = €6,748
Amount that you decrease your annual contributions with (10% decrease] €520
Your total income from self-employment used when calculating your pension (following the decrease in contributions (€6,748-€520) ÷ 24.1% = €25,842

If you need to raise your confirmed income permanently, contact your pension provider. Together, you can adjust your confirmed income to the correct level.

Calculate your pension

Use the pension calculator to estimate how much pension you will receive.

Enter the salary as an integer, for example. 2500.
Retirement age ?

Your retirement age is the first possible age at which you can retire on an old-age pension.

- Pension estimate/month - €/month
Your target retirement age ?

Because people are living longer, the life expectancy coefficient has been introduced. It reduces the pension you receive. To offset the effect of the life expectancy coefficient, you need to work an additional length of time. This later retirement age is called your target retirement age.

- Pension estimate/month - €/month

Check how your selected retirement age affects your estimated pension amount.

Chosen retirement age

The selected retirement age is 63 years and 0 months Estimate of your pension - €/month
On the calculator

This calculator will calculate the amount of your earnings-related pension only. If you get a low earnings-related pension, you may qualify for a national pension. The calculator does not calculate your partial old-age pension or your disability or years-of-service pensions.

The calculator calculates your pension based on the wage you have entered into the calculator and the laws that are valid in 2018. To get an estimation that is as close to the truth as possible, enter the amount of pension you had earned by the end of 2017. You can find that information on your pension record.

Your future pension amount greatly depends on how your own earnings develop and how the general earnings and prices develop.  In the calculator, your earnings are unchanged throughout the calculation period. The general wage and price level also remains the same in the calculator.

Your final pension cannot be calculated until just before you retire. At that point, the wage and price levels will affect the amount of your pension through the wage coefficient. The wage coefficient is used to adjust the earnings that form the basis of your pension to the level of the year in which you retire.

If you are a wage earner, you will start to earn a pension as of age 17. If you are self-employed, you will start to earn a pension as of age 18. The calculator will calculate your earned pension as of age 17. This calculator calculates your earned pension under the assumption that you will not retire early. The calculator calculates how much pension you have earned if you were born in 1949 or later. You can earn a pension until the age of 70, which is why you can use this calculator to calculate your pension to the age of 70 at the most.

The calculator calculates your pension under the assumption that the earned pension you have entered into it has been adjusted with the life expectancy coefficient. The calculator does not calculate the increase for late retirement.

The calculator states your target retirement age if you were born in 1987 or earlier. If you were born in 1988 or later, your target retirement age would be higher than the age at which your insurance obligation ends and higher than the age at which you can no longer earn more pension.

The extended life expectancy that affects the projected retirement ages and the life expectancy coefficient are based on the population forecast of Statistics Finland.

On terms and definitions

Retirement age
Each birth year group has its own retirement age. The retirement age for those born in 1965 and later is based on the currently estimated life expectancy. The projection is based on Statistics Finland’s population forecast for 2015, which has been updated at the Finnish Centre for Pensions.

Target retirement age
The target retirement age is the age at which the reducing effect of the life expectancy coefficient has been offset by the increment to your pension for late retirement. The target retirement age will be confirmed when you turn 62. If you are younger than that, it is an estimate.

Earning a pension and age at which insurance obligation ends
As of the beginning of 2017, you earn pension at a rate of 1.5 per cent of your annual gross wages. From 2017 to 2025, you will accrue a pension at a rate of 1.7% of your annual gross wages if you are between 53 and 62 years old. If you retire late (after you have reached your retirement age), your pension will be increased by an increment for late retirement (0.4% for each month that you retire late).

The age when you stop paying pension insurance and no longer accrue a pension will rise from 68 to 69 (for those born between 1958 and 1961) and 70 (for those born in 1962 and later).

Life expectancy coefficient
The pension you have accrued will be adjusted with the life expectancy coefficient. It is determined depending on your year of birth. The life expectancy coefficient will be confirmed when you turn 62 years. If you are younger than that, it is an estimate. The projection is based on Statistics Finland’s population forecast for 2015, which has been updated at the Finnish Centre for Pensions.