Taxation of pensions
Pensions are taxable income just as other earnings are. Therefore we require your tax card for pension income. If you receive rehabilitation allowance or assistance, we require your tax card for your social-benefit income. If you receive a rehabilitation increment, we require your tax card for your pension.
Apply for a pension tax card right away
Apply for a pension tax card immediately once you have received the pension decision from us. You cannot use your old tax card for earned income.
Apply for the pension tax card from the tax authority. For this you need the following:
- the pension decision you received from us
- information on your income, tax withheld and deductions since the start of the year
Once you have applied for a tax card, no actions are required from you; the tax authority will send your tax card to us.
In the unfortunate event that you do not apply for a pension tax card in time, we will have to withhold 40 per cent tax on your pension. The overpaid tax will be paid back into your account once you have applied for a tax card and we have received it from the tax authority. The sum will arrive into your account within around a week. Please note that we can only refund taxes in the year that we withheld them.
When the amount of pension changes
The amount of your pension may change for three reasons.
Firstly, because the earnings-related pension index changes. It changes at the beginning of January every year. Your pension will then change automatically, and no actions are required from you.
Your net pension may also change due to a change in the tax percentages. They change at the beginning of February every year. You do not need to send us a new tax card; the tax authority will do it automatically for you.
The amount of your pension may also change if you receive a new pension decision. If the amount of your pension changes by more than 20 euros per month, apply for a new pension tax card. The tax authority will send it to us on your behalf.
Also apply for a new pension tax card if you wish to decrease your tax percentage. If you wish to increase your tax percentage, you can do it in our MyPension service.
We will report your pension income to the tax authority
At the beginning of each year, you will receive a letter from us, stating how much pension you have been paid during the year and how much tax we have withheld on it. The letter also states the amount of your pension in the following year.
We will also report the amount of pension you have received, i.e. your pension income, to the tax authority.