Ilmarinen / Pension and rehabilitation / On a pension / Working while on a pension
Working while on a pension
You can work even while on a pension. Working while on a pension pays off; pension will accrue until you reach the upper age for old-age pension. As an employee, you will accrue a new pension on your earnings and as a self-employed person on your YEL income.
Pension and working
You can work as much as you like alongside your old-age pension and partial old-age pension, without it affecting the gross pension that you are drawing. If you work while on a disability or years-of-service pension, you can only earn a specific amount. To find out your personal earnings limit, check the MyPension service or contact our customer service.
If you have already worked while on a pension, you can view the income you have earned alongside your pension in the MyPension service. Remember also to apply for the new pension in due course.
You will accrue pension on your gross earnings or, if you are self-employed, on your YEL income, until the upper age for old-age pension as follows:
- 1.5 per cent per year
- 1.7 per cent per year for persons aged 53–62 during the transition period 2017–2025.
Example of calculating the pension accrual: A 65-year-old employee earns EUR 8,000 per year. The pension accrual rate is 1.5 per cent. The pension accrual is (8,000x1.5 %) / 12 = 10. The employee earns EUR 10 more pension per year. Life expectancy coefficient reduces the amount.
Pension insurance contributions end at the upper age for old-age pension
You can continue working even after you have reached your upper age for old-age pension. However, you will not accrue more pension for that work. Therefore, earnings-related pension contributions will no longer be deducted from your wages, which increases your take-home pay.
Impact of a pension and pay on Kela’s benefits
If you are drawing another benefit, such as housing allowance,
please note that your pension and your pay usually have an impact on Kela’s benefits. You should check this with Kela.
Taxation of pension and work
If you work while on a pension, you need two tax cards, one for your pension income and one for your earned income. We require the pension tax card to be able to withhold the right amount of tax on your pension. Submit your tax card for earned income to your employer as usual. Your final tax percentage depends on the amount of your pension income and pay and related deductions during the calendar year.
Read more about the taxation of pensions
Working during different pensions
When you work while on an old-age pension, you can earn as much as you like without your pay affecting your gross pension amount.
If you want to continue to work for your current employer and start drawing pension at the same time, follow these steps:
- Agree with your employer on the termination of your current employment relationship.
- Apply to us for an old-age pension.
- Make a new employment contract with your employer. At the same time, agree on how your work will change. It must change materially in order for you to be able to work and draw a pension at the same time. You can, for example, switch from full-time to part-time work.
You may be considering continuing at work longer than you originally intended and retiring on old-age pension later. If you do that, your pension amount will be increased by a permanent increase for deferred retirement, which is 0.4% per month.
Read more about how you accrue a new pension >
When you work while on a partial old-age pension, you can earn as much as you like without your pay affecting your gross pension amount. On a partial old-age pension, you can continue to work as before or change the amount of your work input.Agree on the changes in your work with your employer.
If you draw a disability pension or years-of-service pension, you can work up to a specific limit. How much you can earn depends on your personal earnings limit. The earnings limit refers to the maximum gross pay that you can earn each month. The earnings limit depends on your previous income and the type of pension you draw.
Your original earnings limit is stated in the pension decision you received. Your earnings limit changes at each turn of the year. To find out your latest earnings limit, check the MyPension service or contact our customer service.
Your earnings limit while on a disability pension
Your earnings limit varies according to whether you draw a disability pension or a partial disability pension. Your earnings limit
- while on a disability pension is 40 per cent of your average income level before your disability began.
- while on a partial disability pension is 60 per cent of your average income level before your disability began.
However, you can earn at least EUR 922.42 per month (year 2023). As a self-employed person, your YEL income can be at least EUR 11,069.04 in 2023.
Your earnings limit while on a years-of-service pension
While on a years-of-service pension, your earnings limit is EUR 922.42 per month (year 2023). As a self-employed person, your YEL income can be at most EUR 10,416.51 in 2022.
If your earnings exceed the earnings limit
Make sure that your pay does not exceed your earnings limit. However, if your pay exceeds the earnings limit, we may have to suspend the payment of your pension. Unduly paid pension may have to be recovered. A pension can be suspended for no more than two years. If a disability pension has been suspended for more than two years, the pension will be terminated.
If your earnings are going to exceed the limit, or if you have any further questions about the earnings limit, contact our customer service.
If you draw a surviving spouse’s pension, you can work freely without your pay affecting your gross pension.
Self-employment while on a pension
You can pursue entrepreneurial activities even while on a pension. If you continue as a self-employed person or start entrepreneurial activities while on a pension, you may require YEL insurance.
If you retire on an old-age pension as a self-employed person, your mandatory YEL insurance ends automatically, whether you continue your work as an entrepreneur or not. If you wish to accrue more old-age pension while on an old-age pension, you can take out voluntary YEL insurance. Apply to us for the pension accrued to you after you have reached your upper age for old-age pension.
As a self-employed person, you can retire on a partial old-age pension and pursue your entrepreneurial activities without limitation. It is important that your YEL income corresponds to the value of your work input, just as before your retirement. So keep your YEL insurance in force if you continue your entrepreneurial activities.
If you reduce your working hours and retire on a partial old-age pension, reduce your YEL income so that it matches your new reduced work input. If you end your entrepreneurship altogether, terminate your YEL insurance.
Read more about the YEL income and its impact on your pension an other social benefits >
You may need YEL insurance if you draw a disability pension. YEL insurance is mandatory alongside a disability pension if your income exceeds the minimum YEL income limit. However, your YEL income must not exceed your earnings limit.
Apply for the pension for work carried out during retirement separately
Remember to apply for the pension accrued during retirement; it does not begin automatically. Apply for the pension accrued during retirement by filling in the old-age pension application.Fill in the pension application in the MyPension service