Statutory Earnings-Related Pension Scheme for the Self-Employed

Mandatory insurance

• Self-employed persons (aged 18 or older) who have worked as self-employed persons for at least four months and whose estimated annual confirmed earnings are above the minimum insurance limit.
• Insurance obligation ends at age 70 for persons born after 1961.¹

Voluntary insurance

• Self-employed persons with earnings below the minimum insurance limit.
• Self-employed persons who receive an old age pension.

General finances

• Mainly PAYG-financed from pension insurance contributions.
• Partly tax-financed, if pension expenditure exceeds incoming contributions (approx. 25% of expenditure in 2020).

Contribution rates

• Fixed share of estimated annual earnings (24.1%; higher for persons aged 53 to 62 until the end of 2025²) with contribution assessment ceiling (EUR 180,750 in 2020) and with minimum insurance limit (EUR 7,958.99 per year in 2020); lower contribution rates apply for the first four years of self-employment.
• Contribution base: estimated annual confirmed earnings (based on the salary the self-employed person would pay for an employed person doing the same work as the self-employed).
• The self-employed person can choose to pay higher (10-100%) or lower (10-20%) insurance contributions temporarily.
• Pension benefits for unpaid (non-contributory) periods are financed jointly by all pension providers.

Taxation of contribution payments

• Contributions are tax-deductible.

• Same as for the statutory earnings-related pension scheme for private sector employees (TyEL).

• Same as for the statutory earnings-related pension scheme for private sector employees  (TyEL).

• Same as for the statutory earnings-related pension scheme for private sector employees  (TyEL).