Have a look: how much can you invest tax-free in the third pillar this year?

As taxes are calculated per calendar year, December is a good time to look at this year’s income and make a possible additional contribution to the third pillar to make the most of the tax incentive.


  • For your contribution to be credited for this year, the money must reach your third pillar account at Pensionikeskus by 30 December. The contribution date is the date of issue of the units, which is one day after receiving the money.
  • In the last days of the year, interbank payments may be slower than usual due to public holidays. In any case, we recommend making the final contributions to the third pillar no later than 28 December. Instructions for making a contribution can be found here.
  • If you are not sure how much you have already contributed to third pillar pension funds this year, you can easily get an overview by logging into your account. If you have also invested in a third pillar insurance product, you should ask the insurance company for information.

The tax incentive will give your money considerable leverage.

You can use the tax incentive for saving up to 15% of your gross income in the third pillar. If you make contributions from your net income, you will receive an income tax refund on that amount in the spring. For those earning more than 40,000 euros before taxes, the maximum annual contribution to the third pillar is up to 6,000 euros.

While there is no obstacle to saving more money in the third pillar, it is not sensible to do so. The reason is the logic behind the third pillar tax calculation – in the future, income tax will be automatically deducted from the pension payments, i.e. any money you have saved without receiving a tax refund will effectively be double-taxed when disbursed.

To make the most of the income tax incentive, it is wise to review exactly what is included in your gross income and how much of your total income from different sources you can save in the third pillar.

Wages and allowances

People mainly save in the third pillar from their wages. If your wages are the same every month, it is easy to calculate the 15% contribution. You can use the calculator on the Tuleva website, which also considers the effect of the monthly tax-free income of 500 euros.

Suppose your wages have fluctuated during the year. In that case, it’s a good idea to check your income information on the Tax Office website (select “My income” from the “Registers and inquiries” menu) or ask the accountant at your workplace for exact information on the payments made in that calendar year.

It is important to note that cash-based accounting, i.e. the date of receipt of income applies in this case. If your December wages are paid to you within December, they count as this year’s income. If your December wages are paid in January, they count as next year’s income.

Attention! If your employer has also made contributions to the third pillar for you, these will be taken into account, too. Make sure that the total contributions made by your employer and by you do not exceed 15% of your annual gross income!

The most common state allowances to be taken into account for the third pillar are maternity leave benefit and the monthly parental benefit. As income tax is withheld on both these benefits (you can see this information at the tax office), they count towards your gross income for third-pillar purposes. On the other hand, the monthly child allowance of 60 euros is not included in the gross income calculation, because no income tax is withheld from it.

The most important thing is to understand whether income tax has been withheld from the money received. For example, royalties and other types of income and benefits subject to personal income tax also qualify as gross income. Whether or not social tax has been withheld is not relevant for third-pillar accounting.

Income from investments and rental income

Calculating your investment income is a little more complicated. Unlike wages and benefits, a large part of investment income is not visible to the tax office before the end of the year, and you have to check your investment income yourself.

The most common interest income that individuals receive comes from crowdfunding. To calculate how much you should additionally save in the third pillar, you need to retrieve an annual report or overview of the interest income earned from the relevant online environment. Using this information, you can calculate the 15% you can transfer to the third pillar. In your income table at the tax office, you will see any interest accrued on your bank deposits – that also counts as income!

If you rent out your personal property, your rental income should be easy to calculate if it’s the same amount every month. If you earn from short-term rent (such as Airbnb, Booking), you should obtain a statement of your earnings from the relevant web portal.

The situation with stocks is somewhat more complicated, as there are more tax nuances. If you have sold securities (stocks), these count toward your gross income only if you are not using an investment account system. If you have declared the account where you keep your stocks as an investment account, you cannot count this type of income for third-pillar purposes.

If you have received dividends on which the payer has withheld income tax in full, these do not count toward your gross income (for example, if you own a company and have paid dividends as the company owner).

According to the new dividend accounting rules, which allow for applying different tax rates (some dividends at 20% and others at 14%), the part of 14% dividends on which 7% is withheld for private individuals counts toward gross income. Dividends taxed at a lower rate are also taken into account when calculating the limit of the tax incentive. You should pay attention to the different tax rates here. Unfortunately, neither the Tax Office nor Pensionikeskus have provided clear instructions on how to calculate this type of income.


How to transfer your second pillar to Tuleva?

On average, you will pay three times less in fees with Tuleva than in other pension funds – this means more money is left for you. Our investment rules are based on best practices, which have helped people grow their savings the most. Our fund manager is owned by Tuleva members – they are pension savers as well. They will make sure we keep our fees low, and act in the best interests of pension gatherers. You can read more about our funds here.

You do not need to be a member of Tuleva to transfer your pension. It’s free to transfer your pension to Tuleva. If you wish to also become an owner of your pension fund later on, you can always join us as a member.

Who regulates and supervises the activities of Tuleva Funds?

Tuleva holds an activity licence from the Financial Supervision Authority for managing funded pension plans and Tuleva funds are also registered with the Financial Supervision Authority. The internal and external supervision of Tuleva funds works the same way as for any other funds. Even if the management company goes bankrupt, investors’ assets in the second pillar of the pension system will be safe. In such a case, our custodian institution Swedbank and the Financial Supervision Authority would take over the management of Tuleva funds. The Financial Supervision Authority would be tasked with finding a new management company.. The funds in the pension funds can never be used for other purposes such as covering the management company’s debts or as a bankruptcy estate. There is not even a hypothetical possibility of some Tuleva employee “stealing” the money in pension funds: the assets are on accounts held at the custodian bank, not with Tuleva.

Your money is just as protected in Tuleva, as it is in a big Scandinavian bank.  You will just pay significantly less in fees. Here is a guide on how to transfer your pension to Tuleva if you are not a member: 

How to transfer your pension:

To help ou not get lost in internet banks we have prepared a step-by-step guide for you to help with your fund transfer. If you are a client of Swedbank, LHV or SEB you can use your internet bank to switch funds; it doesn’t matter where your pension currently is. It doesn’t cost anything to use your internet bank to transfer your funds. If you wish to use the Pensionikeskus web page, then it costs 65 cents for directing your future payments to Tuleva and 1,53€ to transfer current funds.

Exiting your old fund is mostly free, only Swedbank has an exit fee of 0,1% of total unit value. However, this is a small amount, that you can make up quickly due to lower management fees in Tuleva funds.

Pick, which channel you would like to use to transfer your pension:

  1. LHV
  2. SEB
  3. Swedbank
  4. Pensionikeskus

Click on your preferred choice, and we will take you to the correct spot in this post. Good luck with your pension!

In case you need to update your ID card certificates, then you can find this info here.


If you are a client of LHV bank this is how you can change funds to Tuleva:

  1. Log into your internet bank: LHV
  2. In the left hand menu pick “Pension” and find subsection “Fund switch”
  3. Click on “Choose another fund”
  4. Tuleva World Stocks Pension Fund can be found under the aggressive selection, Tuleva World Bonds Pension Fund can be found under the conservative selection
  5. Pick your preferred fund and click “Continue” to move on
  6. Check to see, if your future payments are assigned into the fund you chose
  7. Check to see, if your current units are assigned to transfer into the fund you chose (*the exchange is carried out based on monetary value of units)
  8. Use the checkbox to verify that you’ve had the chance to read the Terms and Conditions
  9. Click the green “Accept” button and you’re done!


If you are a client of SEB bank, this is how you can change funds to Tuleva:

  1. Log into the internet bank: SEB
  2. From the top menu pick Saving/Pension
  3. Click on the selection “Pension second pillar”
  4. Click the black button “Pension transfer application”
  5. Tick the option “I wish to direct future payments into another fund”
  6. Tick the option “I wish to exchange pension fund units”
  7. Pick your preferred Tuleva fund for your future payments
  8. Pick your preferred Tuleva tund to transfer current units (*if you wish to transfer all units, write “100” into the box, *the exchange is carried out based on monetary value of units)
  9. Check to see that all selections are correct
  10. Click on the black button “Accept” – you’re done!


If you are a client of Swedbank, this is how you can change funds to Tuleva:

  1. In the left hand menu click “Investing, saving, pension”
  2. Click on the subsection PENSION and choose “Second pillar”
  3. In the middle of the page click “Choose a pension fund”
  4. Pick your preferred Tuleva fund for your future payments*
  5. Pick your preferred Tuleva fund to transfer current units* (if you wish to transfer all units, write “100” into the box,*the exchange is carried out based on monetary value of units)
  6. Make sure you’ve ticked the boxes in front of your selections.
  7. Click on the orange button “Choose”
  8. Tick the box to accept the Terms and Conditions
  9. Click on the orange button “Accept” – you’re done!


On the Pensionikeskus home page this is how you can change funds to Tuleva:

  1. Log in to pensionikeskus.ee
  2. In the left hand menu pick “My applications”
  3. Pick “Selection application”
  4. Choose, which Tuleva fund you wish to direct your payments into.
  5. Check all necessary information, and pay for the application using a bank link (0,65 euros)
  6. Pick “Fund transfer application”
  7. Pick which Tuleva fund you wish to transfer your units into (*the exchange is carried out based on monetary value of units)
  8. Check all necessary information, and pay for the application using a bank link (1,5 euros)

If you have any other questions we’re here for you! Write to us tuleva@tuleva.ee or call us 644 5100.

Read the prospect of our funds here, and read our fund manager Tõnu’s article on our investment strategy and if necessary, consult an expert.

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