Retirement: are premiums included in the calculation of your pension?

In addition to the gross salary, a worker receives other income. Are all these incomes taken into account in the calculation of the pension?

Professional life is divided into two parts , there is the active period and also the passive period. The first represents the amounts during which you are activated in your work . The second represents retirement. Although separated, these two eras are complementary .

Your income during the active period determines the amount of your retirement pension. Thus, it is also important to know what are the income taken into account in the calculation of your retirement pension. Regarding this, TF1 Info asked the question: “Do premiums count in the calculation of retirement? »

Income taken into account to calculate retirement

Already, to calculate the amount of your pension , the following must be taken into account :

• Your average annual income,
• The rate applied to this average annual income,
• The period of insurance for the activities that you also carried out as an employee.

To calculate your average annual income, your employer does not only base itself on your gross salary . However, other income that is not exempt from contributions must also be taken into account. The following income are subject to old-age contributions :

• Your basic salary,
• your premiums,
• Extra time,
• Maternity daily allowances.

The rate applied to this average annual income depends on your age, your situation and also your duration of insurance. According to the case, this rate varies between 37.5 and 50% .

Indeed, the duration of insurance for the activities you have carried out as an employee is calculated per quarter. To receive a full withdrawal, you have to complete between 160 and 172 quarters according to your year of birth. For those born between 1970 and 1972, the number of terms required is 171 (42 years and 9 months).

Les revenus exclus du calcul de la pension de retraite

Some income are also exempt from old-age contributions . This exemption may be due to a decision of the State. For example, the first Macron is exempt from income tax and employee contributions until December 31, 2023.

The amount of income is an element that makes he is exempt from old-age contributions . If your income exceeds a certain ceiling, it will no longer be included in the pension calculation basic. This threshold is the social security ceiling. This sum is revised each year. For this year 2023, this ceiling is set at 43,992 euros gross per year , or 3,666 euros gross per month.

Relayed by TF1 Info, published on January 5, 2023, Virginie Dupeyrat, president of the firm MB Consultants specifies:

“Anything above this threshold does not count towards your basic pension”.

The term basic pension is very important here. Let's go beyond this ceiling, earnings are not taken into account in the calculation of the basic pension . in revenge, they are taken to calculate supplementary pensions . TF1 Info clarified:

“The premiums paid during work are included in the Agirc-Arrco contribution base and therefore they are subject to contribution within the limit of eight social security ceilings”.

Do bonuses count in the calculation?

TF1 Info in its section 'The 20H answers us' answered the question “Do premiums count in the calculation of retirement? » . However, before answering this question, first define what is meant by premium. The premium is an amount that an employer pays employees as an incentive or as a reward apart from the salary .

Also, the answer to the question is yes. Already as mentioned above, the premiums are taken into account in the calculation of the average annual income . The latter intervenes in the calculation of the pension.

Moreover, the Pension Insurance website confirms this:

“All salaries, subject to old age contribution, reported on the career statement are taken into account, including seasonal jobs and paid internships”.

As the income taken into account to calculate your pension is that of the 25 best years of the general scheme . It is highly possible that the years in which you have received bonuses are deducted .

That's it, now you know that the bonuses are taken into account in the calculation of the pension . If it is not taken into account in the basic pension, he will consider himself in the supplementary pension .

Source : Tf1info