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PRSA tax incentive question

  • 20-10-2006 9:00pm
    #1
    buzzerxx
    Registered Users, Registered Users 2 Posts: 916 ✭✭✭


    Hello,

    I am in my late 30's and only started my prsa 2 years ago,i'm a self employed sole trader.

    For the 2005 year i contributed €8,586. Could anyone explain to me how the government tax incentive on a prsa is calculated and actually realized?

    Is this example correct?;
    Save €100:if on a higher tax rate costs me €52.
    Save €100:if on a lower tax rate costs me €74.

    Thanks in advance if you can enlighten me.:confused:


Comments

  • #2
    JackieChan
    Closed Accounts Posts: 1,829 ✭✭✭JackieChan


    Hi Buzz,
    What happens is that the PRSA payment is taking away from gross earnings and the rest is taxed as normal....don't forget to claim your PRSI back too(this is done seperately). PM if you want more info.
    The two examples that are given are correct.
    JC


  • #3
    buzzerxx
    Registered Users, Registered Users 2 Posts: 916 ✭✭✭buzzerxx


    Thanks for the prompt response D.

    My bookkeeper was explaining to me that this is the way it is done so i was just getting a second opinion.

    Thanks again. :)


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