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Employee Pension Contributions

  • 04-01-2018 9:26am
    #1
    Avatar MIA
    Closed Accounts Posts: 6,750 ✭✭✭


    Hello,

    Currently our company does not pay any contributions to employee pensions. I imagine it'll be compulsory in the next few years. However, I'm looking into the benefits of pension schemes and will be making a proposal to the company owners.

    From an employee point of view their pension contribution is deducted from their Gross pay and they get tax relief. I imagine their is no such reduction in Gross pay from an Employer point of view to reduce the ER PRSI due to employee contributions - just checking. :)

    There are other benefits to setting up a company pension scheme, such as employee retention. Plus tax relief on ER contributions.

    Thanks


Comments

  • #2
    tanit
    Registered Users, Registered Users 2 Posts: 325 ✭✭tanit


    Avatar MIA wrote: »
    Hello,

    Currently our company does not pay any contributions to employee pensions. I imagine it'll be compulsory in the next few years. However, I'm looking into the benefits of pension schemes and will be making a proposal to the company owners.

    From an employee point of view their pension contribution is deducted from their Gross pay and they get tax relief. I imagine their is no such reduction in Gross pay from an Employer point of view to reduce the ER PRSI due to employee contributions - just checking. :)

    There are other benefits to setting up a company pension scheme, such as employee retention. Plus tax relief on ER contributions.

    Thanks

    Pension's possible benefits for EEs and ERs depend on the scheme set up; you might want to research the whole thing here
    Tax relief on ERs contributions
    Tax relief on Pension contributions EEs

    If it's Pension Scheme contributions by the ER is not treated as BIK, if the contribution by the ER is to a PRSA it's treated as such although those contributions are not included for Prsi and USC (EE's contributions are taken into account for USC and Prsi liability calculations). There are other issues but they both benefit from the not having to pay ER's Prsi

    You might want to get more information from a pension advisor and maybe there is someone around with more information


  • #3
    Avatar MIA
    Closed Accounts Posts: 6,750 ✭✭✭Avatar MIA


    tanit wrote: »
    Pension's possible benefits for EEs and ERs depend on the scheme set up; you might want to research the whole thing here
    Tax relief on ERs contributions
    Tax relief on Pension contributions EEs

    If it's Pension Scheme contributions by the ER is not treated as BIK, if the contribution by the ER is to a PRSA it's treated as such although those contributions are not included for Prsi and USC (EE's contributions are taken into account for USC and Prsi liability calculations). There are other issues but they both benefit from the not having to pay ER's Prsi

    You might want to get more information from a pension advisor and maybe there is someone around with more information

    I've seen that, but thanks.


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