Pension tax - Confusing

ando

hi,

Sorry I need someone to confirm I have this right... If I want to put in €100 into a penion per month and am taxed at the higher rate, it will actually cost me €60 yea? So I just need to claim the €40 back from Revenue?

Buddy Bubs

You are correct on the figures. There are thresholds you cant exceed though based on your age and your salary, i.e you cant put over a certain % into it which gets higher as you get older

If you are paying into a company pension you will have tax relief applied through payroll, same with a prsa if done through payroll, if its a personal pension you will have to reclaim from revenue yourself at end of each year.

Golden Horde

Yes - If you are in an occupational scheme, €100 is deducted from your gross pay and your net pay will be €60 down. Your employer will send €100 to your pension. As an employee you get the tax relief each month.

If you are self employed or operate through a PRSA or similar, you'll get the tax relief from Revenue at the end of the year.

ando

So I ran it by my finance dept and they said the €100 is not taxed. The €100 is taken from my gross (which would be taxed normally) and then that €100 is put into my pension without being taxed. No claiming back anything.

Not really what I was expecting but it must be the way its done

Geuze

Correct, that is what happens each payday for hundreds of thousands of workers.

Pension contribution and tax relief are both dealt with at source.

If you are self-employed, or have a personal pension, then you may have to claim the tax relief yourself.

ando

https://www.boards.ie/discussion/comment/117669893#Comment_117669893

Ok thanks for clearing that up