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Awkward pension question

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Comments

  • Registered Users, Registered Users 2 Posts: 5,904 ✭✭✭The J Stands for Jay


    The tax benefit is applied by not including your pension contributions in the calculation of income tax.



  • Registered Users, Registered Users 2 Posts: 453 ✭✭slystallone


    For tax relief on contributions, does the employer contribution get chucked into that percentage, for example the 30-39 bracket if an employer pays a 5% contribution, do I pay 15% to bring me up to the maximum relief mark of 20%? or is it just my own contributions are counted so I should put in 20% myself, if I want to max out on the relief.



  • Registered Users, Registered Users 2 Posts: 14,330 ✭✭✭✭Geuze




  • Registered Users, Registered Users 2 Posts: 453 ✭✭slystallone


    It is not very clear from that link.



  • Registered Users, Registered Users 2 Posts: 1,999 ✭✭✭JVince


    In a way it is as revenue don't look at who is giving what into the fund.

    But they don't allow you add the company contribution into your salary threshold. EG If you earn €80k and the company pays 8k contribution, it is the 80k figure the 25% is worked from and not 88k.



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  • Registered Users, Registered Users 2 Posts: 453 ✭✭slystallone


    Have a look at my question above and let me know the answer.



  • Registered Users, Registered Users 2 Posts: 23 FlipFlopAgain


    Read the last sentence from the link. It says:

    Employer contributions to an employee's scheme are not taken into consideration when calculating the employee's earnings threshold.

    Typical company pension might be 5% employee contribution taken directly from payroll with tax relief applied at source and 5% matching employer contribution.

    So, if you're between 30 and 39, you can contribute an additional 15% of your income to your pension (so long as your total income is under the ceiling of €115,000). I.e. the employer contribution is not counted when working out your maximum contribution that gets tax relief.

    You can either ask your company HR/payroll to make the additional contribution out of monthly pay and get tax relief at source. Or you can make a direct contribution to your pension scheme out of your after-tax income and claim the tax back from Revenue. You will need to check with your pension scheme about making direct contributions. Most allow it (but some might not).



  • Registered Users, Registered Users 2 Posts: 406 ✭✭cpb


    With regards to a company direct payment to an employees PRSA,

    Does it need to go through the paye system or is it employers contribution that qualifies to be tax free

    for both company and employee, as per revenue https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/other-benefits/pension-contributions.aspx



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