Pensions and tax

Tax relief for pension contributions

You can get Income Tax (IT) relief against earnings from your employment for your pension contributions (including Additional Voluntary Contributions (AVCs)). Pension contributions to these types of pension plans:

  • occupational pension schemes
  • Personal Retirement Savings Accounts (PRSAs)
  • Retirement Annuity Contracts (RACs)
  • qualifying overseas plans.

This is subject to the limits below. IT relief is given at your ‘marginal’ (highest) IT rate.

There is no relief from Universal Social Charge (USC) or Pay Related Social Insurance (PRSI) for employee pension contributions.

Limits for tax relief on pension contributions

Tax relief for employee pension contributions is subject to two main limits:

  • an age-related earnings percentage limit
  • a total earnings limit.

Age-related earnings percentage limits

You can get tax relief up to the relevant age-related percentage limit of your earnings in any year. This relief is only from the employment in respect of which the contributions are made.

Age-related percentage limit for tax relief on pension contributions
AgePercentage limit

Under 30

 15%

30-39

 20%

40-49

 25%

50-54

 30%

55-59

 35%

60 or over

 40%

For example, an employee who is aged 42 and earns €40,000 can get tax relief on annual pension contributions up to €10,000.

Total earnings limit

The maximum amount of earnings taken into account for calculating tax relief is €115,000 per year.

PRSAs

Employer PRSA contributions are:

  • deemed for tax relief purposes to be made by the employee
  • added to the employee's actual contributions to determine if the above limits are reached
  • treated as a taxable employer benefit received by the employee.

Tax relief for PRSA AVCs is based on the appropriate age-related percentage limit of the income from the employment in question. (As reduced by any employee contributions to the pension scheme relating to the employment.)

You may pay a once-off or special pension contribution after the end of a tax year, but before the following 31 October. If you do, you can choose on or before 31 October, to have the tax relief for the contributions allowed in the earlier tax year. When you use the Revenue Online Service (ROS), the deadlines for paying contributions and making this choice are extended.

Overseas pensions plans (migrant member relief)

You may be coming, or returning, to Ireland. If you are, you can get tax relief for pension contributions made to pre-existing plans with a pension provider in another EU Member State.

Where the relief applies, the contributions to the overseas plan are treated as if they were made, as appropriate, to:

  • an occupational pension scheme
  • PRSA
  • RAC.

How to claim the tax relief

If you are a PAYE worker

Usually your employer deducts the contributions directly from your pay, and will give you the tax relief due. If your employer does not deduct the contributions, use myAccount to complete a Form 12.

If you are self-employed

Sign into ROS to complete a Form 11.

Next: Taxation of social welfare pensions