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Sportsperson's Relief

  1. Overview
  2. About the relief
  3. Interaction with pension products
  4. How to claim the relief

Interaction with pension products

Tax relief on contributions to a Retirement Annuity Contract (RAC) or a Personal Retirement Savings Account (PRSA) applies to an individual’s relevant earnings. Net relevant earnings are income from a trade or profession or non-pensionable employment.

Sportsperson's Relief is not taken into account when calculating an individual’s net relevant earnings.

An individual’s total contributions should not exceed the limits on tax relief for pension contributions. A 30% limit applies below the age of 50 years to certain categories of professional sportspersons.

  • Example 1

    Denise is a swimmer who retired from swimming in 2023. She wishes to claim Sportsperson's Relief. To do so, she reviewed her income from swimming for the 15 years prior to retiring (including 2023). She selected the 10 years which allowed her to maximise her relief claim.

    One of the years she wishes to claim for is 2016. Denise is single. In 2016 she was 30 and contributed €20,000 to a RAC.

    Denise’s taxable income for 2016
      Amount
    Swimming earnings €70,000
    Swimming expenses (€5,000)
    Personal appearance income €30,000
    RAC contribution (€20,000)
    Taxable income €75,000
    Income Tax  
    €33,800 @ 20% €6,760
    €41,200 @ 40% €16,480
    Income Tax for 2016  
    (before credits and other reliefs) €23,240

    After claiming Sportsperson's Relief for 2016, her taxable income has changed.

    Denise’s taxable income for 2016, after Sportsperson's Relief
      Amount
    Swimming earnings €70,000
    Swimming expenses (€5,000)
    Sportspersons Relief (€70,000 x 40%) (€28,000)
    Personal appearance income €30,000
    RAC contribution (€20,000)
    Taxable income €47,000
    Income Tax  
    €33,800 @ 20% €6,760
    €13,200 @ 40% €5,280
    Income Tax for 2016  
    (before credits and other reliefs) €12,040

    Denise will receive a deduction of €28,000 for 2016. This deduction will not affect the calculation of her net relevant earnings for the purposes of tax relief on her RAC contributions. Denise will carry out a similar review for the other nine years she selects to calculate her total relief. The relief will be given by way of repayment.

  • Example 2

    Michael is a cyclist who retired from cycling in 2023. He wishes to claim Sportsperson's Relief. To do so, he reviewed his income from cycling for the 15 years prior to retiring (including 2023). He selected the 10 years which allowed him to maximise his relief claim.

    One of the years he wishes to claim for is 2017. Michael is single. In 2017 he was 42 and contributed €34,000 to a PRSA.

    Michael’s taxable income for 2017
      Amount
    Cycling earnings €200,000
    Cycling expenses (€15,000)
    Sponsorship income €60,000
    PRSA contribution (€34,000)
    Taxable income €211,000
    Income Tax  
    €33,800 @ 20% €6,760
    €177,200 @ 40% €70,880
    Income Tax for 2017  
    (before credits and other reliefs) €77,640

    After claiming Sportsperson's Relief for 2017, his taxable income has changed.

    Michael’s taxable income for 2017, after Sportsperson's Relief
      Amount
    Cycling earnings €200,000
    Cycling expenses (€15,000)
    Sportsperson's Relief (€200,000 x 40%) (€80,000)
    Sponsorship income €60,000
    PRSA contribution (€34,000)
    Taxable income €131,000
    Income Tax  
    €33,800 @ 20%  €6,760
    €97,200 @ 40% €38,880
    Income Tax for 2017  
    (before credits and other reliefs) €45,640

    Michael will receive a deduction of €80,000 for 2017. This deduction will not affect the calculation of his net relevant earnings for the purposes of tax relief on his PRSA contributions. Michael will carry out a similar review for the other nine years he selects to calculate his total relief. The relief will be given by way of repayment.

Next: How to claim the relief

Published: 01 January 2023 Print this page

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