Tax Relief

What  Tax  Relief Is  Available ?

You are entitled, subject to certain limits, to have the amount that you contribute to a pension deducted from your gross income before that income becomes liable to tax. In effect, tax relief is given at your marginal rate of tax.

In addition, relief in respect of PRSI and levies may also be available. If you are an employee with an occupational pension scheme, your pension contributions will normally be made and relief given through the payroll system. Similar relief can be claimed through your tax office for contributions to other pension arrangements (e.g. AVC, PRSA, ARF, AMRF, etc.).

The maximum pension contributions, in any one year, for which you are entitled to tax relief –

is related to your age and is expressed as a percentage of your gross income. The maximum gross income figure for relief purposes is €275,239 in 2008, €150,000 in 2009 and 2010 and €115,000 from 1st January 2011.

The percentage relief limits are outlined below:

Age % of Net Relevant Earnings
Under 30 years 15%
30 – 39 years 20%
40 – 49 years 25%
50 – 54 years 30%
55 – 59 years 35%
60 years and over 40%

 

Taxation of Lump Sum

Since 1st January 2011 there is a limit of €2000,000 on the amount of the Tax Free Retirement Lump Sum.

Further information may be found at www.revenue.ie

 

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