The average life expectancy in Ireland is rising; people are living longer so it’s important to plan for your future. If a pension scheme or product is approved by the Revenue Commissioners you will receive Tax Relief on contributions to it. By contributing some of your salary to a Pension Scheme those earnings are not subject to PAYE. Tax Relief is allowed at the marginal rate of tax so if you pay tax at 41% you will get tax relief at 41% i.e. if you pay tax at 41% it will cost you €59 to contribute €100 to your pension.
AVC refers to any Additional Voluntary Contribution made to a Pension Scheme and would be worth considering for any bonus received to save paying 41% tax on it!
Pension contributions are subject to USC & PRSI.
The maximum allowable contributions for tax purposes are as follows:
Age % of Net Relevant Earnings
Under 30 years of age 15%
30-39 years of age 20%
40-49 years of age 25%
50-54 years of age 30%
55-59 years of age 35%
60 years of age & over 40%
It’s never too early to start a pension, think about it today. For help on processing pensions please refer to the online help file for Thesaurus Payroll Manager/BrightPay or telephone the support team who will be happy to assist you.