BrightPay Blog


Oct 2013

31

October tax tip - Investing in a pension

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.

Posted byAudrey MooneyinPayroll Software