As we approach the end of the Tax year, now is the time to review pension contributions for both employers and employees. Acting before 31 December can help maximise tax relief and ensure compliance.
Employee Pension Contributions
Maximise Tax Relief
Employees can contribute up to their age-related limit on earnings capped at €115,000 to receive tax relief:
- Under 30: 15%
- 30–39: 20%
- 40–49: 25%
- 50–54: 30%
- 55–59: 35%
- 60+: 40%
Additional Voluntary Contributions (AVCs
AVCs allow employees to top up their pension and claim tax relief at their marginal rate (20% or 40%).
- Contributions made through payroll before the December cut-off receive immediate relief.
- Post-year-end AVCs can still qualify for relief via the personal tax return.
Employer Pension Contributions
Tax-Deductible Contributions
Employer contributions are deductible for corporation tax and exempt from PRSI and USC, provided they meet Revenue rules.
PRSA Contribution Limits
From 1 January 2025, employer contributions to PRSAs cannot exceed 100% of an employee’s salary. Any excess will be treated as a Benefit-in-Kind (BIK) and taxed in the final payroll run.