Have you maximised tax relief from pension contributions?

---

A pension is basically a long-term savings plan with tax relief. The benefits of maximising your pension are huge. Firstly, you are providing for adequate retirement income and secondly you are minimising your tax bills.

Income Tax relief is available against earnings from your employment for your pension contributions. Did you know that if you make a pension contribution before 31st October 2022 you claim the tax relief for 2021 thereby maximising tax relief? 

Income tax relief is available for pension contributions to any of the following pension plans:

• Occupational pension schemes
• Personal retirement saving accounts
• Retirement annuity contracts
• Qualifying overseas plans

Tax relief on contributions to personal pension schemes is available at your marginal (highest) rate of tax subject to an income cap of €115,000 and contribution rates ranging from 15% to 40% of earnings depending on age:

Table:

Age                             % Net Relevant earnings*

<30                             15%

30-39                          20%

40-49                          25%

50-54                          30%

55-59                          35%

60+                             40%

* Subject to earnings cap of €115,000

If you are coming or returning to Ireland, you can get tax relief for pension contributions made to pre-existing plans with a pension provider in another EU Member State.

Subject to the maximum limits, you may make a pension contribution before the personal tax return filing date for 2021 (i.e. 31st October 2022) and carry the contribution back for inclusion on your 2021 tax return and thereby claim tax relief for 2021. 

Please contact OSK Tax for further details on maximising your pension contribution or in relation to our tax and accounting services.

Share this Post