Tax Refund on Pension Contributions

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Tax Refund on Pension Contributions

Pension Contributions make for good tax savings!

We all know how underfunded pensions are across the board. For all the woman reading this, they are significantly underfunded but that is for another day!

Today, we are focusing on the here and now, because you have only a few days left to avail of making a pension contribution which can be claimed against your 2015 income tax. If you are SELF-EMPLOYED or an EMPLOYEE – this applies to you.

How can this be a saving?


Take MR A, He is 31 years old and earns €50,000. He pays PAYE of approx €10,140. He has fallen into the higher tax bracket and so is paying tax at the 40% rate.

He is allowed a 20% pension contribution which is €10,000. He decides to make a pension contribution of €5,000.

If he pays this by the 10th of November he can use this against 2015 income tax paid.

Giving him a tax refund of €2,000. So at a net cost of €3,000, he has a pension fund put away of €5,000.

Makes sense ?

So if you have extra funds and you want to secure your future, what better way than by putting them into a pension.

Our team here at PSC are more than happy to assist you with just that. Please contact Eoin or Bairbre at 066 7126333 or / or visit

Extra details below:

Company Pension Schemes (Employees and Directors)


Annual contributions paid by an employee to a Revenue approved company pension scheme are tax-deductible.  The relevant contribution must be made from the employee’s total remuneration for the year from the employment.  The relief available is calculated based on a cap of €115,000.  It should be noted that this cap does not apply to employer contributions to an Occupational Pension Scheme (“OPS”).


The relief available is limited to the individual’s marginal rate of income tax (max 40%).

Tax relief on pension contributions can be claimed by the self-employed and by members of OPS.  For self-employed individuals, the limit applies to Net Relevant Earnings (“NRE”); for employees/members of OPS, the limit applies to earnings.  In a single tax year, relief can be claimed on the following basis: 

Age                                                     Limit                           Actual Contribution Limit

Less than 30 years                               15%                                         €17,250

Between 30 and 39                             20%                                         €23,000

Between 40 and 49                             25%                                         €28,750

Between 50 and 54                             30%                                         €34,500

Between 55 and 59                             35%                                         €40,250

Over 60                                               40%                                         €46,000