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PRSA Question

  • 20-03-2019 10:28am
    #1
    PHG
    Registered Users Posts: 475 ✭✭


    Hi,

    In my early 30's and doing a PRSA. I get tax relief of up to 20% of my income from my understanding. I put in 12% of my gross income per year.

    However, I will be getting a bonus each year. Does that mean I can add that to the total amount of tax relief?

    For example, lets say my income was 50,000. My tax relief percentage limit is 50,000*.2 = 10,000

    Lets say I then receive a bonus of 5,000. Is my tax relief percentage limit now 55,000*.2 = 11,000 or is it still 10,000?

    Thanks,

    PHG


Comments

  • #2
    retalivity
    Registered Users, Registered Users 2 Posts: 14,438 ✭✭✭✭retalivity


    Pretty sure its the second option - the 20% is on taxable earnings, which woul include the bonus


  • #3
    colm_c
    Registered Users, Registered Users 2 Posts: 2,032 ✭✭✭colm_c


    You get tax relief at the appropriate rate, not limited to 20%.

    i.e. 20% on the first 35,300 of your income and 40% above that.

    Pension contributions (up to the limit for your age) are tax free, i.e. they cost you the gross amount instead of the net amount.

    In the 50k example, if you contribute 6k per year (12%) it costs you 3,600 rather than 6k.

    So any more you add will be at the same rate.

    You can of course add your entire bonus or none of it.


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