The Irish Government provides generous tax relief on pension contributions to encourage people to save for retirement. Understanding how this relief works can help you maximise your pension savings and reduce the actual cost of contributing.
At Fortis Financial, we guide clients through the rules, limits and opportunities so they can make the most of every euro they invest.
How Pension Tax Relief Works
When you contribute to a pension, you can claim income tax relief at your marginal tax rate:
- 20% rate taxpayers receive 20% tax relief
- 40% rate taxpayers receive 40% tax relief
Example:
- If you contribute €100 and pay tax at 40%, the net cost to you is €60.
- If you contribute €100 and pay tax at 20%, the net cost is €80.
This applies to approved pension structures such as:
- Occupational pension schemes
- PRSAs
- Retirement Annuity Contracts (RACs)
Reference:
Revenue – Pension Contribution Relief – https://www.revenue.ie/en/jobs-and-pensions/pensions/index.aspx
Age-Related Relief Limits
Revenue limits the percentage of your income that qualifies for tax relief, depending on your age:
- Up to age 29 → 15%
- 30–39 → 20%
- 40–49 → 25%
- 50–54 → 30%
- 55–59 → 35%
- 60+ → 40%
Relief also applies only to earnings up to an annual cap of €115,000.
Reference:
Revenue – Tax Relief Limits – https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-limits.aspx
Maximising the Benefit
- Contribute up to your allowed age-related limit to maximise relief
- Make additional voluntary contributions (AVCs) if appropriate
- Ensure that employer contributions, employee contributions and Revenue rules work together efficiently
- Higher earners (40% tax rate) receive particularly strong benefits from maximising relief
If your employer matches contributions, combining your contribution + employer funding + government tax reliefcreates a powerful retirement-saving advantage.
How to Claim Relief
If paying through payroll: Relief is usually granted automatically — your employer deducts pension contributions before income tax is applied.
If self-employed or contributing personally to a PRSA:
You must claim relief in your tax return:
- Using Revenue Online Service (ROS) or MyAccount
- Including pension contributions in your tax return for the relevant year
Reference: Revenue – How to Claim Pension Relief – https://www.revenue.ie/en/jobs-and-pensions/pensions/how-to-claim-tax-relief.aspx
Why Tax Relief Makes Pensions So Effective
Pension saving gives you:
- Your own contributions
- Government tax relief
- Employer contributions (if applicable)
- Compound investment growth over many years
Combined, this significantly boosts the long-term value of your pension compared with saving in a standard deposit account.
“Pension tax relief is one of the most generous supports available from the Irish Government — using it wisely can significantly boost your long-term retirement wealth.”
- The value of pension investments may fall as well as rise.
- You may get back less than you invest.
- Pension benefits usually cannot be accessed until retirement age.
- Tax laws and reliefs may change in the future.
- For the latest rules, always refer to www.revenue.ie.
This information is for general guidance only and does not constitute financial advice. For personalised recommendations, please speak with a qualified adviser at Fortis Financial, regulated brokers in Ireland.
