Tax on Annual Bonus - pension??

[dmos87]

Hi folks,

Hubby is receiving a 5K bonus. Fantastic yes, however the tax on it will be €2,850.

He does not currently have a pension (employers do not have a company scheme, nagging him to set up his own has not worked). I'm wondering if we can hold off the bonus payment for a week or so to get a private pension set up, so the majority of the bonus can be paid into that.

Anyone able to tell me how beneficial it will be to do so, or any other alternatives to reduce the tax bill while benefiting us?

Thank you!

 

[Protocol]

Money is fungible.

If you set up a personal pension, it doesn't have to be that exact slice of income that is deposited into the pension.

So no need to hold off on bonus.

Simply set up a pension, and put into pension whatever suits your financial situation.

 

[fidelcastro]

He can save 40% Tax on the 5k is the simple answer.

 

[deadlyduck]

Also, he might be able to ask for tax free vouchers instead of a cash bonus- up to €500 is receivable without any tax consequences. See here:

[broken link removed]