# Am I getting my tax relief on my AVC's ?



## TwoWheels (24 Jan 2006)

Hi All,
A question I have tried to work out the answer to, but failed.
I am trying to see where I am getting my tax benefit for my AVC's into the company pension.
From what I can see on my payslip, I am paying tax on my full earnings (Less my standard rate cutoff) and then paying my AVC's after tax, I was under the impression that my AVC's should be tax free?

I have pasted some of my payslip below to aid you in your advice (That I will appreciate very much) 
Obviously I have taken out any identifiable details of either myself or my employer.
                                         ERS PRSI THIS PRD       539.63
 PAY DATE            31ST JANUARY 2006   ERS PENS THIS PRD       109.44
 TAX PERIOD          MONTH 01            MTHLY TAX CREDIT        357.17
                                         MTHLY STD RATE CUTOF   2723.09
                                         PRSI CLASS          A1
 HOURLY RATE               0.0000        WK1/MTH1

 PAYMENTS                                DEDUCTIONS
                        UNITS     VALUE                        VALUE     TAX YTD
 SALARY                         2736.08  TAX PAID            1152.06    1152.06
 COMMISSION 1                   2670.27  EES PRSI             279.17     279.17
 Med Ins-Notional                105.92  EES PEN 1            109.44     109.44
                                         AVC                  383.05     383.05
                                         CHARITY                2.54       2.54
                                        AXA INSURANCE         48.00     192.00

                         TOTAL PAYMENTS             TOTAL DEDUCTIONS    NET PAY
                                5406.35                      1974.26    3432.09


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## ClubMan (24 Jan 2006)

Pension contributions within your age related tax relief limit for tax/_PRSI_ relief should be marked on the payslip (often with an asterisk *) as non taxable and should be deducted from gross first and then tax and _PRSI _calculated on the remainder. Maybe you can sanity check the calculations using [broken link removed]? Where pension contributions that qualify for full tax/_PRSI_ relief are made then you can reduce your gross annual income by the annual pension contributions and enter the reduced figure into the calculator.


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## TwoWheels (24 Jan 2006)

From the figures above, it does look like I am paying tax on my contributions I think, Would you agree? (Thanks for your help)

It seems to me that;
My salary is €5406
MTHLY STD RATE CUTOF 2723.09
MTHLY TAX CREDIT 357.17

AVC                  383.05


TAX PAID 1152.06
EES PRSI 279.17


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## ClubMan (24 Jan 2006)

I can't reconcile the figures 100% but it looks in or around correct to me - i.e. you do seem to be getting tax relief on pension/_AVC_ contributions. I haven't done the _PRSI _calculations but here is an outline of my tax calculations:

*Remuneration*
Salary: €2736.08
Commission: €2670.27
Gross: €5406.35

*Pension*
Pension: €109.44
AVC: €383.05
Total pension: €492.49

*Taxable*
Gross: €5406.35
Total pension: €492.49
Taxable: €4913.86

* Tax*
Standard rate: €2723.09 @ 20% = €544.62
High rate: (€4913.86 - €2723.09) = €2188.77 @ 42% = €919.28
Gross tax: €544.62 + €919.28 = €1463.90
Less tax credit: €357.17
Net tax: €1106.73

This €1106.73 figure is not quite the same as the actual tax on your payslip of €1152.06 but maybe the discrepancy can be explained by (a) mistakes in my calculations (!) or (b) your total pension contributions being over your age related tax relief limit and thus not qualifying for relief on the full amount?

Does that make any more sense to you? 

Maybe your employer can explain the calculations/payslip in more detail?


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