36, single & earn 40k/pa: Whats the most I can pay per month to maximise tax relief?

[shopper]

i am 36, single and earn 40K a year. Never had a pension before. What is the most i can pay in each month to achieve maximum tax relief? My outgoings are low so it could be a sizeable chunk.Please give an example if you could be so kind! Or direct me to website that can do some calculations.

 

[oysterman]

Re: 36, single & earn 40k/pa: Whats the most i can pay per month to maximise tax reli

i am 36, single and earn 40K a year. What is the most i can pay in each month to achieve maximum tax relief?

You could pay in up to €8,000 per annum (20% of gross pay), rising to 25% at age 40, then 30% at 50, 35% at 55 and 40% at 60 (with an earnings cap of €254,000 per annum).

Those are the limits. Whether it would be advisable for you to be making such large contributions is a different matter entirely.

 

[ClubMan]

Don't forget that if you are making pension contributions other than via payroll then you must claim the tax and then the PRSI relief manually yourself. See the key posts.

 

[MMilken]

Does your employer have a pension plan?

You are probably paying marginal tax rate (41%) on about €6K of your income.

So I would say you should not contribute beyond what you are paying marginal tax on...at least for starters.