AVC contribution higher than tax relief limit

[DonegalTown]

Hello,

My company (a U.S. pharma company) uses Irish Life to manage the pension and AVC contibutions. Everything is dealt through payroll. The 2024 window is now open for the benefits slections so I logged on today to choose the benefits for the year 2025 and just noticed that I made a small mistake last year in November 2023 when choosing the befefits for 2024. I always select the maximum AVC percentage allowed for my age. For my age bracket I contribute 35% of the salary. However in the tool last year I made a mistake instead of writing 35% I wrote 39% and only realized now. I wonder if this is a problem or the 4% difference is automatically taxed at the marginal rate + PRSI etc ? Should I contact revenue or payroll ?

Thanks

 

[ClubMan]

You won't get tax relief at source on the excess but you can carry it forward and claim it in a subequent year.

 

[DonegalTown]

Thanks Clubman

 

[MugsGame]

Remember also that your payroll contribution percentage is probably calculated on base pay only.

But other pay subject to income tax also count as eligible earnings for pension tax relief, e.g. bonus or BIK such as health insurance premium. So you might be able to get full relief in 2024, depending on the figures (assuming your annual base pay is under €115,000).

 

[ClubMan]

Good point @MugsGame.
So @DonegalTown should check their balancing statement on their Revenue myAccount after year end to check if there actually was any pension contribution in excess of the age related relief limit.
Of course, it's always a good idea to do this anyway just to ensure that everything is in order with one's tax affairs.

 

[DonegalTown]

Thanks Mugsgame