AVC limit for previous tax year 2023

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alamo123

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Hi,
I used my maximum AVC’s (30%) of my salary last year. If I was to make a lump sum payment to my AVC pension before Oct 31st 2024 would I get any tax relief on this lump sum or have I maximised out my allowance for 2023 ?

Also, I only started my pension last year so very late in life. Is there any way I can back date a lump sum payment into my AVC for maybe previous years where I wasn’t making any payments into a pension ?
 
When you say your limit is 30%, I'm assuming that you were between 50 and 54 years old in 2023.

Aside from your basic salary, had you any additional benefits last year, e.g. non-pensionable bonuses, commission or overtime, Benefits in Kind like company car, company-paid health insurance etc.?
 
Hi LD,
Thanks for response.
Correct, I’m now 53 (52 when I started pension and went heavy on the max 30% of my salary back in January 2023 that I’ve been paying in monthly since Jan 2023) so am very late to the pension party. I’m fortunate however that I have 100,000 in disposable income that I was thinking of adding to the “avc contribution” to utilise tax savings but I’m sure there’s limits for each year.

Benefits wise, the company pay my health insurance but no other benefits to speak of.
 
Hi Alamo

Well done on getting your pension going. It is never too late. Depending on when you want/need to draw down your pension you might have 12 or 13 more years to make contributions.

You could frontload your AVC with the 100k, let it grow and compound and then utilise the tax shelter for it in future years.

The only caveats to that might be
  1. If you were to lose your job (is it a secure industry)
  2. You needed access to that 100k and now you cannot until pension draw down.
 
There are a few simple steps to do that will help you understand what your AVC limit is.

1. Log on the MyAccount on the revenue website
2. Under 'PAYE Services' browse to 'View your Employment Detail Summary (EDS) documents
3. Click on 'View/Create' for 2023
4. Use the 'Gross Pay' figure to calculate your pension contribution limit

The Gross Pay figure in the EDS is inclusive of any taxable renumeration above your base salary so it will include health, BIK, bonus, overtime etc.

You can contribute 30% of this figure up to €115k. If your gross pay exceeds €115k, you can contribute €34.5k and receive tax relief.

alamo123 said:
I’m fortunate however that I have 100,000 in disposable income
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I will assume you mean your base salary is €100k?? If so, your regular contributions for the year have totalled €30k for the year. If your EDS gross pay figure is higher (e.g. €110k), then you can make an AVC for 2023 of 30% of the difference.

This would be €10k x 30% or €3k
 
_OkGo_ said:
There are a few simple steps to do that will help you understand what your AVC limit is.

1. Log on the MyAccount on the revenue website
2. Under 'PAYE Services' browse to 'View your Employment Detail Summary (EDS) documents
3. Click on 'View/Create' for 2023
4. Use the 'Gross Pay' figure to calculate your pension contribution limit

The Gross Pay figure in the EDS is inclusive of any taxable renumeration above your base salary so it will include health, BIK, bonus, overtime etc.

You can contribute 30% of this figure up to €115k. If your gross pay exceeds €115k, you can contribute €34.5k and receive tax relief.


I will assume you mean your base salary is €100k?? If so, your regular contributions for the year have totalled €30k for the year. If your EDS gross pay figure is higher (e.g. €110k), then you can make an AVC for 2023 of 30% of the difference.

This would be €10k x 30% or €3k
Click to expand...
Thank you. Incredibly helpful Information.

Apologies, when I say €100k “disposable income” , I really should’ve said €100k in savings (some of which I’m thinking of putting towards an AVC lump sum IF i have not used my maximum contributions for 2023

My gross pay in 2023 was €53k
Of that just under €16k (30% of gross salary) were AVC contributions. So based on those figures what would be (if any) the max tax efficient lump sum to add to pension and can tax be claimed back if so.
 
You've used your 30% limit for 2023. It's not possible to backdate further than 2023.

Did you work in the UK in the past?
 
alamo123 said:
My gross pay in 2023 was €53k
Of that just under €16k (30% of gross salary) were AVC
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It sounds like you have used up your 30% limit but just to be absolutely sure, you should confirm the following:

1. €53k is your gross pay from the EDS for 2023
2. Check your December 2023 payslip. This will usually have a YTD (year to date) column that will give you the total pension contributions you have made in the year.

€53k x 30% is €15.9k. If you have contributed less than this then you might have scope for another small amount but based on what you have said it will be small.
 
LDFerguson said:
You've used your 30% limit for 2023. It's not possible to backdate further than 2023.

Did you work in the UK in the past?
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Thanks LD for clearing this up. Answers all my questions and confirms what I suspected.

I worked very briefly in the Uk (bar job) for around 6months before coming home (1991 london going into recession and I remember thinking do good times actually exist anywhere ) :)
_OkGo_ said:
It sounds like you have used up your 30% limit but just to be absolutely sure, you should confirm the following:

1. €53k is your gross pay from the EDS for 2023
2. Check your December 2023 payslip. This will usually have a YTD (year to date) column that will give you the total pension contributions you have made in the year.

€53k x 30% is €15.9k. If you have contributed less than this then you might have scope for another small amount but based on what you have said it will be small.
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thx okGo

I can confirm my AVC contributions for 2023 were indeed €15.9k so I’ve definitely maxed them for last year and will be doing same for this year and hopefully next few years in a desperate bid to put some sort of fund together.
 
alamo123 said:
I worked very briefly in the Uk (bar job) for around 6months before coming home (1991 london going into recession and I remember thinking do good times actually exist anywhere ) :)
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Okay - reason I asked is that if you had more than 3 years' National Insurance paid in the UK, you can pay now to buy more to qualify for a larger UK State Pension. But if you were only working there for around 6 months, then I don't think you can.

In 1991 I was working for a firm that is now part of Aviva, earning a modest wage but still at home with my folks and paying modest rent, so I still had money left over each month for pints and vinyl records. A nice time when talk of recession didn't affect me much.
 
Really sorry folks,

I’ve just signed into my pension portal and realised I’ve been paying 25% AVC since January 2023. (No idea how I could get this wrong).

So in 2023 I paid €11.5k in AVC contributions.


My salary is €46k and €53k after bonuses.


I think I might actually be entitled a small tax savings if I was to add a lump sum as I didn’t max out what I could have put into AVC. What would be the way to proceed before Oct 31 which I know is the deadline to do this.
 
Contact the AVC provider company e.g. Zurich, Irish Life etc.
Ask them for details for making electronic payments.
Check your USCable pay.
Your maximum AVCs will be the relevant percentage of this total.

Then send the lump sum by electronic payment to the provider.
Include your policy number in the electronic payment.
 
S class said:
Contact the AVC provider company e.g. Zurich, Irish Life etc.
Ask them for details for making electronic payments.
Check your USCable pay.
Your maximum AVCs will be the relevant percentage of this total.

Then send the lump sum by electronic payment to the provider.
Include your policy number in the electronic payment.
Click to expand...
In my experience these companies don't accept electronic payments for pension contributions.
 
T McGibney said:
In my experience these companies don't accept electronic payments for pension contributions.
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Zurich does. They have offered this service for years.
Any provider still operating an antiquated service could be sent a cheque.
 
S class said:
Zurich does. They have offered this service for years.
Any provider still operating an antiquated service could be sent a cheque.
Click to expand...
Again not in my experience.

They insist on cheques.

It's a real pain near tax deadlines.
 
That's news to me.

I've been annually posting cheques to Zurich for donkey's years now, albeit not for a PRSA nor PRSA AVC topup.
 
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alamo123 said:
Really sorry folks,

I’ve just signed into my pension portal and realised I’ve been paying 25% AVC since January 2023. (No idea how I could get this wrong).

So in 2023 I paid €11.5k in AVC contributions.


My salary is €46k and €53k after bonuses.


I think I might actually be entitled a small tax savings if I was to add a lump sum as I didn’t max out what I could have put into AVC. What would be the way to proceed before Oct 31 which I know is the deadline to do this.
Click to expand...

One thing to check. You say you paid €11,500 in AVC contributions in 2023. How much did you pay in ordinary employee contributions to the pension scheme? The 30% limit is the total of ordinary employee contributions + AVCs.
 
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