AVC limits query - two employments

[poorrelative]

If a 55 year old public servant is on 50k and has an AVC associated with this employment then the max they can add to their AVC at 40% tax relief is 8k (42k cut off). However, if they also have another private sector employment of 25k, can they top up the AVC to the max for their age (35%) which would be 26.25k, or are the AVC contributions limited to the public sector salary only?

 

[Gordon Gekko]

If a 55 year old public servant is on 50k and has an AVC associated with this employment then the max they can add to their AVC at 40% tax relief is 8k (42k cut off). However, if they also have another private sector employment of 25k, can they top up the AVC to the max for their age (35%) which would be 26.25k, or are the AVC contributions limited to the public sector salary only?

No, it’s the total income.

 

[S class]

This person has total earned income of 75k
They have marginal earnings of 33k taxed at 40%.

If they want to maximise their AVCs from both employments they need to do the following...

Make AVCs of 35% (minus their employee contributions) of their USCable public sector earnings to their public sector AVC policy.

Set up a separate PRSA (or an AVC PRSA if the private earnings are pensioable).
Contribute 35% of their private sector earnings to this new PRSA policy.

They will get tax relief at 40% on all contributions to both policies.

They would need to either redistribute their 20% tax bands to get the full amount of 40% tax relief directly from their wages, or submit a statement of liabilities at the start of the next tax year to receive a tax refund.