employer vs employee PRSA contribution differences

[jakfrost]

I'm trying to get my head around the differences between employer and employee PRSA contributions. I understand that if an employer can claw back their contribution in certain scenarios, and that employer contributions don't count towards age related contribution limits. However, I'm unsure if there's a difference in how they're treated regarding income tax, PRSI or USC?

For example, if an employee had the option of either A) an annual salary of €100,000 plus a €20,000 employer contribution to a PRSA, or B) a salary of €120000 from which they made a €20,000 employee contribution, which option should the employee choose? Additionally, is either option more beneficial for the employer?

Many thanks.

 

[GSheehy]

I understand that if an employer can claw back their contribution in certain scenarios,

Not on a PRSA.

For example, if an employee had the option of either A) an annual salary of €100,000 plus a €20,000 employer contribution to a PRSA, or B) a salary of €120000 from which they made a €20,000 employee contribution, which option should the employee choose? Additionally, is either option more beneficial for the employer?

Maybe I'm misreading it but in both of these scenarios the employer is paying €20,000 into your pension. Or, are you saying that they pay you €120,000 and that you make your own employee €20,000 contribution to the PRSA ie. there's no employer contribution at all?


Gerard

www.execution-only.ie

 

[Steven Barrett]

You can't claim relief against PRSI and USC from personal contributions, so it is more efficient if the employer makes the contribution.

Ger is correct on there not being a vesting period under PRSAs. That applies to occupational pension schemes. With a PRSA, it is yours from day 1.