employer vs employee PRSA contribution differences

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.

jakfrost said:

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

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Not on a PRSA.

jakfrost said:

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?

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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

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.