Just started pension - how much should I paying

[OnLooker]

Hi, I just started a PRSA pension scheme and am putting in €200 a month.

How much should this cost me?? I was told €106 by the broker.

My net wages are down €211 as a result. This can't be right.

Do revenue need to increase my tax credits??

 

[asdfg]

The broker assumed you are paying tax at the higher rate. This along with PRSI brings the total to €106 as stated by him. If you are paying at the lower rate then the cost will be higher.

I think revenue have to increase your tax credits and your SRCOP by the amount you are contributing. Revenue may need proof of this. Contact revenue.

Is 200pm egough, you should be looking at contributing the max allowed by revenue for you age group.

Remember though, you can't get your hands on the pension until you retire.

 

[aidan119]

Its not done through revenue or tax credits.

The pension paid should be deducted from taxable gross pay in your employers payroll software and then this amount is excluded when calculating the tax.

It may be that they may have deducted the pension contribution as a net deduction off the bottom net pay. If so I would really worry about the payroll dept in your company.

 

[asdfg]

from revenue.ieTax relief on contributions Tax relief is given at the customers highest rate of tax. If they are an employee relief is also given from PRSI and Health Levy.
Where qualifying PRSA contributions are deducted by an employer, the net pay arrangement will apply. This means that PAYE, PRSI and Health Levy deductions will be calculated on wages or salary net of PRSA contributions.

Where the PRSA contributions are not deducted by an employer relief can be claimed directly from the tax office. Relief will be allowed through the PAYE system, as an additional tax credit.

Aparently it can be done either way depending on the way you set it up.
Not sure what info your employer needs to implement this. I'm sure they need some type of proof. The broker may be able to help.

If your payroll section has done as Aidan119 suggested get them to contact revenue as to how they deduct pension contributions. Fairly basic stuff here. There is also a saving to the employer so it is in their interests to sort it out.