Max Pension Contribution

F

fin99

Guest
Hi,

I made a one off pension contribution at end of Oct 2004 to use tax relief for 2003. Salary of 80k. Turned 40 in August 2003. Paid 25% of salary, 20K, into pension fund. Can someone tell me whether that was a correct amount or should I have worked a figure out pro-rata. I.e. 20% up to Aug and 25% after.

Thanks
 
Interesting question - I'm not sure if only the under 40 or the 40+ rate applies in this case or if the amount is calculated on a pro-rata basis. However even if you have contributed too much the worst that can happen is that you simply don't get tax and PRSI relief on some of it. Have you queried this with Revenue directly yet?
 
No, I haven't yet.

I've looked at various websites but it is hard to tell.
 
MAx Contribution query

Hi,

How does revenue enforce this max contribution limit?

I started a PRSA this year. While I was setting up this pension my employer held onto income from last year and lodged it into the pension when I set up the PRSA this year.
So far this year I've made nearly the max contributions to his pension ie 20% of gross income for 30 -40 yr old.

When I get the pension statement at end of year I reckon the total amount put in will exceed the 20% contribution as last yrs income was included.

Is the employer supposed to check that I don't exceed the max contribution when he is making deductions from my gross salary?
 
Re: MAx Contribution query

Is the employer supposed to check that I don't exceed the max contribution when he is making deductions from my gross salary?

Ultimately it's the employee's responsibility to ensure that their tax affairs are kept up to date. Claiming more tax relief that you are entitled to will presumably be spotted by Revenue sooner or later (probably the former). Note that contributions before October 31st of any tax year can be if relevant so it is still possible to legitimately exceed the tax relief limits in any one year. In your case you could legitimately contribute 20% of your 2003 gross before October 31st 2004 as well as 20% of your 2004 gross over the 2004 tax year for example.
 
Re: Max Contribution

Hi,

Found below in .pdf on the revenue.ie website. So I think my payment was correct.

This section sets out the manner in which relief under the Chapter in respect of qualifying premiums is to be given and how the amount of the relief is to be computed. The relief is given as a deduction from or set-off against relevant earnings for the year of assessment for which the premiums are paid. Depending on the age of the individual, relief is allowable up to the following percentages of the individual’s net relevant earnings for that year —
Individual who, at any time during the tax year, is
aged 30 or over and less than 40 then 20%

Individual who, at any time during the tax year, is
aged 40 or over and less than 50 then 25%
 
Re: Max Contribution

The higher limit applies if any time in the tax year in question you attain age 40 ..even if on 31st December.
 
You must log in or register to reply here.
Back
Top