Net Relevant Earnings & Car Allowance

[Mez!]

Had a look through the Revenue guides and I can’t find much detail about what can, and cannot be counted as Net Relevant Earnings when it comes to calculating pension tax relief.

Hoping someone here can enlighten me if an individual can include a car allowance, when calculating net relevant earnings?

 

[Conan]

If it's taxable as income then it's potentially "pensionable. Any BIK is treated as income and thus pensionable.

 

[Paul O Mahoney]

Most companies do not include car Allowance in pension calculations.

 

[RedOnion]

Most companies do not include car Allowance in pension calculations.

Correct, but it's still allowed from a tax perspective. It's part of relevant earnings.

 

[Paul O Mahoney]

Correct, but it's still allowed from a tax perspective. It's part of relevant earnings.

Really can you explain that please, I was an accountant but not a tax type. I'd appreciate any information as the tax bill is 6 figures now

 

[RedOnion]

the tax bill is 6 figures now

If your tax bill is 6 figures, it's unlikely that pension contribution on a car allowance will make much difference, since relevant earnings is capped at 115k.

You need to work out your relevant earnings. Bonus, commission, overtime, car allowance for example are all excluded from a company 'pensionable salary' but are all relevant earnings from which you can pay AVCs.

 

[Paul O Mahoney]

If your tax bill is 6 figures, it's unlikely that pension contribution on a car allowance will make much difference, since relevant earnings is capped at 115k.

You need to work out your relevant earnings. Bonus, commission, overtime, car allowance for example are all excluded from a company 'pensionable salary' but are all relevant earnings from which you can pay AVCs.

Thanks appreciate the response, actually you have reminded me of something that I need to change in an analysis I just did, totally forgot about the upper limit .