Pension contribution limits - two employments

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poorrelative

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I am trying to maximise pension contribute for 2022 before the upcoming October deadline. I have two employments - one with the public sector (80k pa). I have a PRSA AVC associated with this to which I also contribute 6k pa. I am own a small company from which I take a salary of 36k pa and from which I pay 5% of salary into a company PRSA (company also pays 5%). Because of my age I can contribute up to 30% salary to pension.

As far as I understand things I have a limit of 30% of 115k = 34.5k. Since I already contribute 4.4k into my public sector pension, plus 6k AVC associated with this PS employment plus 1.8k (5%) to my company pension (or should it also include the company contribution as well in 2022 - I know its not the case for 2023 now) this adds up 12.2k so I could in theory dump 22.3k into my pensions. But my question is, can I put all 22.3k into the PRSA-AVC associated with my PS employment or must I split this appropriately between both pensions. By appropriately I mean, lets say for the PS pensions I cannot contribute more than 30% of 80K, therefore 24k minus (4.4k + 6k) = 13,6k. So of the 22.3k I could put 13.6k into my PS PRSA-AVC and 8.7k into my company PRSA?
 
You must put them into the relevant pensions. So max out the PS pension and max out the company PRSA.


...but as a company owner with a PRSA, why don't you just reduce your salary and put the money into the PRSA as a company contribution? there are no funding checks for PRSAs and as a company contribution, there is no PRSI or USC paid on the contribution, which you are currently paying on your personal contributions. There is no reason for you to be making personal contributions to the policy of your own company, they should all be company paid. One of the advantages of being a company owner.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Steven Barrett said:
...but as a company owner with a PRSA, why don't you just reduce your salary and put the money into the PRSA as a company contribution? there are no funding checks for PRSAs and as a company contribution, there is no PRSI or USC paid on the contribution, which you are currently paying on your personal contributions. There is no reason for you to be making personal contributions to the policy of your own company, they should all be company paid. One of the advantages of being a company owner.
Click to expand...

Is this allowed - do Salary Sacrifice rules not apply here?
 
Salary sacrifice and the section it is included in "What pay includes" refers to paying employees. He is the owner of the company.
 
So he isn’t an employee?

And if he isn’t an employee how can you fund a pension?
 
Oisin19 said:
So he isn’t an employee?

And if he isn’t an employee how can you fund a pension?
Click to expand...

He's both employer and employee.

Highly unlikely that he'd have a contract of employment with himself or have the need to renegotiate that contract (to change salary), with himself.

Gerard

www.prsa.ie
 
A Yes or No is too broad to post here. It could easily be misinterpreted.

If in doubt, seek professional tax advice to compare any contract of employment and Revenue guidance notes.

Would a company director have a recorded entitlement to a salary in a specifc year, where he's both employer & employee? I'd say No, but I'm not a tax professional. Maybe someone else can clear that up.

The 'ordinary' employee would though, wouldn't they?


Gerard

www.prsa.ie
 
Fair enough - so, in the absence of documentation and the only evidence exists that €36k p.a. has been taken in income, what's suggested by Steven could be in breach?
 
In the context of this post and what the OP has specifically posted, I doubt it.
 
Thanks for all the responses folks - my main query has been answered and I will start the ball rolling with this...damn - just noticed that the PRSA AVC that I set up a couple of years ago for my PS employment is 1% AMC and 99% allocation...should have read this board more before setting it up I guess
 
Steven Barrett said:
You must put them into the relevant pensions. So max out the PS pension and max out the company PRSA.


...but as a company owner with a PRSA, why don't you just reduce your salary and put the money into the PRSA as a company contribution? there are no funding checks for PRSAs and as a company contribution, there is no PRSI or USC paid on the contribution, which you are currently paying on your personal contributions. There is no reason for you to be making personal contributions to the policy of your own company, they should all be company paid. One of the advantages of being a company owner.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
Click to expand...
Thanks Steve actually I didn't know I could do that....presumably this can't now be done retrospectively? Do I need to contribute anything towards my pension from company salary or could I, for example, take 20k as salary and put 15k into pension?
 
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