pension employer contribution

I am in receipt of 5% contribution from my employer for me to put into a personal pension

Up to recently this was given tax free and I had to provide evidence that it was being put into a Revenue approved pension

I was claiming my contribution as a tax credit, should I have been doing this?

thanks

I think this should be tax neutral, as in, it is a Benefit in Kind, so should be added to your income, but if allowable as a pension contribution ( limits not exceeded) should be allowed as a tax credit.

If I'm interpreting consol's post correctly, either s/he or the employer should have been declaring the employer contribution as a BIK and it should have been taxed accordingly, if s/he was receiving tax relief on it.

Liam D. Ferguson

LDFerguson said:

If I'm interpreting consol's post correctly, either s/he or the employer should have been declaring the employer contribution as a BIK and it should have been taxed accordingly, if s/he was receiving tax relief on it.

Liam D. Ferguson

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I believe it should also subject to the Income Levy too??

boaber said:

I believe it should also subject to the Income Levy too??

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Only if it is a PRSA.

Even if the contribution is being classed as a BIK?

For sure on occupational pension schemes the employer contribution isn't a BIK so not subject to the levy, but the OP said it was a personal pension [did they mean PRSA?]

If the money is being paid to you it is part of salary (not BIK) and should be taxed as so. You then claim tax relief on it yourself when you pay into your pension and will receive this relief via tax credits. You need to reclaim the PRSI relief manually using form CGPRSI1. Net result was the same before the income levy was introduced but should still be recorded properly.

After the income levy was introduced, the net result is not the same as pension contributions do not get relief from the income levy. Therefore you are underpaying tax by this method.