Pension tax relief?

Hmmmm.... can someone explain this calculation???

If you go to this link and enter 1000 in savings and 42% - I would have thought the top up was 420 if you are taxed at 42% - what am I missing here?? Where does the 724 come from??

http://www.pensionsboard.ie/ssia_calculator.asp


Thanks

coppeen

Your monthly saving of €1000 could receive a monthly tax-relief top-up of €724.14.

Click to expand...

The 1000 is after tax saving.
before tax 1724
Tax 724
Net 1000

Not sure how to calculate before "gross" tax situation from 1000 to 1724 in above situation

I also tought that if you put in 1000 you got a refund of 420 by way of a cheque reading the above could be wrong

This is the way for people who get pension conts deducted from salary roll.

To calculate the "gross" amount saved for high rate taxpayer take the amount of salary saved (i.e. €1,000) and divide by 58% (i.e. 0.58) to get the gross amount saved (i.e 1,000/0.58 = 1,724) then deduct the amount of salary conceded (1,000) to get the relief (= 1,724 - 1,000).