Sign-on bonus paid into pension?

N

nest egg

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I've started a new position, and as part of the deal, negotiated a sign-on bonus. I would like that paid directly into my pension, rather than suffer tax at 52% on it.

I'm aware about salary sacrifice requirements from a Revenue standpoint, but given this is a sign-on bonus, and isn't related to my normal salary (as stated on my contract), and won't be paid again, I can't see why it couldn't be paid into my pension.

Does anyone think I'm off the mark on this?
What's the right 'terminology' to use when contacting HR?

Thanks!
 
If the bonus is counted as a salary top up, and handled by pay roll, I imagine your only method is to max out your AVCs % subject to the 115grand limit.
 
clinteastwood said:
If the bonus is counted as a salary top up, and handled by pay roll, I imagine your only method is to max out your AVCs % subject to the 115grand limit.
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I'm not too familiar with the terminology. Certainly to a layperson like me it isn't a salary payment, it was a one-time incentive to entice me to come and work for the company. I expect it'll be paid via payroll, unless it goes into the pension.
 
If its handled by payroll, and your firm is USMNC, it will be counted as 'earned' income as far as Revenue is concerned. Will you exceed the 115k AVC earned income limit this year ?
 
Lots of US MNC schemes e.g. share RSUs . profit bonus, shares, ESPP, sign on bonus are taxed via payroll to ensure you & the firm are squeeky clean compliant. If you are a small cog in a vast corp wheel, I wouldnt push it.
 
You want to do a “one off AVC” via Payroll, eg the whole bonus is processed as an AVC in the payroll month where the bonus is paid, but it is still subject to PRSI & USC,so you will be down on your normal nett pay if you AVC the total of the bonus, and you need to consider your annual age related limit also.
 
When did you start, 2024 or 2025 ? Has it been paid ? It's likely to have a caveat which states that you get it after been in the company for 6 months and then paid by payroll. As mentioned above, I believe it will form part of your annual limits.
 
elcato said:
When did you start, 2024 or 2025 ? Has it been paid ? It's likely to have a caveat which states that you get it after been in the company for 6 months and then paid by payroll. As mentioned above, I believe it will form part of your annual limits.
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It's paid within 60 days (in writing), it hasn't been paid yet, which is why I'm trying to preempt.
 
clinteastwood said:
If its handled by payroll, and your firm is USMNC, it will be counted as 'earned' income as far as Revenue is concerned. Will you exceed the 115k AVC earned income limit this year ?
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Yeah I will exceed it without the sign on. I appreciate the odds are stacked against me but I don't see an issue with making a polite request. I do think there are grounds to treat it differently, given the nature of the payment. I want to maximise my chances by using the right terminology when I contact HR. If anyone has any suggestions, I'm all ears!
 
I think it’s difficult for this not to fall foul of the salary sacrifice rules.

As a rule of thumb, unless the employer unilaterally initiates something, it’s salary sacrifice.
 
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