what's the optimum amount to pay for my salary

Z

z104

Guest
Hi,
I'm 31. Started a pension last year. My employer and i have 6000 paid in between us.

I earn per year . Between my yearly contribution of 6000 euro and my company's yearly contibution of 2000 ,the total is 8000 per year. The 2000 company contribution is on top of my salary.

it works out at 154 per week /8000 per year.

Am I paying too much or too little to get the maximum tax benefit.

Is their a point where you are paying too much for your salary level and not being tax efficient? It kills me to think I'm paying the government more tax than I need to.
 
The maximum tax/PRSI relief in your case is on 20% of your gross. 20% is the age related tax/PRSI relief limit for pension contributions in your situation. If you did not use up your tax/PRSI relief for last year then you can still use it up by making contributions before October 31st and setting them against 2006 income:

October 31 - what does it mean for PAYE worker?
 
You don't say whether your pension arrangement is an Occupational Pension Scheme or a PRSA. If the former, your employer's contribution is not included in the 20% limit Clubman mentions above. If the latter, the 20% limit applies to the combined total, i.e. yours and your employer's contributions.
 
Then you can pay 20% of salary in addition to your employer's contribution.

As you started your pension last year, you may not have paid 20% of salary by the end of the year. If not, you can do a top-up AVC before the end of October 2007 to bring your 2006 contribution up to 20% of your 2006 income.

All of the above assumes that you have the cash available and the desire to do so!
 
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