Revenue Note for Guidance
This section provides for tax relief for employees’ contributions to a retirement benefits scheme established under a public statute. Ordinary annual contributions are to be allowed as a deduction under Schedule E for the year in which they are paid. An employee’s contributions which are not ordinary, annual contributions and which are –
may be taken into account and allowed for the year in which they are paid or apportioned over such period of years as the Revenue Commissioners may consider proper.
In addition, contributions, which are not ordinary annual contributions, and which are paid or borne in the period 1 July 2008 to 31 December 2018 (the ‘qualifying period’) by an individual who was employed by the National University of Ireland, Galway (NUIG) under a contract governed by the Protection of Employees (Fixed-Term Work) Act 2003 at any time during the period beginning on 14 July 2003 and ending on 30 June 2008 (the ‘relevant period’) in respect of a tax year (or part of a tax year) falling within that period, other than contributions which are treated as ordinary annual contributions–
are, to the extent that they have not otherwise been relieved from tax for any year, treated as having been paid in the year, or years, in respect of which they are paid.
Any excess tax paid as a consequence of spreading contributions over past years may be repaid by the Revenue Commissioners notwithstanding the general time limit for making a claim for a repayment set out in section 865, where the employee makes a claim for the relief within 4 years from the end of the year of assessment in which the contribution is paid or, in the case of certain contributions made by NUIG fixed-term employees referred to above, treated as having been paid, and such a claim is a valid claim within the meaning of section 865(1)(b). (The meaning of a valid claim is dealt with in section 865).
Other contributions by an employee which are not ordinary annual contributions and which are paid after the end of a tax year but on or before the return filing date for the tax year may be set against the remuneration for that tax year. Employee contributions that cannot be allowed either in the preceding year or in the year of payment may be carried forward to following years and allowed, subject to age based limits, for those years.
For the year of assessment 2010, the earnings limit is, by virtue of section 790A(5), deemed to be €115,000 for the purpose of determining the extent to which contributions paid by an individual in the year of assessment 2011, are to be treated as paid in the year of assessment 2010.
The aggregate amount of contributions allowable in any one year – whether actual ordinary annual contributions or contributions treated as such – shall not exceed an age-related percentage of the employee’s remuneration in respect of the office or employment for the year in which the contributions are paid. The age-related limits are as follows:
Age |
Limits |
Under 30 years old |
15% of remuneration |
Up to and including 39 years |
20% of remuneration |
Up to and including 49 years |
25% of remuneration |
Up to and including 54 years |
30% of remuneration |
Up to and including 59 years |
35% of remuneration |
60 years or older |
40% of remuneration |
Under section 790A, an earnings limit of €115,000 applies to the total of an individual’s contribution to all pension products.
Relevant Date: Finance Act 2019