by | Apr 28, 2021

Tax Relief on Pension Contributions in Ireland

You may already know, that investing in a pension has many advantages. It allows you to save properly, can protect your funds from inflation, and possibly increase your wealth over time.

Today we are going to talk about tax relief on pension contributions in Ireland that you make every year. 

Use our pension tax relief calculator below to get an idea of what kind of income tax saving you can make on your pension contributions.

Pension Tax Relief Calculator

What do pension contribution limits mean? 

When you use part of your income to contribute to your pension, Revenue doesn’t include that amount of money when they calculate how much you will be taxed.

In other words, the money that you use for your pension contributions limits every month is not included as part of your total income. Therefore, since you earn less, you pay less taxes.

It also means that you pay less taxes than you would’ve if you had not made contributions to a pension tax relief.

How do pension contribution limits work?  

The two main things that influence tax relief on your pension contributions, are your age and how much you get paid. As you get older, the amount of tax back you will get on your pension contributions increases.

The pension contribution limit is the maximum percentage of your salary that you can invest in your pension and still get pension tax relief on.

Age  % Tax Relief
Under 30  15%
30-39  20%
40-49  25%
50-54  30%
55-59  35%
60 +  40%

Pension Calculator

Use our custom pension calculator to check your income in retirement and the amount of tax you can save.

Pension Calculator

Book Meeting

Let’s get on a call to discuss your personal and business finances with our experienced financial planners!

Book Meeting

When Revenue calculates your taxes, the first €40,000 that you earn will be taxed at 20% and everything over that is taxed at 40%, (but there are other tax bands for married people, for example).

You should also know that pension tax relief is subject to a salary threshold, which is €115,000. It means that only contributions deducted from the first €115,000 of your annual income are eligible for pension tax relief.

Example: 45yr olds, Susan & James, who earn €115,000 and €200,000, will both get tax relief of the same amount since €115,000 is the pension contribution limit. 

Tax relief on pension contributions in practice


Pension No Pension
Annual Income €115,000 €115,000
Pension Contributions €28,750 €0
Income before tax €86,250 €115,000
First €35,300 taxed at 20% €8,000 €8,000
Over €35,300 taxed at 40% €18,500 €30,000
Total taxes paid: €26,500 €38,800
Extra tax paid €12,300


How can we help you? 

Our qualified financial advisors will help you find new opportunities and assess your pension situation. Get in touch now.

What we do:

  • Help you with pension contribution limits
  • Help you set up a pension tax relief plan for free
  • Review your old pension and help you change if necessary
  • Check your current pension and see if they are at your best advantage
  • Evaluate if you can invest more money for your retirement
  • Help you turn your pension into income at retirement

Tell us about your situation here

      Income Tax relief is not guaranteed. You can get tax relief if your income is taxed under Schedule E or Schedule D (case I or II).

      • Warning: Past performance is not a reliable guide to future performance.
      • Warning: This product may be affected by changes in currency exchange rates.
      • Warning: The value of your investment may go down as well as up.
      • Warning: If you invest in this product you may lose some or all of the money you invest.
      • Warning: If you invest in this product you will not have access to your money until you retire.
      Debbie Cheevers

      Debbie Cheevers

      Qualified Financial Advisor (QFA) & Technician Member of the Irish Taxation Institute

      Debbie was born in Dublin and graduated from NCAD with a degree in Visual Communication. She brings a strong customer service background to Greenway.

      Debbie qualified as APA in 2017 and a fully qualified financial advisor (QFA) in 2018. She believes that product knowledge is key to helping customers make the right choices.

      In 2022 Debbie gained a tax qualification as a Technician Member of the Irish Taxation Institute.

      Greenway Financial Advisors Limited is regulated by the Central Bank of Ireland. Registered No. C168372