How do pension contributions work for tax relief in Ireland — what are the age-based limits?

Pension contributions in Ireland qualify for income tax relief at your marginal rate — either 20% or 40%. This means higher-rate taxpayers receive the most benefit. PRSI and USC are not relieved on pension contributions.

The maximum relief is expressed as a percentage of net relevant earnings (broadly, your employment or self-employment income), with the percentage depending on your age: 15% under age 30; 20% for ages 30 to 39; 25% for ages 40 to 49; 30% for ages 50 to 54; 35% for ages 55 to 59; and 40% for age 60 and over. These percentages apply to a maximum earnings cap of €115,000 per year.

Contributions are made to approved pension schemes including occupational pension schemes (employer-provided), Personal Retirement Savings Accounts (PRSAs), and Retirement Annuity Contracts (RACs). Employer contributions are separate from the individual's limit.

At retirement, you can take 25% of your pension fund as a tax-free lump sum (up to €200,000 tax-free, with the next €300,000 taxed at 20%). The remaining fund is drawn down through an ARF (Approved Retirement Fund) or annuity and is taxed as ordinary income.