The remaining relievable headroom and its net cost.
Extra relievable contribution
—
Tax relief on it
—
Net cost
—
The age bands that set your limit
Irish pension tax relief is not a flat allowance. Revenue lets you claim income tax relief on contributions up to a percentage of your earnings that rises as you get older, on the logic that people closer to retirement need to save harder. The bands run from 15 percent of earnings if you are under 30, to 20 percent in your thirties, 25 percent in your forties, 30 percent from 50 to 54, 35 percent from 55 to 59, and 40 percent once you reach 60. Earnings counted for this purpose are capped at €115,000, so contributions above that ceiling get no relief.
This tool takes your age, your salary, and whatever you already pay into a main occupational scheme, then solves for the headroom that remains. That headroom is the extra you can still put into a Personal Retirement Savings Account or an Additional Voluntary Contribution and have it qualify for relief. It then shows the relief at your marginal rate and the true net cost of topping up.
Counting what your main scheme already uses
The age-related percentage is a single ceiling that covers all your pension contributions together, not a fresh allowance for each pot. So if your employer’s scheme already takes 5 percent of salary from you, that 5 percent eats into the limit before the AVC or PRSA gets a look in. The headroom is the age-band maximum less what you already contribute. Miss this and people wildly overestimate what they can still add, then find part of it gets no relief at all.
A 45 year old on €80,000 tops up
Take someone aged 45 on a €80,000 salary, already paying 5 percent into the company scheme, and taxed at the higher 40 percent rate. At 45 the age band is 25 percent of earnings. Earnings of €80,000 are under the €115,000 cap, so the maximum relievable contribution is €20,000. The existing 5 percent is €4,000, which leaves headroom of €16,000. Relief at 40 percent on that €16,000 is €6,400, so the net cost of the full top-up is €9,600.
| Step | Amount |
|---|---|
| Age band at 45 | 25% of earnings |
| Maximum relievable (25% of €80,000) | €20,000 |
| Already paid (5% of salary) | €4,000 |
| Extra relievable headroom | €16,000 |
| Relief at 40 percent | €6,400 |
| Net cost of topping up | €9,600 |
For a standard-rate taxpayer the relief is 20 percent instead, so the same €16,000 would cost €12,800 net. Either way, note that pension relief reduces income tax only. It does not cut the Universal Social Charge or PRSI, both of which still apply to the gross earnings, so the relief is on the income tax slice alone.
Getting the most from your headroom
Employees in a pension scheme who want to mop up unused relief, and anyone deciding how much to put into a PRSA, will get the most from this. Where it really earns its keep is for higher-rate taxpayers, because every euro contributed costs only 60 cents net, so if you are paying 40 percent tax and have spare cash, filling the headroom is one of the cleanest returns available in Irish personal finance. One timing trick worth using: AVCs can usually be backdated against the prior tax year if paid before the October return deadline, which is a handy way to claim relief you would otherwise lose.
Does the €115,000 cap mean a high earner gets less relief?
In proportion, yes. The percentage is applied to earnings only up to €115,000. Someone earning €150,000 at age 45 still has their 25 percent calculated on €115,000, giving a maximum of €28,750 rather than €37,500. Income above the cap simply does not generate further relievable room.
Can I carry unused allowance forward to next year?
Not as a rolling allowance. The age-related limit applies to each tax year on its own, so room you do not use this year is generally lost. The one timing flexibility is that contributions paid early in the following year can be backdated and claimed against the previous year, provided you do so by the relevant return deadline.