AVC tax relief

[bonzos]

Hi folks, PAYE worker currently paying into a company pension scheme via Irish Life. I earn €100 per week at the higher rate of tax, if I make an AVC of €5200 (52*€100) before the end of this year can I get a refund at 40% from revenue when I make my 2020 tax return in 2021?

 

[josh8267]

Google Tax calculator Ireland pop your wages into it you will see how much 5200 AVC will reduce your overall tax by,

 

[bonzos]

Thanks Josh, I'm not looking to make a weekly contribution I just wondering if I make a payment to my pension this year at the exact amount I paid 40% tax at can I get a refund for 40% of that amount when I make my 2020 return next year

 

[RedOnion]

You can make a contribution before October this year, backdated to last year and get a refund on it. Similar for next year, i.e. you'll have to pay before Oct 2021 and claim a refund based on 2020 tax.

Does that make sense?

 

[Conan]

Your gross income is reduced by the amount of any pension contributions you make. Then you tax liability is calculated (less your tax credits).
if you do pay weekly by Deduction from salary, then you get tax relief immediately. If however you pay by means of a lump sum towards the year end, then you will only see the tax relief when you submit a tax return at the start of the following year ( by means of a tax refund).

 

[bonzos]

Thanks..Makes more sense. I currently get a refund most years for medical expenses...etc. So in theory for every €1k AVC i make i will get a fund of €400 up to the amount I had paid at 40%