Lump Sum into Pension - How to

B

bren1916

Registered User
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Hi All,

At age 50 I believe I can contribute up to 30% of my salary into my pension with tax relief. At present I contribute 6% which is matched by my employer but I would like to make a lump sum payment in respect of last year's contribution.

Q:
How much can I invest given my salary is 74K + 10% bonus = 81.4K
How do I go about doing this - is it via revenue.ie or through my employer?

Thanks,

Bren
 
Assuming it's not a PRSA, your employer contribution isn't counted.

You've already paid 6% of your base salary (74k) = 4,440
You can get relief on 30% of total pay (81.4k) = 24,420
So you should be able to contribute up to a further 19,980 for last year and get tax relief on it.

You should have contact details for your pension provider. If not, your HR should be able to help you.

For me, I contact the provider and tell them I want to make a back dated AVC to maximise tax relief. They ask for a copy of my P60 (or whatever it's called now), and they calculate the maximum contribution I can make. They then send me bank account details and a reference number that's unique to me. I transfer the gross amount of money, and they send me a certificate to claim tax.

Then, I log into Revenue, and add the details in my tax details for the previous year. They recalculate a balancing statement, and transfer the tax relief back to me within a few days.

Your HR department should be able to help you with the full process.
 
Also in case yr company doesn't calculate this - (I have an online form I enter my own details into directly) be sure to check your total pay figure first on your p60 (the figure used to calculate the USC).

Chances are you might be able to increase the amount further than base + bonus to include any BIK/allowances such as health care into your ttl income figure (up to total 115k)

50+O
 
Brilliant, thanks so much for your responses it's really helpful. @RedOnion I turned 50 in January this year so assume that brings me back into the 25% bracket for 2020?
 
50andOut said:
Also in case yr company doesn't calculate this - (I have an online form I enter my own details into directly) be sure to check your total pay figure first on your p60 (the figure used to calculate the USC).

Chances are you might be able to increase the amount further than base + bonus to include any BIK/allowances such as health care into your ttl income figure (up to total 115k)

50+O
Click to expand...
Hi 50+O,
Do you mean the online form will calculate the amount when you input the variables, please can you share this form, if that's ok?
 
Hi

yes its a simple form embedded within my pension provider online access. Basic info of prior years income + AVC paid in prior year - then it calculates how much additional can be paid in up to the tax limit.

However its not a generic form I can share.

If you contact your pension provider/HR and ask about lookback AVC contributions for 2020 they should have a standard process.

50
 
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