Max avc amount

Daragh29

Registered User
Messages
7
Hi, hoping someone might be able to clear something up. Going forward I'll have about 10k per year to invest. Mortgage is low and pension is at max level for tax allowance (25%). I've been trying to figure out the best path forward, equities/etf's/trusts etc (paralysis by analysis at this point). They all have downsides regarding risk and tax complications. So what i was wondering was, is it possible to contribute more to your pension past the tax free allowance. Then take advantage of tax free growth.
 
yes it’s actually a very good strategy if you have a long time horizon

Marc, what does this refer to

“Note also that relief from PRSI (4%) applies to in-scheme AVCs but not to a PRSA AVC”

My understanding is ALL PAYE Gross Pay is subject to 4% PRSI, and Employee AVC/Pension deductions, have no impact on PRSI ?
 
Yes that's correct

There is no relief from Universal Social Charge (USC) or Pay Related Social Insurance (PRSI) for employee pension contributions.

However, good planning is to structure employment contracts with salary and a discretionary bonus. The discretionary bonus when directed to an occupational pension is fully tax relieved of both employer PRSI and employee PRSI and USC so my point is that a well-structured employment contract is much more tax efficient than an AVC on a "stand alone" basis if that makes sense
 
Back
Top