Hi everyone,
I'm trying to work out how pension contributions are calculated for tax relief purposes, especially for someone with both PAYE and self-employed income. I'm in the 40-49 age bracket, so my age-related percentage for contributions is 25%.
Am I right that "net relevant earnings" is the figure used to determine the maximum tax-relievable pension contribution. I'm wondering how is "net relevant earnings" calculated in a dual-income situation?
Some example figures:
So, for pension relief purposes, is the maximum contribution calculated on:
So my main question is:
Thank you!
I'm trying to work out how pension contributions are calculated for tax relief purposes, especially for someone with both PAYE and self-employed income. I'm in the 40-49 age bracket, so my age-related percentage for contributions is 25%.
Am I right that "net relevant earnings" is the figure used to determine the maximum tax-relievable pension contribution. I'm wondering how is "net relevant earnings" calculated in a dual-income situation?
Some example figures:
- Gross PAYE employment income: €20,000
- PAYE pension deducted in payslip: €1,000
- Gross self-employed income: €30,000
- Self-employed income after expenses: €15,000
So, for pension relief purposes, is the maximum contribution calculated on:
- Just the net self-employed income? (25% of €15,000 = €3,750)
- A combined figure of both incomes? (25% of €20,000 + €15,000 = €8,750 - €1000 = €7750)
So my main question is:
- What is the maximum pension contribution I can make to reduce my overall tax liability? and can that be in 1 pension, e.g. PRSA for the self-employed income or does it need a second AVC for the PAYE?
Thank you!