Switch job but no pension

Fire away

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Hi folks,
I have just been approached by a competitor of the company I work for with a job offer. I would be in line for 10% payrise on base pay however they wont contribute to my pension. My current employer pay 8% which will rise to 10% in 2 years so not a major increase if pension is factored in calc. The big carrot is they offer up to 50% of base as bonus which is not just sales gimmick as i know current employees we got over 40% last year. My question is can I contribute x portion of this bonus into my own personal pension to avoid the taxman. The bonus would be in the region between 20-40k PA I expect. I currently have my own pension which both my company and myself contribute to.
 

RedOnion

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My question is can I contribute x portion of this bonus into my own personal pension to avoid the taxman
Bonus forms part of 'net relevant earnings', so you can pay into pension based on it, subject to the overall cap of 115k.

E.g. base salary 40k, bonus 20k. You can claim relief on x% of 60k.
Base salary 90k, bonus 45k, you can only claim tax relief on x% of 115k.
 

Fire away

Registered User
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66
Bonus forms part of 'net relevant earnings', so you can pay into pension based on it, subject to the overall cap of 115k.

E.g. base salary 40k, bonus 20k. You can claim relief on x% of 60k.
Base salary 90k, bonus 45k, you can only claim tax relief on x% of 115k.
Thanks red onion very clear and precise. Another one if you wouldn't mind. How would one go about claiming the relief? Employ a accountant at year end or instruction to HR before pay period to make pension contribution? I have always paid pension through employer scheme so doing it myself is like a foreign language to me.
 

RedOnion

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No need for an accountant. Your pension provider will help you calculate the maximum contribution after each year end, and then you just claim the relief through your online Revenue the exact same way as medical expenses, etc.


 

Conan

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Whilst a new employer is not obliged to contribute to your pension, they are obliged (required under law) to facilitate you contributing to a PRSA via salary deduction. In that way you would get tax relief at source, without having to reclaim tax relief through making a tax return each year.
You should ask the new employer (or remind them of their obligation) if they will deduct PRSA contributions are remit such to your PRSA provider.
 

50andOut

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Whilst a new employer is not obliged to contribute to your pension, they are obliged (required under law) to facilitate you contributing to a PRSA via salary deduction. In that way you would get tax relief at source, without having to reclaim tax relief through making a tax return each year.
You should ask the new employer (or remind them of their obligation) if they will deduct PRSA contributions are remit such to your PRSA provider.
Do you have to use the PRSA provider a company uses if they do offer contributions or could you also direct them to a PRSA you chose directly?
 

GSheehy

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Do you have to use the PRSA provider a company uses if they do offer contributions or could you also direct them to a PRSA you chose directly?

Employer is obliged to offer just one PRSA Scheme provider but you can ask if they'll set up another one. If you've a good reason for it I'm sure most employers would oblige.

It would just mean completing a second PRSA Scheme 'Letter of Appointment' and a (company) direct debit for the new provider.

Gerard

www.prsa.ie
 
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