How to claim tax relief on a Zurich lump sum AVC
A Revenue Guide to obtaining tax relief on your lump sum AVC tax relief SP AVC
To Start your Zurich Low Cost Standard PRSA AVC with 100% allocation (0% contribution charge) please see https://www.labrokers.ie/prsas-ireland-personal-retirement-savings-account-pension-plan/zurich-low-cost-prsa-avcs/
To top up or add a one off lump sum to your existing Zurich Standard PRSA or PRSA AVC that was set up through LABrokers you will enjoy the same charging structure of 0% contribution charge for any top ups you make for the life of your policy please see https://www.labrokers.ie/top-up-your-existing-zurich-prsa-or-prsa-avc/
Information on Zurich https://www.zurich.ie/broker-centre/products/pensions-pre-retirement/standard-prsa-avcs-individual/
We hope you find this article how to claim tax relief on a Zurich lump sum AVC useful.
Tax relief and PRSAs
If you pay a contribution into a PRSA, you will benefit from tax relief at your marginal income tax rate. However, you have to pay social insurance (PRSI) contributions and the Universal Social Charge on your PRSA contribution. If your contribution to your PRSA is deducted from your salary by your employer, your tax relief is given at the time you pay the contribution.
The maximum annual tax deductible for a PRSA is based on a percentage of your earnings. The allowable percentage rises with age. (So for example, someone over 40 will get a higher rate of tax relief than someone aged under 30).
Tax relief is allowed against your relevant earnings (that is, earnings from employment, from a profession or from a trade). If you have earnings as a proprietary directory or employee of an investment company, these are discounted. “Net relevant earnings” are relevant earnings less losses, capital allowances and certain payments that reduce a person’s income for tax purposes such as tax effective covenants.
If you are a member of an occupational pension scheme or of a statutory pension scheme, you may pay to an Additional Voluntary Contributions PRSA.
Rates
PRSA providers cannot impose a minimum contribution greater than:
- €300 per annum
- €10 per electric transaction or
- €50 per transaction for other methods of payment.
Contributions received by PRSA providers must be held in a custodian account.
Maximum allowable contributions for tax relief purposes are:
| Age | Percentage (%) of earnings* |
| Under 30 | 15% |
| 30-39 | 20% |
| 40-49 | 25% |
| 50-54 | 30% |
| 55-59 | 35% |
| 60 and over | 40% |
* For employees, “earnings” means gross pay for tax purposes. In the case of self-employed people, “earnings” is defined as “net relevant earnings” (see above).The annual earnings limit (the maximum amount of earnings taken into account for calculating tax relief) is €115,000.
This means for example, an employee aged 35 who earns €50,000 can get tax relief on annual pension contributions up to €10,000.
Contributions made by an employer to a PRSA on behalf of an employee, are treated as a “benefit in kind” of the employee. The employer’s contributions are treated the same as the employee’s for tax relief purposes. For example, an employee aged 29 contributes 5% of their earnings to a PRSA and the employer contributes a further 10%, the employee is treated as making a total contribution of 15%. The employee is charged on the employer’s contribution as a benefit in kind and must include this on their return of income to the Revenue Commissioners. This tax treatment makes no practical difference unless the total contribution limits shown are exceeded.
Contributions to PRSAs are disregarded from assessment in means-tested social welfare schemes except Supplementary Welfare Schemes.