Revenue Note for Guidance

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Revenue Note for Guidance

787Z Extent of relief

Summary

This section sets out the extent of the relief which an individual may obtain in any year in respect of contributions to one or more PEPPs. Subject to the other provisions of the section, the relief expressed as a percentage of net relevant earnings is age-related.

This section should be read in conjunction with section 790A which provides that, for the purposes of giving relief to an individual under Chapters 1, 2, 2A, 2B and 2D, the aggregate of the amounts, if any, of income – taken into account separately for each of the relevant reliefs – is not to exceed an earnings limit of €115,000.

Details

(1) The amount of contributions which may be deducted or set off in any year of assessment, expressed as a percentage of the individual’s net relevant earnings, is as follows -

Individual who at any time during the tax year is aged 30 or over and less than 40

20%

Individual who at any time during the tax year is aged 40 or over and less than 50

25%

Individual who at any time during the tax year is aged 50 or over and less than 55, or who is less than 55 and whose relevant earnings for the year were derived wholly or mainly from a sporting occupation specified in Schedule 23A

30%

Individual who at any time during the tax year is aged 55 or over and less than 60

35%

Individual who at any time during the tax year is aged 60 or over

40%

All other cases

15%

Employer limit

(1) From 1 January 2025, where an employer contributes to an employee’s PEPP and the total of such contributions exceed the “employer limit” (as defined in section 787V), the sum of contributions made, less the employer limit shall be chargeable to benefit in kind to the employee, in accordance with section 118(1).

(2) Minimum relief

An individual can be granted tax relief for PEPP contributions up to €1,525 irrespective of the level of the individual’s income.

(3) Aggregation of PEPP with PRSA and RAC reliefs

Where an individual is entitled to relief in respect of payments to a PEPP and a PRSA and/or RAC contribution, the maximum relief for the PEPP contributions, is reduced by the amount of any PRSA and/or RAC relief.

Relevant Date: Finance Act 2024