Pension contribution limits

Knowing about pension contribution limits in Ireland can help you save in a tax-efficient way and get the most from your retirement savings. 

You might be wondering, “What is the age limit on pension contributions?” or “Which contributions qualify for tax relief?” On this page, we answer these questions so that you can better prepare for retirement.

A pension contribution refers to the amount of money you or your employer invests in a pension scheme, forming a fund that will provide you with an income during your retirement years. You might contribute to one pension fund or several, such as a personal and occupational pension.

Contributions are made regularly, either as a percentage of your salary or a fixed amount, and they may benefit from tax relief, depending on pension limits and your individual circumstances. Being aware of pension contributions and pension limits in Ireland can help you in your retirement planning.

When it comes to pension contribution restrictions, it can help to consider what type of pension you have. Many workers in Ireland have a defined contribution scheme, where both you and your employer make contributions that are invested. If you’re self-employed or your company does not offer an occupational scheme, you might have a PRSA, which can accept contributions from you, your employer, or both. 

Here’s how the two main types of pension contributions work:

1. Employee contributions: These are contributions made by you, the employee, from your salary or wages into your pension fund. These contributions are often deducted from your gross salary before income tax is applied, providing immediate tax relief.

2. Employer contributions: The contributions your employer makes into your pension fund are separate from your salary and are usually based on a percentage of your earnings or a set amount determined by your employer. 

Both types come with pension contribution restrictions, which vary depending on the age of the employee and pension type.

Pension contributions are further divided into the following:

• Ordinary contributions: These are the regular contributions made by both you and your employer, and they form the backbone of a pension plan’s funds. These contributions are typically deducted automatically from your salary before tax. 

• Special contributions: These are single, one-off contributions you can choose to make to boost your pension savings. You might need to make special contributions if, for example, you need to increase your retirement income due to funding gaps from previous employment.

In Ireland, maximum pension contribution levels are essentially the same amounts that qualify for pension tax relief, and they are linked to your age. Any contributions you make to an approved pension scheme, which can include occupational pensions and PRSAs, are eligible for tax relief based on age-related percentages set by the government. The purpose of pension payment limits is to encourage you to save as much as you can for retirement without losing your savings to the taxman.

This table outlines the maximum pension contributions in Ireland by age to benefit from tax relief.

Let’s take the example of a 45-year-old earning €60,000 per year. According to the pension contribution limits in the table, this employee can contribute up to 25% of their salary towards their pension, which is €15,000 per year. 

The idea of maximum pension contributions is to give you a good chance of building up a healthy pension pot throughout your working life, so you have enough to live off once you’ve reached retirement age.

In addition to the age-related pension contributions, there’s an overall maximum pension contribution in Ireland that’s tied to your earnings. The earnings limit currently set by the government is €115,000 per year, and this limit applies to all ages. It’s worth noting that this pension cap in Ireland applies whether you are contributing to just one pension scheme or several. 

If you earn more than €115,000, the maximum pension plan contributions for tax relief are calculated based on the age-related percentage of either your earnings or the €115,000 limit, whichever is lower.

For example, if you’re a 52-year-old earning €160,000, and you contribute 25% of your salary, your tax relief is capped at €34,500 (30% of €115,000). Even if you contribute more than this, tax relief applies only up to the earnings limit.

With occupational schemes, pension contribution limits are usually based on an employee’s years of service and salary. Employers typically contribute a percentage of an employee’s salary to the pension scheme, often matching the employee’s own contributions, or at least a percentage of them.

In general, employer contributions must be “meaningful” and in line with the terms of the pension scheme. For specific information on Irish pension contribution limits, you can read more in the Revenue Pensions Manual.

If you have enrolled in a PRSA at your workplace, your employer will similarly match some or all of your contributions. While there are no specific PRSA contribution limits on an employee’s PRSA, the combination of employer and employee contributions is still subject to the €115,000 earnings limit for tax relief.

Some changes have recently been made to bring PRSAs in line with occupational pension schemes. Employer contributions to PRSAs are no longer deducted from an employee’s own contribution limits, and the contributions are no longer treated as a taxable benefit in kind.

Auto-enrolment is a new pension scheme being introduced in January 2025, in which the employee, employer, and the government all pay towards the employee’s pension. Contributions are made as a percentage of your salary based on how long you’ve been in the scheme. 

Once launched, contributions will be calculated based on a maximum salary after tax of €80,000. This means that if you earn more than €80,000, your contributions will only be calculated on the first €80,000 of your earnings.

Additional voluntary contributions (AVCs) are extra contributions you can make to supplement your main pension scheme. Similar to ordinary pension contributions, AVCs also benefit from tax relief.

They can be particularly handy if your employer has set pension contribution limits. For example, if you’re aged 29 and contributing 10% of your income to an occupational scheme, you might be able to add another 5% to reach the age-related maximum of 15%. In this case, you might consider contacting a pension adviser to see if you can maximise your pension plan limits with AVCs.

It can also be helpful to read the Revenue pension limits page to find more detailed information relevant to your situation.

Deciding how much to pay into your pension can be daunting, and there’s no one-size-fits-all answer as to the correct contribution amount. It might be worth trying to reach the maximum pension contribution limits, if possible.

Another guideline suggests saving a portion of your income equal to half your age, and this is roughly in line with the maximum tax relief offered by Revenue. One way you can start planning for retirement and working out if you’re saving enough is to use a pension calculator.

While you can fund your pension beyond the given limits, it comes with tax implications. It’s important to note that there is an overall fund threshold of €2m. Anything over that amount is subject to an income tax charge of 40%. However, some believe this upper limit is too small, especially for certain professions such as the Gardai, so it is currently under review.

If you’re looking to maximise your pension contributions, you might firstly seek personalised advice from a financial adviser. You could also consider using other sources for your retirement savings, such as a savings account. 

While pensions offer tax advantages, having a savings account can be a flexible way to save for retirement. Spreading your retirement savings across different savings products can help you feel more ready for retirement.

If you want to quickly and easily open savings accounts from a range of banks, register for a free Raisin Account and apply for savings accounts online today. There’s no need to fill out a new application each time you apply, and your money is deposit protected from the moment it arrives in your Raisin Account through to when it automatically transfers to a partner bank.