Before you begin
What you need to compare the two routes
Get your annual 20% rate band and annual tax credits from your Revenue Tax Credit Certificate. Those are the values the PAYE system actually uses for you.
Enter other personal pension contributions already using the age-related relief ceiling before the proposed PRSA amount.
Enter only an employer PRSA contribution you have genuinely been offered.
Reading the answer
Understanding which route buys more pension
The result compares gross pension contributions bought per €100 of personal take-home cost. It does not call one investment product universally better.
PRSA Income Tax relief is calculated by comparing your tax liability before and after the part of the new contribution that still fits inside your Revenue relief ceiling. A contribution can therefore span the 40% and 20% bands.
Boundaries
Assumptions and limitations
Working assumptions
- The Revenue rate band and tax-credit figures entered are the visitor's actual annual allocation for the income being modelled.
- The employer PRSA contribution entered does not exceed Revenue's 100%-of-emoluments employer limit and therefore does not require BIK treatment in this comparison.
- MyFutureFund contribution value uses the statutory ratio €3 participant + €3 employer + €1 State = €7 of gross contributions. It does not replace the payroll threshold with an annual salary calculation.
Where to be careful
- Product charges, investment performance, fund choice, access timing and financial-planning needs are intentionally outside this contribution-value comparison.
- If your employer PRSA contribution exceeds the Revenue employer limit, this calculator refuses the scenario rather than silently ignoring the resulting tax treatment.
Worked example
The same question, answered end to end
A 35-year-old with €50,000 PAYE income, a €44,000 Revenue rate band and €4,000 tax credits proposes €7,500 of personal PRSA contributions, with €3,500 from the employer.
What was entered
- Age 35: the personal contribution relief ceiling is 20% of relevant earnings.
- €50,000 PAYE income, €44,000 annual standard-rate band and €4,000 annual tax credits from Revenue.
- €7,500 personal PRSA contribution and a genuine €3,500 employer contribution.
How it is worked out
The age-35 relief ceiling is 20% of €50,000 = €10,000, so the full €7,500 proposed personal contribution is within the remaining ceiling.
Income Tax before the PRSA contribution is €7,200. After reducing taxable pay to €42,500 it is €4,500, so the actual saving is €2,700.
The €7,500 personal contribution therefore costs €4,800 of take-home pay and, with €3,500 from the employer, produces €11,000 of gross PRSA contributions: €43.64 personal cost per €100 contributed.
MyFutureFund's statutory contribution ratio costs the participant €3 for €7 of gross contributions: €42.86 per €100.
On gross contribution value before product charges, MyFutureFund is slightly ahead in this example.
What the tool returns
- MyFutureFund: €100 gross contributions cost you
- €42.86
- PRSA: €100 gross contributions cost you
- €43.64
- Income Tax saved by the proposed PRSA contribution
- €2,700
Common questions
Questions about this tool
Why does Verdanyx ask for my Revenue rate band instead of marital status?
Because Revenue can allocate rate bands between employments and, under joint assessment, between spouses or civil partners. Your Tax Credit Certificate contains the band actually allocated to you, which is more exact and requires no information about another person's income.
Does every euro of my PRSA contribution get my starting marginal tax rate?
No. A contribution can reduce taxable pay across the 40%/20% boundary, and tax credits can also limit the saving. Verdanyx calculates the tax before and after the relieved contribution using the Revenue values you enter.
Does this say which pension will perform better?
No. It compares gross contribution value before product charges and investment performance. Those product-specific factors need their own evidence rather than an invented default.