Employer Pension Contributions in Ireland: What You Need to Know
Figures are illustrative. Your position will depend on your income, contribution history, and the type of scheme in place.
Pension Contribution Limits in Ireland
Revenue sets age-related limits on the amount of personal contributions that attract tax relief. These are expressed as a percentage of net relevant earnings, up to a maximum of €115,000 per year.
Age | Maximum personal contribution |
Under 30 | 15% of net relevant earnings |
30–39 | 20% |
40–49 | 25% |
50–54 | 30% |
55–59 | 35% |
60+ | 40% |
These are the limits for personal contributions. Employer contributions are assessed separately and are not restricted by these age-related percentages – which is why the employer contribution route is often more flexible for company directors.
The maximum pension fund allowed at retirement is €2,200,000 (the Standard Fund Threshold) increasing to €2,800,000. Contributions above this threshold attract additional tax at retirement.
The 2025 PRSA Change
Personal Retirement Savings Account (PRSA)
What are the new employer funding rules for PRSAs in 2025?
From 2025, the employer limit for PRSA contributions is 100% of the employee’s total salary in the relevant year. Contributions above this are not eligible for employer tax relief and will trigger a Benefit-in-Kind (BIK) for the employee—liable to Income Tax, PRSI, and USC at the marginal rate.
Refer: https://www.smartfinancial.ie/prsa-vs-master-trust-2025/
We search the whole market to find the right pension structure for your circumstances.
Auto Enrolment
The Government’s Auto Enrolment scheme will automatically enroll employees aged 23 to 60 who earn over €20,000 and do not have access to a pension.
Under Auto Enrolment, employer contributions are capped at earnings up to €80,000.
What are the contribution rates?
The contribution rates for auto-enrolment are being phased in over the first 10 years of the operation of the scheme:
- Employee contributions will start at 1.5% of gross pay
- In year four they will increase to 3%
- In year seven they will increase to 4.5%
- In year 10 they will increase to the maximum rate of 6%
| Employee | Employer | State |
Year 1 to 3 | 1.5% | 1.5% | 0.5% |
Year 4 to 6 | 3% | 3% | 1% |
Year 7 to 9 | 4.5% | 4.5% | 1.5% |
Year 10+ | 6% | 6% | 2% |
For higher earners or those already in occupational schemes, Auto Enrolment is unlikely to change much in practice. Existing arrangements generally offer more scope than the minimum contribution rates.
For employers with no pension scheme in place, Auto Enrolment removes the option of doing nothing – some level of employer contribution will become a legal requirement.
What This Guide Cannot Tell You
Employer pension contributions are straightforward in principle. Getting the right structure in practice depends on:
- Your company structure — sole director, multiple directors, employees
- Your existing pension funding and any retained benefits from previous schemes
- Your salary level and how contributions interact with your personal tax position
- Your age and retirement timeline
- Whether a PRSA or an occupational scheme is more appropriate for your situation
Speak to a Smart Financial Advisor
We work with business owners, company directors, and self-employed professionals across Ireland. A consultation covers your current position, the options available to you, and a clear recommendation for next steps.
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Smart Financial Insurance Limited trading as Smart Financial is regulated by the Central Bank of Ireland. The value of your pension investment may go down as well as up. Tax reliefs are subject to change and depend on individual circumstances.
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