Pension tax relief: what a pension contribution really costs you
When you pay into a pension through your employer, the contribution comes off your pay before income tax. If you pay 40% tax, every €100 you put in costs you only €60 of take-home pay.
The real cost of a 5% contribution (2026)
| Salary | 5% contribution | Income tax saved | Cost to you | Relief |
|---|---|---|---|---|
| €35,000 | €1,750 | €350 | €1,400 | 20% |
| €45,000 | €2,250 | €650 | €1,600 | 29% |
| €60,000 | €3,000 | €1,200 | €1,800 | 40% |
| €80,000 | €4,000 | €1,600 | €2,400 | 40% |
| €100,000 | €5,000 | €2,000 | €3,000 | 40% |
Relief is given at your highest income tax rate. Someone in the 40% band gets 40% back on contributions that come out of that band. USC and PRSI are still charged on the full salary, so they don't change.
How much you can put in with relief
| Your age | Maximum, % of earnings |
|---|---|
| Under 30 | 15% |
| 30 to 39 | 20% |
| 40 to 49 | 25% |
| 50 to 54 | 30% |
| 55 to 59 | 35% |
| 60 or over | 40% |
Earnings above €115,000 are ignored when working out the limit. Contributions from your employer don't count towards your limit.
Add your pension contribution in the calculator