Unlock Tax Refunds in 2023: A Guide for Employees

Are You Overpaying Your Income Tax?

If you’re an employee who believes you’ve overpaid on your taxes, there’s a silver lining. You might be eligible for a refund on some of the Income Tax you shelled out in 2022.

How to Get Your Refund

You can potentially secure this refund by making a one-time contribution to a Personal Pension, PRSA, or PRSA AVC, based on your job situation. Ensure you do this by 31 October 2023. If you’re an online tax service user, you have a grace period until 15 November 2023. Remember to opt for backdating the tax relief to 2022.

Understand Your Pension Contribution Limits

Your contributions are bound by age-related percentages of your Net Relevant Earnings:

  • Up to age 29: 15%
  • 30 – 39: 20%
  • 40 – 49: 25%
  • 50 – 54: 30%
  • 55 – 59: 35%
  • 60 and above: 40%

Key Points to Note:

  1. There’s a cap on earnings at €115,000 for contributions. Deduct any contributions made in 2022 from the maximum allowable amount based on the above percentages.
  2. The age considered is as of your birthday in 2022.
  3. Retirement benefits have their own set of Revenue limits.
  4. Whenever ‘Tax’ is mentioned, it specifically means ‘Income Tax’.

The Power of Pension Contributions

Investing in pension contributions is not just about tax savings. It’s a strategic move to ensure a comfortable retirement.

Consider Jane, a 35-year-old employee. She paid Income Tax at a 40% rate in 2022. By contributing €10,000 to her pension by 31 October 2023 and notifying her tax office of her intent to backdate this relief to 2022, she gets:

  • Gross Pension Contribution: €10,000
  • Tax Refund: €4,000
  • Net Outlay: €6,000

Important: To claim tax refunds, individuals must inform their tax district by 31 October 2023 that they want the tax relief on their contributions to be retroactive to 2022.

Choosing the Right Pension Plan

  • For Members of Employer’s Pension Scheme: You can make Additional Voluntary Contributions (AVCs) to your existing scheme (if allowed), to a Group AVC arrangement, or to a PRSA AVC plan.

  • For Those in a PRSA with Employer Contributions: You can contribute to that PRSA or choose another PRSA plan.

  • For Employees Without an Occupational Pension or PRSA: You have the option to contribute to a Personal Pension plan or a PRSA plan.

2023 is the first year that Revenue myAccount require PAYE customers to upload their pension certificate as part of the “filing” of their tax return in advance of the tax deadline to enable the customer to claim tax relief on a pension contribution.

What Policies are affected?

This applies to PAYE customers using myAccount, where the pension contribution has not been deducted through net pay arrangement. It includes AVCs and PRSA AVC’s to occupational pension schemes, Personal Pension and PRSAs. 

What alternative is there to the formal Pension Certificate issued by the pension companies?

Revenue have agreed a “one-page” alternative can be uploaded by the customer to Revenue myAccount as part of the claim with the following information included: 

  • Date of pension contribution payment.
  • Total amount paid.
  • Type of pension contract to which the contribution was paid – AVC, PRSA AVC, PP or PRSA.
  • The relevant policy / scheme number (or if a new policy simply insert “new policy, will be confirmed by Life Office in due course”).
  • Name and address of the customer.
  • Confirmation that tax relief was not allowed on the contribution through net pay.


Ready to Make a Move?

Don’t miss out on potential tax savings. Contact Riordan Financial today and let us guide you through the process.