Can I Claim Pension Contributions (Director) as a Business Expense in Ireland?
Yes, employer pension contributions to a Revenue-approved scheme are fully deductible against Corporation Tax in the year paid, subject to the Standard Fund Threshold (€2.2 million from 1 January 2026) and salary anti-avoidance rules.
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What Revenue (Revenue Commissioners) says
Section 774 TCA 1997 allows employer pension contributions to a registered occupational pension or PRSA as a trading expense. The contribution must be reasonable in relation to the employee's role and salary. The Standard Fund Threshold is €2.2 million from 1 January 2026, and the chargeable excess is taxed at 40%.
When you can claim
- Employer contributions to a director's executive pension or PRSA
- One-off lump sum to fund prior years (subject to age/salary multiple)
- AVCs for employees
- Set-up fees for a new scheme
When you cannot claim
- Personal pension contributions (claim against personal income, not company)
- Contributions that take the fund past the Standard Fund Threshold, which attract the 40% chargeable excess tax
- Excessive contributions vs. salary (Revenue can challenge)
Good to know
Pro tip: An executive pension is one of the most efficient ways for a director to extract value from a profitable Irish Ltd. The company gets CT relief at 12.5% and you avoid PAYE/PRSI/USC on the contribution. Employer contributions to an occupational scheme, PRSA or auto-enrolment account are not a benefit in kind for the employee, and no income tax, PRSI or USC is deducted. For the director's own personal contributions, tax relief is capped by age, from 15 per cent of earnings under 30 to 40 per cent at 60 and over, on earnings of up to €115,000.
Important: For a PRSA, the employer contribution limit is 100 per cent of the employee's salary from 1 January 2025. Anything above that is taxed as a benefit in kind on the employee and the excess is not deductible for the company. Revenue also expects the contribution to be wholly and exclusively for the trade, so keep the board minute and the pension quote.
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