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 million lifetime cap) 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 €2,000,000 lifetime; excess is taxed at 40% on draw-down.
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 exceeding the Standard Fund Threshold
- 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.
Related expenses
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