Since the introduction of the new employer limit we have received multiple queries about how the tax will apply in practice.

The legislative definition of the employer limit for contributions to a PRSA is 100% of the employee’s emoluments in the year of assessment from that employer. The year of assessment is the relevant tax year which as we know is the full calendar year. Where an employer contribution goes above that limit, a BIK will apply and the employer in question cannot claim relief on the excess amount.

 

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