Personal Retirement Savings Account (PRSA)

New Changes have been made to the PRSA which has more restrictions to both the employer and the employee up to January 2023

• The provision which held an employer PRSA contribution to be an employee PRSA contribution for tax relief purposes was removed.

• Employer contributions to an employee’s PRSA are exempt from BIK in the hands of an employee.

• Employer contributions now have no impact on personal tax relief limits. The €2 Standard Fund Threshold (SFT) will limit large contributions.

• The spread forward of corporation tax relief on single premium employer pensions no longer applies.

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What does this mean?

• There are now no Revenue limits on the amount that an employer can pay to a PRSA or the maximum benefits that can be provided to the employee subject to SFT (Standard Fund Threshold)

• Employer contributions to a PRSA are no longer treated as BIK in the hands of the employee and any employer contributions are not deemed to have been paid by the employee thus maintaining in full the employees age related tax relief limits (15%-40%) for any personal contribution.

• Corporation Tax relief on employer contributions to a PRSA can now be claimed in the accounting period they are paid so no spreading of relief required.