When you take out an occupational pension in Ireland, you are eligible to tax relief. This is good news for you!
The amount of tax relief relevant to you is based on your annual salary range and the amount of money you are contributing to your pension. If your annual salary is
between €18,000 - €42,000, you get a tax relief of 20%
higher than €42,000, you get a tax relief of 40%
This means that from your pension contribution percentage, either 20% or 40% will be paid by the state, and only 80% or 60% will actually be paid by you.
Example
Example
Let's take the example of an employee who's enrolled on an occupational pension scheme with 7% matching contributions (i.e., where employer and employee contribute the same percentage to the pension scheme):
Annual salary: €50,000
Monthly salary: €4,167
Monthly employer contribution: 7% = €291.67
Monthly employee contribution: 7% = €291.67, from which:
40% is tax relief, that is, €116.67
60% is paid by the employer, deducted from their salary, that is, €175.00
This means that, on a regular month, this employee would have accumulated €583.33 in their pension pot, from which only €175.00 were actually paid by them.
You can check more details about this topic on the Revenue website.