The Finance Act 2025 limits employer contributions to PRSAs…. but Business Owners who need to ‘play catchup’ to build up their retirement funds still have huge scope to make significant contributions.
From 1st January 2025, employer contributions to PRSAs will count as Benefit In Kind (BIK) if they go over the “employer limit.”
However, this limit is 100% of the employee’s salary in the tax year.
A company can still match a director’s salary with a PRSA contribution of the same amount.
So, if a director or employee earns €100,000 in a tax year, their employer can contribute €100,000 to their PRSA, with no BIK for the director or employee.
The employer can also only claim a tax deduction for the full €100,000.
What’s more, if the business owner is ‘playing catchup’ and really needs to build up their fund more quickly, they can also make additional personal contributions to their fund and claim tax relief on them.