PRSA - Wealth Warning

Where an employer makes contributions on behalf of an employee to a PRSA, the employer's contributions are treated as a benefit-in-kind in the employee's hands. This benefit-in-kind charge would only apply where the combined contributions (employer's and employee's) exceed the relevant Revenue limits.

Following the introduction of the Income Levy in the recent Budget, combined with the tax treatment of employer PRSA contributions, it is imperative that these Revenue limits are not breached.

If the relevant contribution limits are breached, the full contribution would be subject to benefit-in-kind and would also get hit for the new Income Levy.

NB: This rule does not apply to 'Occupational Pensions', just PRSAs.