## What a PRSA is
A Personal Retirement Savings Account is a long term retirement savings plan owned by the individual. PRSAs are portable: you keep the same account if you change jobs or stop working. They are regulated by the Pensions Authority.
## Tax relief headlines
PRSA contributions qualify for income tax relief at your marginal rate, subject to:
- Age related percentage limits of net relevant earnings
- An overall earnings cap of €115,000
| Age | Maximum percentage of earnings |
| --- | --- |
| Under 30 | 15 percent |
| 30 to 39 | 20 percent |
| 40 to 49 | 25 percent |
| 50 to 54 | 30 percent |
| 55 to 59 | 35 percent |
| 60 and over | 40 percent |
## Net pay arrangement on the payslip
If your employer remits PRSA contributions through payroll on a "net pay" basis, the contribution is deducted from gross before PAYE. Tax relief is automatic, with no claim required.
If your contribution is paid privately, you must claim relief through Revenue myAccount or your annual tax return.
## Worked example, age 45, €60,000 salary
Maximum percentage: 25 percent of €60,000 = €15,000.
If Eoin contributes €5,000 to a PRSA via net pay payroll:
- Gross pay before PRSA: €60,000
- PRSA deduction: €5,000
- Pay subject to PAYE and USC: €55,000
- Tax saved: roughly €5,000 x 40 percent = €2,000 (assuming higher rate)
Net cost to Eoin: €3,000 for €5,000 of pension saving.
## USC and PRSI treatment
PRSA contributions reduce income for PAYE only. They do not reduce USC or PRSI. The deduction shown on the payslip will be applied differently for each calculation.
## Age 60, top earner
Cara is 60 earning €115,000.
Maximum percentage: 40 percent of €115,000 = €46,000.
She can contribute up to €46,000 in 2026 with full tax relief. At higher rate her tax saving could be up to €18,400.
## Earnings above the €115,000 cap
The cap means earnings above €115,000 do not generate additional pension tax relief. Those at higher pay levels often supplement with employer contributions or other investments.
## Lump sum carry back
You can elect to treat a contribution made before 31 October as if paid in the prior tax year, useful for self employed taxpayers managing year end.
## When you take benefits
At retirement age (typically 60 or older for PRSAs):
- 25 percent tax free lump sum (capped at €200,000 lifetime)
- Remainder used for income drawdown via ARF or annuity
## Educational notice
Pension planning has long term consequences. This article is general information only. A qualified financial adviser should be consulted before making contribution decisions.