Taxes Consolidation Act 1997 section 776

Certain statutory schemes: exemptions and reliefs

Section 776 provides income tax relief for employee contributions to retirement benefit schemes established under a public statute.

• Ordinary annual contributions to a statutory scheme are deductible from employment income in the year of payment, while non-ordinary contributions may, at Revenue's discretion, be treated as paid in the year of payment or apportioned over earlier years in limited circumstances.
• The aggregate deduction for contributions in any year is capped at an age-related percentage of the employee's remuneration from the relevant employment, ranging from 15% (under age 30) to 40% (age 60 or over), subject to the overall earnings limit of €115,000 under section 790A.
• Contributions that exceed the age-related percentage limit in a given year are carried forward to the next year and treated as contributions paid in that year, and may continue to be carried forward to subsequent years until fully relieved.
• A non-ordinary contribution paid after the end of a tax year but before the return filing date may be elected to be treated as paid in the earlier year, provided the election is made by the return filing date and the contribution does not cause the age-related limit for that earlier year to be exceeded.