Taxes Consolidation Act 1997 section 787B

Relevant earnings and net relevant earnings

Section 787B defines "relevant earnings" and "net relevant earnings" for the purposes of PRSA tax relief, sets out how losses and capital allowances interact with those definitions, and caps the amount of net relevant earnings that qualify for relief.

• Relevant earnings comprise income from an employment, property attached to that employment, or a trade or profession (including partnership income), but exclude remuneration from an investment company where the individual is a proprietary director or proprietary employee.
• Net relevant earnings are the individual's relevant earnings for the year reduced by annual payments and other deductions, and by trading losses and capital allowances of activities giving rise to relevant earnings (including those of a spouse or civil partner not absorbed by their own income).
• Where losses or capital allowances relating to a relevant-earnings source are set against other income in a year for which retirement annuity relief is obtained, the amount so set off reduces net relevant earnings of the following year (and subsequent years as necessary).
• Net relevant earnings may not exceed the annual earnings limit (currently €115,000 — see section 790A), although this cap does not apply to additional voluntary PRSA contributions.