The earnings limit for pension contributions is currently set at which amount?

• A. €254,000
• B. €115,000
• C. €150,000
• D. €500,000

Answer: (B)

The earnings limit is the cap used to determine how much of your earnings can qualify for tax relief on pension contributions. In this framework, relief on employee pension contributions is available at 25% of net relevant earnings, but only up to a maximum of €115,000. This means if your net relevant earnings are below €115,000, relief is 25% of that amount; if your earnings exceed €115,000, the relief is limited to 25% of €115,000.

For example, with earnings of €80,000, relief would be 25% of €80,000. If earnings are €200,000, relief is capped at 25% of €115,000, which is €28,750. Hence the current limit that determines the maximum qualifying earnings for pension contribution relief is €115,000.