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Tax

Tax on pensions and annuities

All pensions (annuities) are taxable as income under the PAYE system and are also subject to the Universal Social Charge, but not PRSI.

State pensions are taxable, although they are paid without tax being deducted. If you have an occupational pension, your tax free allowance should be reduced when a State pension is being paid. This means that you will pay somewhat more tax on your occupational pension, to account for the tax that is due on the State pension.

There is a limit on the amount of pension you can get from an occupational pension scheme at normal retirement age - broadly this is 2/3rds of your Final Remuneration, if you have completed 10 years’ service and have no benefits from a previous scheme.