Additional Voluntary Contributions (AVCs)

Are you thinking about boosting your retirement savings but wondering about the tax benefits? Good news – in Ireland, you can claim tax relief on pension contributions, and that includes Additional Voluntary Contributions (AVCs)!

Our AVC Calculator is a fantastic, free tool that helps you maximize the tax savings you could make by topping up your pension. Let's walk through how to use it effectively.

What is an AVC, and What Are The Potential Tax Benefits?

An Additional Voluntary Contribution (AVC) is exactly what it sounds like: extra payments you make into your pension alongside your regular contributions (i.e., payments you make to your pension through your employer via payroll).

The main reason to make AVCs is to enhance your retirement fund, but a massive bonus is the tax relief. In Ireland, you can claim tax back on your pension contributions at your marginal rate of tax (20% if you are earning below €44,000 or 40% if you are earning above this amount). This means a portion of what you contribute is effectively paid for by the taxman!

The Irish Tax Hub AVC Calculator

Here's a breakdown of the information used in the calculation and why it's important:

1. Age: This is crucial because there are age-related limits on the amount of tax-relieved pension contributions you can make each year. The older you are, the higher the percentage of your gross earnings you can contribute and still receive tax relief. The calculator automatically factors this into its calculations based on the Revenue limits.
2. Gross Earnings (€): This refers to your gross employment income. It's essentially the income you're paying tax on. The calculator needs this to determine how much of your AVCs will qualify for tax relief within the Revenue limits.
3. Pension Contributions (€): These are the pension contributions you made via payroll during the year. These are combined with any AVC payment when determining whether the total contributions are within the specified Revenue limits.

Use AVC Calculator to estimate your maximum tax deductible additional voluntary contribution or check out our other tools here.

Ready to Boost Your Pension?

The Irish Tax Hub AVC calculator is a simple yet powerful tool to help you on your pension journey. Remember, while this calculator provides an excellent estimate, it's always a good idea to speak to a qualified financial advisor for personalized advice tailored to your specific circumstances. The relief can vary for self employed individuals or for certain types of pension schemes.

Contact us today if you would like to maximize your tax refund by claiming an AVC!