Pensions, PRSAs and RACs

Tax is taken from the employee’s gross pay after pension deductions apply. However, Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) are taken from an employee’s gross pay before pension deductions apply. So a pension deduction is not subject to tax, but it is subject to USC and PRSI.

Pension schemes available in Payroll >

You can set up and manage the following company pension schemes in Payroll:

Pension

This is an occupational pension scheme offered by an employer to employees. It involves employee and employer contributions.

Personal retirement savings account (PRSA)

A PRSA is a retirement account an individual sets up with a PRSA provider for the long term. The individual can change employment and continue to use the same PRSA. It involves both employee and employer contributions.

Employers not offering a pension plan must give employees access to at least one PRSA scheme.

Retirement annuity contracts (RAC)

A RAC is a personal pension scheme. It can be set up by a self-employed person or an employee who does not have an occupational pension scheme. Employers don’t make contributions to RAC schemes.

NOTE:

Employees without a workplace or private pension who meet the criteria will be subject to auto enrolment. They are enroled onto a My Future Fund pension.

To set up a pension scheme deduction >

TIP:

You can also create a new pension deduction when you process employee pay.

Select the Settings tab, then select Payments & Deductions.
Select the Deductions tab and select Create New Deduction.

Complete the following information:

Deduction Category	From the drop-down list, select Pensions.
Deduction Type	From the drop-down list, select one of the following options: Pension Pension - PRSA Pension - RAC
Name	Enter a name for the deduction. You can accept the deduction's default name, or specify a new one.
Description	Enter some explanatory text to make it clear what the deduction is for.
Employee's Standard Contribution	Enter the amount you want to deduct from your employees each pay period. This can be a fixed amount or a percentage of pay. You can also change this amount while you're processing an employee's pay details. Read article Edit pay.
Employer's Standard Contribution	If applicable, enter your company's standard pension contribution. This can be a fixed amount or a percentage of pay. You can also change this amount while you're processing an employee's pay details. Read our article Edit pay.

Select Save.

To start deducting pension contributions from an employee's pay >

When you’re processing employee pay in the Edit Pay window, carry out the following steps:

Select the employee you want to start deducting pension contributions from.
Select Add Deduction and choose the relevant pension scheme deduction from the list.
Select View details to edit the employee or employer contribution amounts and select OK.
Continue processing employee pay, and complete the pay run as normal.

To stop deducting pension contributions from an employee's pay >

When you’re processing employee pay in the Edit Pay window, carry out the following steps:

Select the employee you want to stop deducting pension contributions from.
Click the delete button to the left of the deduction.
Continue processing employee pay, and complete the pay run as normal.