Nobody sets up a pension for you when you work for yourself. There is no payroll deduction, and a sole trader is outside auto-enrolment because My Future Fund only enrols employees. Sole traders and company directors face the same gap, but the best way to close it differs.
For directors, one figure matters most. €30,000 paid into a pension by your company arrives in the fund in full. The same €30,000 paid as salary leaves €14,295 after income tax at 40%, USC at 8% and PRSI at 4.35% at the rates from 1 October 2026.
For sole traders the lever is tax relief at your marginal rate, up to an age-related share of profits, with a deadline in November 2026 that lets a payment made this year cut last year’s tax bill. This page covers both, with three worked examples: Laura, Seán and Patrick.
What pension can I have if I am self-employed?
It depends on how you are set up, because Revenue treats a sole trader and a limited company director differently.
A sole trader or partner earns “net relevant earnings”, the taxable profit of the trade. You pay contributions from that profit into a personal pension or a Personal Retirement Savings Account (PRSA) and claim income tax relief on your Form 11.
A company director is an employee of the company for tax purposes. You can pay personal contributions like a sole trader, but the company can also contribute, and a company contribution does not count against your personal limit, is not a benefit in kind, and is a deductible trading expense for the company.
| Sole trader or partner | Company director | |
|---|---|---|
| Who pays in | You, from taxed profit | You, the company, or both |
| Relief on your own contributions | Income tax at 20% or 40%, up to the age-related limit, on earnings up to €115,000 | Same |
| USC and PRSI | Charged on the full profit | Charged on salary; not on company contributions |
| Company contributions | Not available | Deductible trading expense, no benefit in kind |
| Limit on company contributions | Not applicable | PRSA: 100% of salary a year. Executive pension or SSAP: Revenue maximum funding on salary and service |
| Backdating | Pay by 18 November 2026 through ROS and claim relief in 2025 | Same for personal contributions; company contributions are deducted in the year paid |
| Access | From 60 | From 60 for a PRSA; from 50 for an occupational scheme if you have left the company |
If you are a sole trader weighing up a limited company, the pension is one of the strongest reasons to incorporate. If you are already a director paying personal contributions only, you are leaving the better route unused.
How does a sole trader pension work?
A sole trader pension is a personal pension (a retirement annuity contract) or a PRSA. Both are contracts in your own name and both give the same tax relief. A standard PRSA has capped charges (5% of each contribution and 1% a year of the fund) and can take employer contributions if you incorporate later; a personal pension can offer wider fund choice. Our PRSA page and private pension page compare them.
How much can I put in with tax relief?
Revenue limits relief to a percentage of net relevant earnings that rises with age. Earnings above €115,000 are ignored.
| Age | Maximum contribution with tax relief |
|---|---|
| Under 30 | 15% of earnings |
| 30 to 39 | 20% |
| 40 to 49 | 25% |
| 50 to 54 | 30% |
| 55 to 59 | 35% |
| 60 and over | 40% |
Relief is against income tax only. In the 40% band (income above €44,000 for a single person in 2026) each €1,000 within your limit costs you €600; in the 20% band it costs €800. USC and PRSI are charged on your full profit either way.
Laura, 38, sole trader: what €12,000 costs her
Laura is a self-employed graphic designer in Kilkenny with taxable profits of €60,000 for 2026 and no pension.
- Age 30 to 39, so her limit is 20% of €60,000 = €12,000.
- Her income above the €44,000 band is €16,000, all taxed at 40%, so the whole €12,000 is relieved at 40%.
- Tax saved: €12,000 x 40% = €4,800.
- Net cost: €12,000 minus €4,800 = €7,200, or €600 a month for €1,000 a month invested.
- USC and PRSI: unchanged. She still pays both on €60,000.
With profits of €40,000 her limit would be €8,000 at 20% relief, costing €6,400. The pension calculator runs the numbers for your own age and profit. If you pay more than your limit, relief on the excess carries forward to a later year.
Can I backdate pension contributions to last year?
Yes, and this is the deadline that matters for every sole trader in autumn 2026. A contribution to a personal pension or PRSA paid after the end of a tax year, but on or before the following 31 October, can be treated as paid in the earlier year if you elect for that on your return. For people who both file and pay through ROS, Revenue has extended the 2025 return date to Wednesday 18 November 2026 (eBrief 034/26). Pay first, then elect.
Seán, 52, sole trader: cutting his 2025 tax bill in November 2026
Seán is an electrician in Athlone with taxable profits of €90,000 for 2025 and no pension contribution during 2025. In October 2026 his accountant prepares his 2025 Form 11 and the bill is bigger than expected.
- Age 50 to 54, so his 2025 limit is 30% of €90,000 = €27,000.
- His 2025 income above the €44,000 band is €46,000, so the full €27,000 sits in the 40% band.
- He pays €27,000 into a PRSA on 10 November 2026, files and pays through ROS by 18 November, and elects on the Form 11 to treat it as paid in 2025.
- Relief: €27,000 x 40% = €10,800 off his 2025 income tax.
- Net cost of the €27,000: €16,200.
His 2026 limit is untouched, so he can contribute again before the 2027 deadline. With €15,000 available instead, the same rule saves €6,000.
Pay less tax and build a fund that is yours.
Sole trader or director, we show the numbers before you commit to anything.
What is the best pension for a company director?
For most owner-directors it is a pension the company pays into, because a company contribution is the one form of pay that skips income tax, USC and PRSI and is still a deductible trading expense (Pensions Manual chapter 4: ordinary annual employer contributions are allowed in the year paid and are not a benefit in kind). There are three ways to take it.
Executive pension through a master trust
An executive pension is an occupational scheme set up by the company for a director or senior employee. Since the IORP II rules, new executive pensions are generally set up under a master trust run by a life company, which takes the trustee work off you. The company’s contribution is worked out against Revenue’s maximum benefit rules from your salary and service, so it can be well above the age-related percentages that cap a personal contribution.
PRSA with employer contributions
Since 1 January 2025 a company can pay up to 100% of your salary into your PRSA each year with no benefit in kind, and deduct it for corporation tax up to that limit. Above that, the excess is taxed on you and is not deductible. A PRSA is in your name, moves with you, and a standard PRSA has capped charges. On a €75,000 salary, that is up to €75,000 a year of company money.
Small self-administered scheme (SSAP)
An SSAP is an occupational scheme, usually with fewer than 12 members, where you and a Revenue-approved pensioneer trustee are the trustees and you direct the investments. Revenue expects the members to be “20% directors”, owning more than 20% of the voting rights. It is the route for a director who wants direct property; it carries more administration and cost, and every investment must be at arm’s length. Our property through your pension page sets out what an SSAP can and cannot buy.
Should I take salary or pay into a pension through my company?
This is the calculation every director should see once.
Patrick, 45, director: €30,000 as salary, in the company, or into a pension
Patrick owns a limited company in Portlaoise and pays himself €75,000. After costs the company has €30,000 of profit left this year. He has three choices.
Leave it in the company. Corporation tax on trading profit at 12.5%: €30,000 x 12.5% = €3,750. €26,250 stays in the company, still to be taxed when he takes it out.
Pay it as extra salary. His salary is already above the €44,000 standard rate band and the €70,044 USC threshold, so the whole €30,000 is taxed at the top of each scale.
- Income tax at 40%: €12,000.
- USC at 8%: €2,400.
- PRSI at 4.35% (the Class S rate from 1 October 2026): €1,305.
- Total deductions: €15,705. In his pocket: €14,295.
The salary is deductible for the company, so no corporation tax arises, but Patrick has lost more than half of it.
The company pays it into his pension.
- Contribution to his PRSA or executive pension: €30,000.
- Income tax, USC and PRSI: nil, because an employer contribution is not a benefit in kind.
- Corporation tax: nil, because it is a deductible trading expense in the year paid.
- In his fund: €30,000.
That is €30,000 invested against €14,340 spent, from the same profit. The tax is deferred, not cancelled. At retirement Patrick takes 25% of the fund as a lump sum (the first €200,000 of lifetime lump sums is tax-free) and the balance is taxed as income as he draws it, usually at less than the 52.2% he would pay on salary today. Taking the salary and paying a personal contribution instead would still cost him the USC and PRSI (€3,660) and cap his relief at 25% of earnings. The value of the fund can fall as well as rise.
Executive pension (master trust) vs PRSA vs small self-administered scheme
| Executive pension (master trust) | PRSA | Small self-administered scheme | |
|---|---|---|---|
| Suits | Company-funded pension, no trustee work | A portable plan in your name | Directors who want direct property |
| Company limit | Revenue maximum funding on salary and service | 100% of salary a year | Revenue maximum funding on salary and service |
| Direct property | No | Only a self-directed PRSA with a property option | Yes, at arm’s length |
| Trustee | Master trust trustees | None; a contract with the provider | You plus a Revenue-approved pensioneer trustee |
| Charges | Provider’s | Standard PRSA capped at 5% and 1% a year; non-standard not capped | Set-up, trustee and administration fees |
| Access | Normal retirement age 60 to 70; from 50 if you have left the company | From 60; from 50 on employer money if retired from that employment | As executive pension |
Many directors end up with two: a PRSA or master trust for the regular company contribution, and an SSAP only if property is on the agenda.
Executive pension or master trust: what replaced the old director pension?
An executive pension was the one-member occupational scheme that Irish companies used for decades to fund a director’s pension, with the company as sponsor and the director as member. Since the EU pensions rules changed in 2021, providers stopped writing new one-member schemes and the last of the old executive pensions had to move by April 2026. What a director sets up now is one of three things:
- A section of a master trust, which is an occupational scheme run by a professional trustee for many employers at once. It keeps the funding rules of the old executive pension, so the company can contribute on salary and service rather than the age-related percentages, and the trustee duties sit with the master trust.
- A PRSA funded by the company. Since January 2025 an employer contribution to a PRSA is not a benefit in kind up to 100% of the director’s salary, which made the PRSA the simplest route for most owner-directors.
- A small self-administered scheme (SSAP) for a director who wants to hold property or choose individual investments, covered on our property page.
Which one suits you comes down to how much the company wants to put in, how soon you want to draw on it, and whether you want control over the investments. A director on €80,000 who wants the company to fund €40,000 a year can do it through a PRSA. A director with twenty years’ service and a large fund to catch up on is often better in a master trust, where the Revenue maximum funding calculation allows more.
Self-administered scheme or executive pension?
A self-administered scheme is for a director who wants to pick the assets, typically a commercial property or a direct share portfolio, and is prepared to pay for a pensioneer trustee and the administration that comes with it. For a director who wants the pension funded and invested without that work, a master trust section or a company-funded PRSA does the same job at a lower cost. We compare both on your numbers before anything is set up.
How much can my company pay into my pension?
For a PRSA it is a percentage: up to 100% of your salary in the year, with no benefit in kind and a full deduction for the company. Where your salary falls for a reason such as unpaid leave, Revenue lets the previous year’s salary set the limit.
For an executive pension or SSAP there is no percentage. The provider’s actuary calculates the contribution Revenue will allow from your age, salary, service to normal retirement age and any pensions you already hold, and for a director with long service and a short run to retirement it can exceed a year’s salary. Revenue may spread a large one-off “special” contribution over up to five years for corporation tax.
Two ceilings apply to everyone. The Standard Fund Threshold is €2,200,000 in 2026, rising by €200,000 a year to €2,800,000 in 2029, and the excess is taxed at 40% when you draw benefits. Retirement lump sums are tax-free only up to €200,000 in a lifetime, with the next €300,000 taxed at 20%.
Pensions from earlier PAYE jobs count in the funding calculation. Our pension review and transfer page explains when to bring an old scheme into your director’s pension, and the pension tracing page helps if you have lost one.
When can I access a self-employed or director pension?
- Personal pension: from 60, up to 75. Earlier only on ill health or for a small list of occupations.
- PRSA: from 60, up to 75. From 50 on employer or transferred occupational money if you have retired from that employment.
- Executive pension, master trust or SSAP: at the scheme’s normal retirement age, between 60 and 70. From 50 if you have left the company. Any age on serious ill health.
Early retirement from a company you own has conditions attached; an advisor sets them out before you plan for access at 50. At retirement you take your lump sum and the balance goes into an Approved Retirement Fund (ARF), with a minimum drawdown for tax purposes of 4% a year from 61 and 5% from 71, or buys an annuity.
What if I employ staff?
From 1 January 2026, employees aged 23 to 60 earning over €20,000 with no workplace pension are enrolled in My Future Fund, with employer and employee contributions starting at 1.5% each. You can keep an employee out of auto-enrolment by contributing to your own scheme or a PRSA for them at the lower of 1.5% of gross pay or €1,200 a year, with total contributions of at least the lower of 3.5% or €2,800. Those company contributions are deductible in the same way as your own.
How do I set up a pension as a sole trader or director?
- Tell us how you are set up: sole trader, partner or director, your age, your profit or salary, and any old pensions.
- A senior advisor works out your contribution limit, the products that fit, and for directors the funding calculation.
- We compare providers across the market on charges and fund choice and show you the projection in writing.
- You decide. If you go ahead we set up the plan, the payment, and for sole traders the Form 11 election.
- We review it every year before the November deadline.
New to pensions? The start a pension page covers funds and risk. Worked in the UK? The UK pension transfer page covers bringing that fund home.
