If you pay for your own income protection policy in Ireland, you will get Income Tax relief on eligible premiums paid towards a Revenue-approved policy.
That means the tax relief helps reduce the overall cost of your income protection.
Claiming the relief is straightforward. PAYE employees can do it through Revenue’s myAccount, and if you have not claimed it before, you can also go back and claim for previous years. Here is how it works.
What Is Income Protection Tax Relief?
Income protection gives you a regular income if illness or injury stops you from working for a longer period.
When you pay for an eligible income protection policy yourself, Revenue allows you to claim Income Tax relief on the premiums you pay.
Revenue may refer to these policies as Permanent Health Benefit or Income Continuance policies.
In simple terms:
You pay for your income protection policy → you claim tax relief on the eligible premium → this reduces the real cost of your cover.
How Much Tax Relief Will You Get?
You will receive tax relief on your eligible income protection premiums at your top rate of Income Tax.
So, if you pay Income Tax at 20%, you will receive relief at 20%. If you pay Income Tax at 40%, you will receive relief at 40%.
For example, if your income protection costs €100 per month, you will pay:
€100 × 12 = €1,200 per year
If you qualify for relief at 40%, the tax relief on €1,200 would be:
€1,200 × 40% = €480
This means the effective annual cost of the policy would be €720 (€1,200 – €480) or €60 per month, after Income Tax relief.
To keep it simple:
20% or 40% = the tax relief rate
10% of income = the maximum premium amount that qualifies for relief
The relief applies to Income Tax only. It does not apply to PRSI or USC.
How Do You Claim Income Protection Tax Relief?
If you are a PAYE employee and pay for your income protection policy yourself, you can claim the relief through Revenue’s myAccount.
To claim for the current tax year:
- Log in to myAccount.
- Go to PAYE Services.
- Select Manage your tax for the current year.
- Choose Claim tax credits.
- Select Health.
- Choose Income Continuance.
- Enter your policy details and the amount you expect to pay for the year.
- Submit your claim.
Revenue will then update your tax details to include the relief.
Want to know more? – Read Here
What If You Forgot to Claim It Before?
If you have been paying for income protection but have never claimed the tax relief, you can also review previous tax years.
Revenue allows you to review your tax for the previous four years.
To claim for a previous year:
- Log in to myAccount.
- Go to PAYE Services.
- Select Review your tax for the previous 4 years.
- Choose the year you want to review.
- Complete your Income Tax Return.
- Go to Tax Credits & Reliefs.
- Select Health and then Income Continuance.
- Enter the premiums you paid.
- Submit your return.
It is also a good idea to keep the annual tax certificate or premium statement provided by your insurer in case Revenue asks for proof of the payments.
What If Your Employer Provides Income Protection?
Some employers provide income protection as part of their employee benefits package. If your contribution is taken directly from your salary before Income Tax is calculated, the tax relief will normally already be included through payroll.
In this situation, you should not claim the same relief again through myAccount.
If you are unsure, check your payslip or speak to your payroll team to see how your income protection scheme is set up.
What If You Are Self-Employed?
If you are self-employed and pay for an eligible income protection policy, you will claim the tax relief through your annual Form 11 Income Tax Return.
The relevant section is called Permanent Health Benefit.
Will You Pay Tax If You Claim on Your Income Protection Policy?
Yes.
It is important to separate the tax treatment of your premium from the tax treatment of the income you receive if you make a claim.
When you pay your premium: you receive Income Tax relief on eligible premiums.
When your policy pays you an income: that payment is treated as replacement income and is generally subject to Income Tax and USC.
This is because income protection is designed to replace part of the salary you would normally receive if you were able to work.
Thinking About Income Protection?
Income protection is designed to give you a regular income if illness or injury stops you from working. Tax relief on eligible premiums also helps reduce the overall cost of putting this protection in place.
At Beat the Bank, we make it easier to compare income protection options and find cover that suits your needs and budget.
Get a quote in seconds and apply online in minutes at beatthebank.ie.
Tax treatment depends on individual circumstances and Revenue rules and can change over time. This information is for general guidance and does not constitute tax advice.
Frequently Asked Questions
Can I claim tax relief on income protection in Ireland?
Yes. If you pay eligible premiums towards a Revenue-approved income protection policy, you will receive Income Tax relief subject to Revenue’s rules and limits.
How much of my income protection premium qualifies for tax relief?
You can claim Income Tax relief on eligible income protection premiums, up to a maximum premium amount equal to 10% of your total income for the year.
For example, if your total income is €50,000, premiums of up to €5,000 could qualify for relief. The actual tax relief is then given at your applicable Income Tax rate.
How do I claim income protection tax relief?
PAYE employees can claim through Revenue’s myAccount under Health → Income Continuance.
Can I claim tax relief for previous years?
Yes. You can review and claim eligible relief for the previous four tax years through myAccount.
Do I need to claim if my employer provides income protection?
If your employer already applies the tax relief through payroll, you do not need to claim the same relief again.
