Is the EE part in a pension plan deductible for the Payroll tax and social premiums base salary?

  • Modified on: Tue, 28 Apr, 2026 at 9:44 AM

That depends on whether a Pension Plan is IRD-approved or not.


When a pension plan is IRD-approved it means:

1) the EE contribution is tax deductible and

2) the ER contribution is untaxed


When a pension plan is IRD-NON-approved it means:

1) the EE contribution is NOT tax deductible and

2) the ER contribution is processed as taxable (and will be included in the monthly and annual returns under 'Employer contributions to non-approved retirement, life, hospital, health or medical insurance scheme').


One Pension plan is always approved or non-approved. An existing Pension plan cannot be changed from status. If a plan changes from status non-approved or approved to respectively approved or non-approved, a new plan must be created and employees must be switched from one to the other plan.


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