Tax Credits for Insurance Premiums

Life Insurance

There is no tax relief for life insurance policies. However tax relief is available for certain medical related insurance type policies. For life assurance it is still possible to obtain tax relief for premiums paid if the cover is part of a pension policy.

Medical Insurance Premiums

Tax Relief at Source (TRS)
Tax relief for medical insurance premiums paid to authorised insurers is granted at source (TRS) by the provider of the medical insurance e.g. VHI. Subscribers will pay a reduced premium (80% of the gross amount) to the authorised medical insurer. This reduction is the same as giving tax relief at the standard rate of tax (20%).

Where an employer pays your medical insurance on your behalf you will be taxed on the premium paid as a benefit-in-kind through your salary under PAYE. However you are entitled to claim personal tax relief on the premium paid at a rate of 20%.

Mr Smart’s annual medical insurance costs €1,000. His employer pays this on his behalf.

Tax Due As Benefit-In-Kind

€400 Collected through PAYE*

Tax Relief On Premium at 20%

€200 Must be claimed from Tax Office when completing your tax return

*Assume tax payable at 40% and ignoring PRSI
Dental Insurance tax relief
Tax relief at the standard rate of tax 20% applies to premiums paid for dental insurance to an authorised insurer for non-routine dental treatment where the policy is for dental insurance only.

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See Also

Health and Medical Expenses