Ireland Income Protection Calculator
Calculate your Irish income protection benefit and premium. 75% of salary cap less Illness Benefit €232/wk, 4-52 week deferred periods, Revenue tax relief at 20% or 40%.
Your Profile
1=office/professional, 4=heavy manual
Income Protection Benefit
Monthly Benefit (gross)
€3,682
After PAYE/USC/PRSI at your marginal rate: €2,209/month
Illness Benefit Offset
€1,005/mo
Deferred Period
26 weeks
Benefit To Age
65
Gross Annual Premium
€1,065
Tax Relief at Source (Section 471 TCA 1997)
Net Monthly Premium (after relief)
€53
Annual €639 after 40% marginal-rate relief
Income protection premiums qualify for Revenue tax relief at your marginal rate (40%). Relief is given automatically through payroll (Net Pay Arrangement if paid via employer group scheme) or claimed on your Form 12 / Form 11 self-assessment for individually-purchased policies. Your gross annual premium of €1,065 costs you only €639 out of pocket after relief — effectively subsidised insurance, unique among personal protection products in Ireland.
Deferred Period Choice
26-week deferred period: the Irish market default. Matches the DSP Illness Benefit entitlement (pays for the first 2 years from week 1) + most employer 6-month sick-pay schemes. Best premium-to-cover ratio for most office workers.
How Irish income protection works
Income protection (IP) pays a monthly benefit if illness or injury stops you working, continuing to your chosen benefit age (60, 65 or 68) or until you recover. Revenue caps the benefit at 75% of gross salary LESS state Illness Benefit (€232/week in 2026 for PRSI Class A) — so real-world replacement is usually around 60-65% of gross. The benefit is TAXABLE when paid (PAYE, USC, PRSI apply).
Revenue tax relief — effectively subsidised insurance
IP premiums qualify for tax relief at your MARGINAL rate (20% or 40%) under Section 471 TCA 1997. Relief is given automatically through payroll (Net Pay Arrangement on employer schemes) or claimed on Form 12/Form 11 self-assessment for personal policies. A 40% marginal taxpayer paying €80/month gross sees their real cost drop to €48 — no other personal protection product in Ireland gets this treatment.
Deferred period options
The deferred (waiting) period is the gap between incapacity and the first benefit payment: 4, 8, 13, 26 or 52 weeks. 26 weeks is the Irish default — matches the 2-year Illness Benefit window (€232/week) plus most 6-month employer sick-pay schemes. Shorter deferred periods cost materially more (+40% for 8-week, +75% for 4-week) and are rarely worth it unless employer sick pay is nil.
State benefits that integrate with IP
DSP Illness Benefit (€232/week 2026, max 2 years) is paid from week 1 of incapacity for PRSI Class A workers. After that, Invalidity Pension (€232/week for those with sufficient contributions) continues. Private IP tops up whichever state benefit applies, subject to the 75% total income cap — which is why Revenue requires the offset in the policy schedule.
Common questions about Income Protection
How much income protection can I buy in Ireland?+
Revenue caps income protection at 75% of your gross annual salary MINUS state Illness Benefit (€232/week in 2026, or €12,064/year). On a €75,000 salary the maximum benefit is €75,000 × 75% − €12,064 = €44,186/year (€3,682/month gross). The cap prevents over-insurance and incentivises return-to-work. If your salary rises, most modern policies allow CPI-linked indexation of benefits without fresh underwriting.
Is the income protection benefit taxable?+
Yes — when claimed, IP benefits are taxed as ordinary earned income: PAYE at marginal rates (20% or 40%), USC (0.5%-8%), and PRSI (typically 4% Class M for those on IP). On a €3,600/month gross benefit for a 40% marginal taxpayer, net take-home is approximately €2,000/month after all three deductions — which is precisely why Revenue lets you deduct the premium at marginal rates on the way in.
What tax relief applies to IP premiums?+
Income protection premiums qualify for tax relief at your MARGINAL rate (20% or 40%) under Section 471 TCA 1997. Employer group schemes operate under a Net Pay Arrangement — relief is automatic through payroll. Individual policies claim relief via Form 12 (PAYE workers) or Form 11 (self-assessed). A 40% taxpayer paying €100/month gross sees real cost drop to €60 — no other Irish protection product enjoys this treatment.
What deferred period should I choose?+
The deferred period is the gap between incapacity and first benefit payment: 4, 8, 13, 26 or 52 weeks. 26 weeks is the Irish market default — it matches the combination of 2-year Illness Benefit plus most employers' 6-month full-sick-pay. Shorter periods cost materially more (+40% for 8-wk, +75% for 4-wk) and are rarely value unless employer sick pay is zero. 52-week defers cost less but suit only those with strong 12-month sick-pay entitlements.
How does Illness Benefit integrate with private IP?+
Illness Benefit (€232/week 2026 for PRSI Class A workers) is paid from day 1 of incapacity for up to 2 years. After 2 years, Invalidity Pension (€232/week, contribution-dependent) continues. Private IP policies always offset whichever state benefit applies — Revenue requires this in the policy schedule to enforce the 75% total-income cap. The practical effect: your private monthly benefit is your insured face amount MINUS whatever the state pays.
Can I include bonus and benefits-in-kind in my insurable income?+
Most Irish insurers (Royal London Ireland, Irish Life, Aviva) include guaranteed regular bonuses (Christmas bonus, 13th-month) and contractual commission in insurable income, subject to a 3-year average. Discretionary bonuses and benefits-in-kind (health insurance, car allowance) are generally excluded unless specifically agreed and loaded. For sales roles with large variable pay, choose an insurer willing to base cover on a 2-3 year commission average — ask before applying.