Naive question regarding contributions....

jem16

bob_dob wrote: »

I think my confusion comes from the fact that my contributions obviously come from my gross pay but I still see that tax relief is added on my pension statement? (Sorry for the naivity, I am trying to learn)

Now that would be an odd thing.

Tax relief is either dealt with by paying from gross pay and getting immediate tax relief as it reduces your taxable pay. Or it is added on by the pension provider if you pay from net pay. What won't happen is that you get tax relief via your payslip and it gets added on by the pension provider.

So you need to check your payslip. Is your gross taxable pay less than your gross pay?

Is the amount that you actually see coming off your pay for your pension the exact same amount that's contributed on your pension statement?

bob_dob

jem16 wrote: »

Or it is added on by the pension provider if you pay from net pay

Doh! I'll bet it's that, I shall go and find my payslips and Pension statement and find out.
Apologies for the stupid questions, I now feel foolish for posting what I did.

I will report back later.

Thank you for the education.

jem16

bob_dob wrote: »

Doh! I'll bet it's that, I shall go and find my payslips and Pension statement and find out.
Apologies for the stupid questions, I now feel foolish for posting what I did.

The only stupid question is the one you didn't ask.

I will report back later.

Great - that would be helpful.

bob_dob

Hi,
Apologies for the delay. Unfortunately I can't seem to get this scan any larger.
I hope you're able to view it and help determine whether the contribution is taken from gross or net?

I do not have the pension statement available as yet.

somethingcorporate

What is your gross pay on that payslip? (excluding bonus and any other adjustment).

Otherwise it is impossible to say.

My gross pension adjustment is listed just below my gross salary (to get to a taxable salary) and not listed in my net salary adjustments.

bob_dob

And:

jem16

Ok if you look at the second image you will see that the gross pay and gross for tax are the same. This means that your pension contributions are coming from net pay and not gross pay. Your tax has been calculated on the gross pay.

By the way I would delete that first image - too much personal info.

bob_dob

jem16 wrote: »

Ok if you look at the second image you will see that the gross pay and gross for tax are the same. This means that your pension contributions are coming from net pay and not gross pay.

By the way I would delete that first image - too much personal info.

Brilliant! Thank you so much. One final (hopefully) question - From that info, should I be able to work out whether I'm paying 3% or 5% of my income?

jem16

bob_dob wrote: »

Brilliant! Thank you so much. One final (hopefully) question - From that info, should I be able to work out whether I'm paying 3% or 5% of my income?

I would say it was 3%.

The figures didn't work out properly but I suspect it's because some of those bonuses or overtime isn't counted for pensionable purposes.

somethingcorporate

Yes, your contribution is £69.57 (from the first image) over your gross salary of £2,824 - I make that 2.5%.

Has your salary changed recently?

Edit: Jem has the right answer I suspect. That will include bonus and anything else that would impact your pay. Your pension contribution would be based on your basic salary only so this would work out at £2,319 per month or around £28k pa.

About right?