Salary sacrifice question

Davina40

If I earn a salary of say 40k a year, but I'm getting near to retirement and want to do salary sacrifice of 30k and put this all into my pension, can I do this?

I know that you can't contribute more than you earn to a pension in any tax year. But in the example above, would my earnings for this be the 40k, or would it be the figure after the sacrifice so 10k? Which would obviously mean this wouldn't work!

Seabee42

Hello restrictions on salary sacrifice do apply for employed jobs as your employer is required to pay you the minimum wage.


The other restriction relates to the annual allowance and unless your a high earner this is currently 40k from all sources.

lisyloo

If I earn a salary of say 40k a year, but I'm getting near to retirement and want to do salary sacrifice of 30k and put this all into my pension, can I do this?

No, because of minimum wage requirement.
You can put money into your pension AFTER you receive your salary as well but that won't get the NI benefits of salary sacrifice but will get the tax relief.


My min wage is £15,268.50
calculated as £7.83 x 7.5 * 260
but your working hours/days might be different to mine.


So max via salary sacrifice in my case would be around £25K.


Im in a similar position to you and contributing close to the max.

Davina40

Thanks all must admit I forgot the minimum wage requirement!