Pension - Tax relief

Dox

Dazed_and_confused wrote: »

So say for example your taxable salary would normally be £67k and the tax due on that was £14,300. If you salary sacrifice down to say £5k you will save £14,300 in tax. But if you sacrifice down to £12,500 you also save £14,300.

As above - you can't take your salary below National Minimum Wage.

FatherAbraham

Dazed_and_confused wrote: »

You don't get any pension tax relief with salary sacrifice.

The salary sacrifice means your taxable salary is less and as a result you pay less tax (and National Insurance) on your non existent salary.

In return your employer contributes the sacrificied salary to the pension fund. As it's an employer contribution there is no pension tax relief due

So say for example your taxable salary would normally be £67k and the tax due on that was £14,300. If you salary sacrifice down to say £5k you will save £14,300 in tax. But if you sacrifice down to £12,500 you also save £14,300.

This all assumes you have no other taxable income and have not applied for Marriage Allowance.

One doesn't save the tax - one defers the taxation, to a future point where one normally has a low tax rate.

What one definitely saves, but only via salary sacrifice, is the National Insurance contribution.

Paul_Herring

One doesn't save the tax - one defers the taxation...

.. on 75% of the value of the then contributions, at the point the pension is drawn, but all this is going off into the weeds with pedantry, and is unrelated to tax treatment at the point of contribution, which is the subject under discussion.