Calculating threshold and adjusted income using payslip and PIAs

Tintin86

I think I understand how to calculate this but the definitions are confusing so just wanted to confirm.

I am a salaried employee with no other income. I pay 5% of my monthly salary to my pension and my employer makes a contribution of 10%. I have a p60 and my Pension input Amounts (PIA) from my pension provider (numbers are hypothetical).

My P60 states my pay for the year as £120k. This is my pay subject to tax i.e. after any pension contribution I make. This is my threshold income.

To get my adjusted income, I just need to add my PIA for the year to my threshold income. My PIA (i.e. my pension contribution plus my employers) is £50k per the statement from my pension provider. Therefore my adjusted income is £170k.

This seems really straightforward to me but nowhere seems to explain it like this so worried I am missing something. Is this calculation correct?

Thanks.

TcpnT

If total pension contribution is 15% how can the montary amount be £50K on a £120K income? Maybe this is a DB pension?

EdSwippet

Tintin86 wrote: »

This seems really straightforward to me but nowhere seems to explain it like this so worried I am missing something. Is this calculation correct?

Ah, the pensions allowance taper. Daftest tax law ever. HMRC offers this set of instructions:

https://www.gov.uk/guidance/pension-schemes-work-out-your-tapered-annual-allowance

NoMore

TcpnT wrote: »

If total pension contribution is 15% how can the montary amount be £50K on a £120K income? Maybe this is a DB pension?

OP talks about Pension input Amount (PIA) which generally refer to DB pensions

TcpnT

OP talks about Pension input Amount (PIA) which generally refer to DB pensions

Did consider that but seemed strange that the employer contribution was given as exactly 10% (twice employee contribution) when typically for a DB scheme it would be higher and variable and often not specified in that way.

Tintin86

Hi,

Sorry, I presented that in a confusing manner. 5% is my monthly standard pension contribution.

I also make various AVCs throughout the year which brings the pension amount up.

It is defined contribution plan.

Also I have seen the calculation guidance online but the definitions used are confusing to me and I want to tie it back to concrete numbers I have on official tax documentation.